-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WOxVcFjxFriArUx/Lo469Uk1J8k4lCoqUHU3+2Ujvb9S3v1kLASOIVTrnbHv3W5n X6KvJB0GX1Seb/CmElizdw== 0000948572-03-000035.txt : 20030516 0000948572-03-000035.hdr.sgml : 20030516 20030516154659 ACCESSION NUMBER: 0000948572-03-000035 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030516 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARTFORD FINANCIAL SERVICES GROUP INC/DE CENTRAL INDEX KEY: 0000874766 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 133317783 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13958 FILM NUMBER: 03708563 BUSINESS ADDRESS: STREET 1: HARTFORD PLZ CITY: HARTFORD STATE: CT ZIP: 06115 BUSINESS PHONE: 8605475000 MAIL ADDRESS: STREET 1: HARTFORD PLAZA T-15 CITY: HARTFORD STATE: CT ZIP: 06115 FORMER COMPANY: FORMER CONFORMED NAME: ITT HARTFORD GROUP INC /DE DATE OF NAME CHANGE: 19930328 8-K 1 b8k051603.txt THE HARTFORD UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 13, 2003 --------------- THE HARTFORD FINANCIAL SERVICES GROUP, INC. ------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-19277 13-3317783 - ---------------------------- ------------ ------------------ (State or other jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) The Hartford Financial Services Group, Inc. Hartford Plaza Hartford, Connecticut 06115-1900 ----------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (860) 547-5000 ------------------ Item 7. Financial Statements and Exhibits. (a) Financial statements of business acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. The exhibit listed below is being furnished with this Form 8-K: Exhibit 99.1 Investor Financial Supplement Item 9. Regulation FD Disclosure. In accordance with the procedural guidance set forth in SEC Release No. 33-8216, the following information and the attached exhibit are being furnished under "Item 9. Regulation FD Disclosure" in satisfaction of the requirements of "Item 12. Results of Operations and Financial Condition." On May 13, 2003, The Hartford Financial Services Group, Inc. released its Investor Financial Supplement (the "IFS") for the first quarter ended March 31, 2003. A copy of the IFS is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. As provided in General Instructions B.2 and B.6 of Form 8-K, the information and exhibit contained in this Form 8-K shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE HARTFORD FINANCIAL SERVICES GROUP, INC. Date: May 16, 2003 By: /s/ NEAL S. WOLIN ------------------------------------- Name: Neal S. Wolin Title: Executive Vice President and General Counsel EX-99 3 k8exh99_1.txt THE HARTFORD FINANCIAL SERVICES GROUP, INC. [GRAPHIC OMITTED] THE HARTFORD INVESTOR FINANCIAL SUPPLEMENT MARCH 31, 2003 - OFC - THE HARTFORD FINANCIAL SERVICES GROUP, INC. Address: 690 Asylum Avenue Hartford, CT 06115 Internet address: http://www.thehartford.com Contacts: Hans Miller Senior Vice President Planning, Development and Investor Relations Phone (860) 547-2751 Mike Lesperance Assistant Vice President Investor Relations Phone (860) 547-6781 Kate Murphy Executive Assistant Investor Relations Phone (860) 547-4257
- ------------------------------------------------------------------------------------------------------------- As of May 12, 2003 A.M. BEST FITCH STANDARD & POOR'S MOODY'S INSURANCE FINANCIAL STRENGTH RATINGS: Hartford Fire A+ AA AA- Aa3 Hartford Life Insurance Company A+ AA AA- Aa3 Hartford Life & Accident A+ AA AA- Aa3 Hartford Life & Annuity A+ AA AA- Aa3 OTHER RATINGS: The Hartford Financial Services Group, Inc.: Senior debt a- A A- A2 Commercial paper AMB-2 F1 A-2 P-1 Hartford Life, Inc.: Senior debt a- A A- A2 Commercial paper -- F1 A-2 P-1 - -------------------------------------------------------------------------------------------------------------
TRANSFER AGENT The Bank of New York Shareholder Relations Department - 12W P.O. Box 11258 Church Street Station New York, NY 10286 800-524-4458 COMMON STOCK Common stock of The Hartford Financial Services, Inc. is traded on the New York Stock Exchange under the symbol "HIG". This report is for information purposes only. It should be read in conjunction with documents filed by The Hartford Financial Services Group, Inc. with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. - IFC - THE HARTFORD FINANCIAL SERVICES GROUP, INC. INVESTOR FINANCIAL SUPPLEMENT CONTENTS Basis of Presentation ...................................... i CONSOLIDATED Consolidated Financial Results ............................. 1 Consolidating Statements of Operations First Quarter Ended March 31, 2003 and 2002 .............. 2 Consolidating Balance Sheets As of March 31, 2003 and December 31, 2002 ............... 3 Capital Structure .......................................... 4 Accumulated Other Comprehensive Income, net of tax ......... 5 Computation of Basic and Diluted Earnings (Loss) Per Share . 6 LIFE Financial Highlights ....................................... 8 Operating Results .......................................... 9 Total Assets Under Management/Japan Data ................... 10 Balance Sheets ............................................. 11 Deferred Policy Acquisition Costs and Present Value of Future Profits ........................................ 12 Reinsurance Recoverable Analysis ........................... 13 Statutory Surplus to GAAP Stockholders' Equity Reconciliation ........................................... 14 Investment Products Income Statements Individual Annuity .................................... 15 Other ................................................. 16 Supplemental Data Sales/Other Deposits .................................. 17 Assets Under Management ............................... 18 Individual Annuity - Account Value Rollforward ........ 19 Other - Account Value and Asset Rollforward ........... 20 Guaranteed Minimum Death Benefits ..................... 21 Individual Life Income Statements ........................................ 22 Supplemental Data ........................................ 23 Account Value Rollforward ................................ 24 Group Benefits Income Statements ........................................ 25 Supplemental Data ........................................ 26 PROPERTY & Financial Highlights ....................................... 30 CASUALTY Operating Results .......................................... 31 Business Insurance Underwriting Results .................... 32 Business Insurance Written and Earned Premiums ............. 33 Personal Lines Underwriting Results ........................ 34 Personal Lines Written and Earned Premiums ................. 35 Specialty Commercial Underwriting Results .................. 36 Specialty Commercial Written and Earned Premiums ........... 37 Reinsurance Underwriting Results ........................... 38 Reinsurance Written and Earned Premiums .................... 39 Statistical Premium Information (Year over Year) ........... 40 Statutory Surplus to GAAP Stockholders' Equity Reconciliation ........................................... 41 Other Operations ........................................... 42 Other Operations Claims and Claims Adjustment Expenses ..... 43 Summary of Gross Asbestos Reserves ......................... 44 Paid and Incurred Loss and Loss Adjustment Expense ("LAE") Development - A&E ........................................ 45 Unpaid Claims and Claim Adjustment Expense Reserve Rollforward .............................................. 46 Reinsurance Recoverable Analysis ........................... 47 Consolidated Income Statements ............................. 48 Consolidated Balance Sheets ................................ 49 INVESTMENTS General Account - Investment Earnings Before-tax Consolidated ............................................. 52 Life ..................................................... 53 Property & Casualty ...................................... 54 Corporate ................................................ 55 General and Guaranteed Separate Account - Composition of Invested Assets Consolidated ............................................. 56 Life ..................................................... 57 General Account - Composition of Invested Assets Property & Casualty ...................................... 58 General and Guaranteed Separate Account - Unrealized Loss Aging Consolidated ............................................. 59 Life ..................................................... 60 General Account - Unrealized Loss Aging Property & Casualty ...................................... 61 General and Guaranteed Separate Account - Invested Asset Exposures ........................................... 62 THE HARTFORD FINANCIAL SERVICES GROUP, INC. BASIS OF PRESENTATION DEFINITIONS AND PRESENTATION - ---------------------------- o All amounts are in millions, except for per share and ratio information. o Operating income is a non-GAAP measure representing net income, excluding the after-tax effect of net realized capital gains and losses. The Company believes that operating income provides to investors a valuable measure of the performance of the Company's ongoing businesses because it excludes the effect of realized capital gains and losses, which tend to be highly variable. Net income is the most directly comparable GAAP measure. o The Company has included the non-GAAP measures net income, excluding the after-tax effect of the 2003 asbestos reserve addition, and operating income, excluding the after-tax effect of the 2003 asbestos reserve addition, in these materials. The Company has provided these measures to enhance investor understanding of the financial performance of the Company's operating businesses by eliminating the effect of the asbestos reserve addition, which relates solely to legacy businesses. In each case, net income is the most directly comparable GAAP measure. o Certain operating and statistical measures have been incorporated herein to provide supplemental data that indicate trends in The Hartford's current business. These measures include sales, account value rollforward, in-force and written premium. Written premiums represents the amount of premiums charged for policies issued in a fiscal period. Management believes that this forward-looking performance measure is useful to investors as it provides a better understanding of the underlying trends in the Company's current business. Earned premiums is the most directly comparable GAAP measure. o The Hartford, along with others in the property and casualty insurance industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of claims expense (exclusive of claim adjustment expenses) to earned premiums. The loss adjustment expense ratio represents the ratio of claim adjustment expenses to earned premiums. The expense ratio is the ratio of underwriting expenses (commissions; taxes, licenses and fees; as well as other underwriting expenses, excluding bad debts expense) to earned premiums. The policyholder dividend ratio is the ratio of policyholder dividends to earned premiums. The combined ratio is the sum of the loss ratio, the loss adjustment expense ratio, the expense ratio and the policyholder dividend ratio. These ratios are relative measurements that describe for every $100 of net premiums earned, the cost of losses and expenses, respectively. A combined ratio below 100 demonstrates underwriting profit; a combined ratio above 100 demonstrates underwriting loss. The "catastrophe ratio" represents the ratio of catastrophe losses to earned premiums. o Trust preferred securities represent company obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely junior subordinated debentures. o Accumulated other comprehensive income ("AOCI") represents unrealized gain (loss) on securities, net of tax; net gain (loss) on cash-flow hedging instruments, net of tax; cumulative translation adjustments, net of tax; and minimum pension liability adjustment, net of tax. o Assets under management is an internal performance measure used by the Company since a significant portion of the Company's revenue is based upon asset values. These revenues increase or decrease with a rise or fall, respectively, in the level of assets under management. o Investment yield, after-tax, is calculated by dividing after-tax net investment income by average invested assets at amortized cost. Investment yield, before-tax, is calculated by dividing before-tax net investment income by average invested assets at amortized cost. o Net realized capital gains and losses are not allocated to the segment level within Life and North American. o Net income and net realized capital losses for the first quarter ended March 31, 2003 include impairments on securities of $58, after-tax, partially offset by net realized capital gains of $24, after-tax. Net income and net realized capital losses for the first quarter ended March 31, 2002 include impairments on securities of $27, after-tax, partially offset by net realized capital gains of $26, after-tax. o Property & Casualty includes North American and Other Operations. North American includes the combined underwriting results of the Business Insurance, Personal Lines, Specialty Commercial and Reinsurance underwriting segments along with income and expense items not directly allocated to these segments, such as net investment income, net realized capital gains and losses, other expenses (including interest) and income taxes. Other Operations includes certain property and casualty insurance operations which have discontinued writing new business and claims related to asbestos and environmental exposures. o Corporate includes the capital raising and purchase accounting adjustment activities related to the June 27, 2000 acquisition of all of the outstanding shares of Hartford Life, Inc. ("HLI") that the Company did not already own, as well as capital that has not been contributed to the Company's insurance subsidiaries. o Certain reclassifications have been made to the prior periods to conform to the March 31, 2003 presentation. o NM - Not meaningful, increases or decreases greater than 200%. i
THE HARTFORD FINANCIAL SERVICES GROUP, INC. CONSOLIDATED FINANCIAL RESULTS 1Q 2Q 3Q 4Q HIGHLIGHTS 2002 2002 2002 2002 ---------- --------- ---------- --------- Net income (loss) [1] $ 292 $ 185 $ 265 $ 258 Operating income (loss) [1] $ 293 $ 291 $ 365 $ 301 Impact of 2003 asbestos reserve addition $ - $ - $ - $ - Operating income before impact of 2003 asbestos reserve addition $ 293 $ 291 $ 365 $ 301 Total revenues $ 4,060 $ 3,992 $ 4,085 $ 4,280 Total assets $185,261 $179,937 $175,824 $181,975 Total assets under management [2] $203,598 $197,084 $191,055 $198,608 - -------------------------------------------------------------------------------------------------------------------- PER SHARE AND SHARES DATA Basic earnings (loss) per share [1] Net income (loss) $ 1.19 $ 0.75 $ 1.06 $ 1.01 Operating income (loss) $ 1.19 $ 1.18 $ 1.47 $ 1.18 Operating income before impact of 2003 asbestos reserve addition $ 1.19 $ 1.18 $ 1.47 $ 1.18 Diluted earnings (loss) per share [1] [3] Net income (loss) $ 1.17 $ 0.74 $ 1.06 $ 1.01 Operating income (loss) $ 1.17 $ 1.16 $ 1.46 $ 1.17 Operating income before impact of 2003 asbestos reserve addition [4] $ 1.17 $ 1.16 $ 1.46 $ 1.17 Weighted average common shares outstanding 246.1 247.4 248.9 255.2 Weighted average common shares outstanding and dilutive potential common shares [3] 249.7 250.7 250.5 256.3 Common shares outstanding 246.7 247.6 255.0 255.2 Book value (including AOCI) $ 36.64 $ 39.00 $ 42.91 $ 42.06 Book value (excluding AOCI) $ 35.51 $ 36.06 $ 36.99 $ 37.77 - -------------------------------------------------------------------------------------------------------------------- FINANCIAL RATIOS ROE (net income (loss) last 12 months-equity including AOCI) [5] 11.4% 10.6% 9.0% 10.1% ROE (operating income (loss) last 12 months-equity excluding AOCI) [5] 14.4% 14.5% 13.9% 13.8% ROE excluding impact of 2003 asbestos reserve addition (operating income (loss) last 12 months-equity excluding AOCI) [5] [6] 14.4% 14.5% 13.9% 13.8% Investment yield, after-tax 4.3% 4.3% 4.2% 4.3% Debt (incl. Trust Preferred Securities) to capitalization incl. AOCI 30.7% 29.3% 29.9% 29.0% North American Property & Casualty GAAP combined ratio 100.2 100.5 98.7 100.0 - -------------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER HIGHLIGHTS 2003 CHANGE CHANGE ----------- --------- ---------- Net income (loss) [1] $ (1,395) NM NM Operating income (loss) [1] $ (1,361) NM NM Impact of 2003 asbestos reserve addition $ (1,701) - - Operating income before impact of 2003 asbestos reserve addition $ 340 16% 13% Total revenues $ 4,331 7% 1% Total assets $ 188,657 2% 4% Total assets under management [2] $ 205,223 1% 3% - ------------------------------------------------------------------------------------------------------------- PER SHARE AND SHARES DATA Basic earnings (loss) per share [1] Net income (loss) $ (5.46) NM NM Operating income (loss) $ (5.33) NM NM Operating income before impact of 2003 asbestos reserve addition $ 1.33 12% 13% Diluted earnings (loss) per share [1] [3] Net income (loss) $ (5.46) NM NM Operating income (loss) $ (5.33) NM NM Operating income before impact of 2003 asbestos reserve addition [4] $ 1.33 14% 14% Weighted average common shares outstanding 255.4 9.3 sh 0.2 sh Weighted average common shares outstanding and dilutive potential common shares [3] 255.4 5.7 sh (0.9) sh Common shares outstanding 255.4 8.7 sh 0.2 sh Book value (including AOCI) $ 36.97 1% (12%) Book value (excluding AOCI) $ 32.05 (10%) (15%) - ------------------------------------------------------------------------------------------------------------- FINANCIAL RATIOS ROE (net income (loss) last 12 months-equity including AOCI) [5] (7.4%) NM NM ROE (operating income (loss) last 12 months-equity excluding AOCI) [5] (4.8%) NM NM ROE excluding impact of 2003 asbestos reserve addition (operating income (loss) last 12 months-equity excluding AOCI) [5] [6] 13.9% (0.5) 0.1 Investment yield, after-tax 4.2% (0.1) (0.1) Debt (incl. Trust Preferred Securities) to capitalization incl. AOCI 31.7% 1.0 2.7 North American Property & Casualty GAAP combined ratio 97.7 2.5 2.3 - ------------------------------------------------------------------------------------------------------------- [1] The quarter ended March 31, 2002 includes the earnings impacts of the $11 after-tax expense in Life related to Bancorp Services, LLC litigation and the $8 after-tax benefit in Life's September 11 Terrorist Attack exposure. The quarter ended September 30, 2002 includes $76 of tax benefit in Life primarily related to the favorable treatment of certain tax items arising during the 1996-2002 tax years. [2] Includes mutual fund assets (see page 18) and third party assets managed by HIMCO (see page 56). [3] As a result of the antidilutive impact from the net loss in the first quarter of 2003, The Hartford is required by generally accepted accounting principles to use basic weighted average shares in the calculation of first quarter 2003 diluted earnings per share. In the absence of the net loss, 256.1 weighted average common shares outstanding and dilutive potential common shares would have been used in the calculation. [4] Calculated using weighted average common shares outstanding and dilutive potential common shares of 256.1. [5] The quarters ending March 31, 2002 and June 30, 2002 exclude the $440 loss related to September 11, 2001. [6] ROE calculated excluding the earnings and equity impacts of the 2003 asbestos reserve addition.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. CONSOLIDATING STATEMENTS OF OPERATIONS FIRST QUARTER ENDED MARCH 31, 2003 AND 2002 LIFE PROPERTY & CASUALTY ----------------------------------------------------------- 2003 2002 CHANGE 2003 2002 CHANGE -------- -------- -------- -------- -------- -------- Earned premiums $ 683 $ 709 (4%) $ 2,166 $ 1,877 15% Fee income 617 662 (7%) - - - Net investment income 507 448 13% 285 254 12% Other revenues 27 32 (16%) 95 81 17% Net realized capital gains (losses) (48) (15) NM (5) 8 NM - ------------------------------------------------------------------------------------------------------------------------ TOTAL REVENUES 1,786 1,836 (3%) 2,541 2,220 14% Benefits, claims and claim adjustment expenses [1] 1,083 1,057 2% 4,161 1,358 NM Amortization of deferred policy acquisition costs and present value of future profits 163 152 7% 401 403 - Insurance operating costs and expenses 351 357 (2%) 216 177 22% Other expenses 33 48 (31%) 132 126 5% - ------------------------------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND EXPENSES 1,630 1,614 1% 4,910 2,064 138% INCOME (LOSS) BEFORE INCOME TAXES 156 222 (30%) (2,369) 156 NM Income tax expense (benefit) 30 52 (42%) (856) 28 NM - ------------------------------------------------------------------------------------------------------------------------ NET INCOME (LOSS) [2] 126 170 (26%) (1,513) 128 NM Net realized capital gains (losses), after-tax (31) (7) NM (3) 6 NM - ------------------------------------------------------------------------------------------------------------------------ OPERATING INCOME (LOSS) [2] $ 157 $ 177 (11%) $(1,510) $ 122 NM - ------------------------------------------------------------------------------------------------------------------------ CORPORATE CONSOLIDATED ------------------------------------------------------- 2003 2002 CHANGE 2003 2002 CHANGE -------- -------- -------- -------- -------- -------- Earned premiums $ - $ - - $ 2,849 $ 2,586 10% Fee income - - - 617 662 (7%) Net investment income 4 4 - 796 706 13% Other revenues - - - 122 113 8% Net realized capital gains (losses) - - - (53) (7) NM - -------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 4 4 - 4,331 4,060 7% Benefits, claims and claim adjustment expenses [1] 1 1 - 5,245 2,416 117% Amortization of deferred policy acquisition costs and present value of future profits - - - 564 555 2% Insurance operating costs and expenses - - - 567 534 6% Other expenses 15 13 15% 180 187 (4%) - -------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 16 14 14% 6,556 3,692 78% INCOME (LOSS) BEFORE INCOME TAXES (12) (10) (20%) (2,225) 368 NM Income tax expense (benefit) (4) (4) - (830) 76 NM - -------------------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) [2] (8) (6) (33%) (1,395) 292 NM Net realized capital gains (losses), after-tax - - - (34) (1) NM - -------------------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) [2] $ (8) $ (6) (33%) $(1,361) $ 293 NM - -------------------------------------------------------------------------------------------------------------------- [1] 2003 includes before-tax impact of asbestos reserve addition of $2,604 in Property & Casualty. Before-tax catastrophes for Property & Casualty were $56 for 2003 and $20 for 2002. [2] 2003 includes after-tax impact of asbestos reserve addition of $1,701 in Property & Casualty. Includes after-tax catastrophes of $37 and $13 for the first quarter ended March 31, 2003 and 2002, respectively.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. CONSOLIDATING BALANCE SHEETS LIFE PROPERTY & CASUALTY ----------------------------- ----------------------------- MAR. 31, DEC. 31, MAR. 31, DEC. 31, 2003 2002 CHANGE 2003 2002 CHANGE --------- ---------- ------- ----------- -------- ------- Investments Fixed maturities, available for sale, at fair value $ 31,676 $ 29,377 8% $ 20,384 $ 19,446 5% Equity securities, available for sale, at fair value 410 458 (10%) 209 459 (54%) Policy loans, at outstanding balance 2,876 2,934 (2%) - - - Other investments 1,071 1,122 (5%) 636 668 (5%) - --------------------------------------------------------------------------------------------------------------------------- Total investments 36,033 33,891 6% 21,229 20,573 3% Cash and cash equivalents 289 179 61% 366 198 85% Premiums receivable and agents' balances 191 208 (8%) 2,521 2,403 5% Reinsurance recoverables 865 796 9% 5,635 4,231 33% Deferred policy acquisition costs and present value of future profits 5,904 5,758 3% 994 930 7% Deferred income tax (347) (274) (27%) 1,408 610 131% Goodwill 796 796 - 153 153 - Other assets 1,329 1,362 (2%) 2,167 2,031 7% Separate account assets 108,068 107,078 1% - - - - --------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS $153,128 $ 149,794 2% $ 34,473 $ 31,129 11% - --------------------------------------------------------------------------------------------------------------------------- Future policy benefits, unpaid claims and claim adjustment expenses $ 8,735 $ 8,583 2% $ 21,212 $ 17,091 24% Other policy funds and benefits payable 25,252 23,957 5% - - - Unearned premiums 52 54 (4%) 4,246 3,942 8% Debt 1,125 1,125 - 1,164 1,164 - Trust preferred securities 450 450 - 1,024 1,023 - Other liabilities 3,555 2,858 24% 3,383 2,939 15% Separate account liabilities 108,068 107,078 1% - - - - --------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 147,237 144,105 2% 31,029 26,159 19% - --------------------------------------------------------------------------------------------------------------------------- Equity x-AOCI, net of tax 5,089 4,980 2% 2,663 4,262 (38%) AOCI, net of tax 802 709 13% 781 708 10% - --------------------------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 5,891 5,689 4% 3,444 4,970 (31%) - --------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $153,128 $ 149,794 2% $ 34,473 $ 31,129 11% - --------------------------------------------------------------------------------------------------------------------------- CORPORATE CONSOLIDATED ------------------------ ------------------------------ MAR. 31, DEC. 31, MAR. 31, DEC. 31, 2003 2002 CHANGE 2003 2002 CHANGE ------- ------- ------- ---------- ---------- ------- Investments Fixed maturities, available for sale, at fair value $ 66 $ 66 - $ 52,126 $ 48,889 7% Equity securities, available for sale, at fair value - - - 619 917 (32%) Policy loans, at outstanding balance - - - 2,876 2,934 (2%) Other investments - - - 1,707 1,790 (5%) - ------------------------------------------------------------------------------------------------------------------------ Total investments 66 66 - 57,328 54,530 5% Cash and cash equivalents - - - 655 377 74% Premiums receivable and agents' balances - - - 2,712 2,611 4% Reinsurance recoverables - - - 6,500 5,027 29% Deferred policy acquisition costs and present value of future profits 1 1 - 6,899 6,689 3% Deferred income tax 213 209 2% 1,274 545 134% Goodwill 772 772 - 1,721 1,721 - Other assets 4 4 - 3,500 3,397 3% Separate account assets - - - 108,068 107,078 1% - ------------------------------------------------------------------------------------------------------------------------ TOTAL ASSETS $1,056 $1,052 - $ 188,657 $ 181,975 4% - ------------------------------------------------------------------------------------------------------------------------ Future policy benefits, unpaid claims and claim adjustment expenses $ (14) $ (16) 13% $ 29,933 $ 25,658 17% Other policy funds and benefits payable (1) (1) - 25,251 23,956 5% Unearned premiums (7) (7) - 4,291 3,989 8% Debt 622 622 - 2,911 2,911 - Trust preferred securities (5) (5) - 1,469 1,468 - Other liabilities 354 384 (8%) 7,292 6,181 18% Separate account liabilities - - - 108,068 107,078 1% - ------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES 949 977 (3%) 179,215 171,241 5% - ------------------------------------------------------------------------------------------------------------------------ Equity x-AOCI, net of tax 433 398 9% 8,185 9,640 (15%) AOCI, net of tax (326) (323) (1%) 1,257 1,094 15% - ------------------------------------------------------------------------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY 107 75 43% 9,442 10,734 (12%) - ------------------------------------------------------------------------------------------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,056 $1,052 - $ 188,657 $ 181,975 4% - ------------------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. CAPITAL STRUCTURE 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ------------ ------------ ----------- ----------- DEBT Short-term debt $ 615 $ 615 $ 615 $ 315 Long-term debt 1,965 1,965 2,595 2,596 ------------------------------------------------------------------------------------------------------------------------------ TOTAL DEBT 2,580 2,580 3,210 2,911 Trust preferred securities 1,425 1,429 1,461 1,468 ------------------------------------------------------------------------------------------------------------------------------ TOTAL DEBT INCLUDING TRUST PREFERRED SECURITIES $ 4,005 $ 4,009 $ 4,671 $ 4,379 - --------------------------------------------------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY Equity excluding AOCI $ 8,761 $ 8,928 $ 9,433 $ 9,640 AOCI 278 728 1,510 1,094 ------------------------------------------------------------------------------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY $ 9,039 $ 9,656 $ 10,943 $ 10,734 - --------------------------------------------------------------------------------------------------------------------------------- CAPITALIZATION TOTAL CAPITALIZATION INCLUDING AOCI $ 13,044 $ 13,665 $ 15,614 $ 15,113 TOTAL CAPITALIZATION EXCLUDING AOCI $ 12,766 $ 12,937 $ 14,104 $ 14,019 - --------------------------------------------------------------------------------------------------------------------------------- FINANCIAL RATIOS DEBT (INCLUDING TRUST PREFERRED SECURITIES) TO EQUITY INCLUDING AOCI 44.3% 41.5% 42.7% 40.8% Debt (excluding Trust Preferred Securities) to equity excluding AOCI 29.4% 28.9% 34.0% 30.2% DEBT (INCLUDING TRUST PREFERRED SECURITIES) TO CAPITALIZATION INCLUDING AOCI 30.7% 29.3% 29.9% 29.0% Debt (excluding Trust Preferred Securities) to capitalization excluding AOCI 20.2% 19.9% 22.8% 20.8% - --------------------------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ------------ ------------ ------------- DEBT Short-term debt $ 315 (49%) - Long-term debt 2,596 32% - ------------------------------------------------------------------------------------------------------------------------ TOTAL DEBT 2,911 13% - Trust preferred securities 1,469 3% - ------------------------------------------------------------------------------------------------------------------------ TOTAL DEBT INCLUDING TRUST PREFERRED SECURITIES $ 4,380 9% - - --------------------------------------------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY Equity excluding AOCI $ 8,185 (7%) (15%) AOCI 1,257 NM 15% ------------------------------------------------------------------------------------------------------------------------ TOTAL STOCKHOLDERS' EQUITY $ 9,442 4% (12%) - --------------------------------------------------------------------------------------------------------------------------- CAPITALIZATION TOTAL CAPITALIZATION INCLUDING AOCI $ 13,822 6% (9%) TOTAL CAPITALIZATION EXCLUDING AOCI $ 12,565 (2%) (10%) - --------------------------------------------------------------------------------------------------------------------------- FINANCIAL RATIOS DEBT (INCLUDING TRUST PREFERRED SECURITIES) TO EQUITY INCLUDING AOCI 46.4% 2.1 5.6 Debt (excluding Trust Preferred Securities) to equity excluding AOCI 35.6% 6.2 5.4 DEBT (INCLUDING TRUST PREFERRED SECURITIES) TO CAPITALIZATION INCLUDING AOCI 31.7% 1.0 2.7 Debt (excluding Trust Preferred Securities) to capitalization excluding AOCI 23.2% 3.0 2.4 - ---------------------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX PROPERTY & LIFE CASUALTY CORPORATE CONSOLIDATED -------------- ---------------- --------------- --------------- AS OF MARCH 31, 2003 Fixed maturities unrealized gain $ 733 $ 845 $ 26 $ 1,604 Equities unrealized gain 4 13 - 17 Net deferred gain on cash flow hedging instruments 104 1 - 105 ---------------------------------------------------------------------------------------------------------------------------- Total unrealized gain 841 859 26 1,726 Foreign currency translation adjustments (39) (47) - (86) Minimum pension liability adjustment - (31) (352) (383) ---------------------------------------------------------------------------------------------------------------------------- TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME $ 802 $ 781 $ (326) $ 1,257 As of December 31, 2002 Fixed maturities unrealized gain $ 637 $ 791 $ 29 $ 1,457 Equities unrealized gain (loss) (16) 3 - (13) Net deferred gain on cash flow hedging instruments 126 2 - 128 ---------------------------------------------------------------------------------------------------------------------------- Total unrealized gain $ 747 $ 796 $ 29 $ 1,572 Foreign currency translation adjustments (38) (57) - (95) Minimum pension liability adjustment - (31) (352) (383) ---------------------------------------------------------------------------------------------------------------------------- TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME $ 709 $ 708 $ (323) $ 1,094
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. COMPUTATION OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE 1Q 2Q 3Q 4Q 1Q 2002 2002 2002 2002 2003 ---------- ----------- ----------- ---------- --------- Numerator: Net income (loss) $ 292 $ 185 $ 265 $ 258 $ (1,395) Net realized capital losses, after-tax (1) (106) (100) (43) (34) --------------------------------------------------------------------------------------------------------------------------- Operating income (loss) 293 291 365 301 (1,361) Impact of 2003 asbestos reserve addition - - - - (1,701) --------------------------------------------------------------------------------------------------------------------------- Operating income before impact of 2003 asbestos reserve addition $ 293 $ 291 $ 365 $ 301 $ 340 Denominator: Weighted average common shares outstanding (basic) 246.1 247.4 248.9 255.2 255.4 Dilutive effect of options 3.6 3.3 1.6 1.1 - --------------------------------------------------------------------------------------------------------------------------- Weighted average common shares outstanding and dilutive potential common shares (diluted) [1] 249.7 250.7 250.5 256.3 255.4 Basic earnings (loss) per share Net income (loss) $ 1.19 $ 0.75 $ 1.06 $ 1.01 $ (5.46) Net realized capital losses, after-tax - (0.43) (0.41) (0.17) (0.13) --------------------------------------------------------------------------------------------------------------------------- Operating income (loss) 1.19 1.18 1.47 1.18 (5.33) Impact of 2003 asbestos reserve addition - - - - (6.66) --------------------------------------------------------------------------------------------------------------------------- Operating income before impact of 2003 asbestos reserve addition $ 1.19 $ 1.18 $ 1.47 $ 1.18 $ 1.33 Diluted earnings (loss) per share [1] Net income (loss) $ 1.17 $ 0.74 $ 1.06 $ 1.01 $ (5.46) Net realized capital losses, after-tax - (0.42) (0.40) (0.16) (0.13) --------------------------------------------------------------------------------------------------------------------------- Operating income (loss) 1.17 1.16 1.46 1.17 (5.33) Impact of 2003 asbestos reserve addition - - - - (6.66) --------------------------------------------------------------------------------------------------------------------------- Operating income before impact of 2003 asbestos reserve addition [2] $ 1.17 $ 1.16 $ 1.46 $ 1.17 $ 1.33 - -------------------------------------------------------------------------------------------------------------------------------- [1] As a result of the antidilutive impact from the net loss in the first quarter of 2003, The Hartford is required by generally accepted accounting principles to use basic weighted average shares in the calculation of first quarter 2003 diluted earnings per share. In the absence of the net loss, 256.1 weighted average common shares outstanding and dilutive potential common shares would have been used in the calculation. [2] Calculated using weighted average common shares outstanding and dilutive potential common shares of 256.1.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE FINANCIAL HIGHLIGHTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ------------ ------------ ----------- ----------- REVENUES Investment Products Individual Annuity $ 383 $ 391 $ 379 $ 386 Other Investment Products 427 375 382 384 ---------------------------------------------------------------------------------------------------------------- Total Investment Products 810 766 761 770 Individual Life 232 249 239 238 Group Benefits 644 654 645 639 Corporate Owned Life Insurance 160 146 145 141 Other (10) (117) (125) (52) ---------------------------------------------------------------------------------------------------------------- TOTAL REVENUES $ 1,836 $ 1,698 $ 1,665 $ 1,736 - -------------------------------------------------------------------------------------------------------------------- NET INCOME Investment Products Individual Annuity $ 90 $ 89 $ 76 $ 78 Other Investment Products 27 29 24 19 ---------------------------------------------------------------------------------------------------------------- Total Investment Products 117 118 100 97 Individual Life 31 35 33 34 Group Benefits 28 30 34 36 Corporate Owned Life Insurance - 10 10 12 Other (6) (92) (16) (54) ---------------------------------------------------------------------------------------------------------------- NET INCOME 170 101 161 125 Net realized capital losses, after-tax (7) (76) (71) (42) ---------------------------------------------------------------------------------------------------------------- OPERATING INCOME $ 177 $ 177 $ 232 $ 167 - -------------------------------------------------------------------------------------------------------------------- ROE (net income last 12 months-equity including AOCI) [1] 17.0% 14.9% 11.0% 10.8% ROE (operating income last 12 months-equity excluding AOCI) [1] 19.7% 19.2% 16.9% 16.0% Assets under management $172,779 $165,422 $157,495 $165,115 DAC capitalization DAC amortization DAC and PVFP assets Statutory net loss (YTD) $ (137) Statutory surplus $ 3,019 - -------------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ------------- --------------------------- REVENUES Investment Products Individual Annuity $ 385 1% - Other Investment Products 388 (9%) 1% -------------------------------------------------------------------------------------------------------- Total Investment Products 773 (5%) - Individual Life 244 5% 3% Group Benefits 667 4% 4% Corporate Owned Life Insurance 127 (21%) (10%) Other (25) (150%) 52% -------------------------------------------------------------------------------------------------------- TOTAL REVENUES $ 1,786 (3%) 3% - ------------------------------------------------------------------------------------------------------------ NET INCOME Investment Products Individual Annuity $ 71 (21%) (9%) Other Investment Products 27 - 42% -------------------------------------------------------------------------------------------------------- Total Investment Products 98 (16%) 1% Individual Life 32 3% (6%) Group Benefits 34 21% (6%) Corporate Owned Life Insurance 10 NM (17%) Other (48) NM 11% -------------------------------------------------------------------------------------------------------- NET INCOME 126 (26%) 1% Net realized capital losses, after-tax (31) NM 26% -------------------------------------------------------------------------------------------------------- OPERATING INCOME $ 157 (11%) (6%) - ------------------------------------------------------------------------------------------------------------ ROE (net income last 12 months-equity including AOCI) [1] 9.8% (7.2) (1.0) ROE (operating income last 12 months-equity excluding AOCI) [1] 15.2% (4.3) (0.8) Assets under management $ 168,173 (3%) 2% DAC capitalization $ 342 DAC amortization $ 163 DAC and PVFP assets $ 5,904 Statutory net loss (YTD) Statutory surplus - ------------------------------------------------------------------------------------------------------------ [1] The quarters ending March 31, 2002 and June 30, 2002 exclude the $20 loss related to September 11, 2001.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE OPERATING RESULTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ------------ ----------- ----------- ----------- REVENUES Earned premiums $ 709 $ 664 $ 667 $ 657 Fee income 662 672 627 616 Net investment income 448 450 462 498 Other revenue 32 32 27 29 Net realized capital losses (15) (120) (118) (64) ---------------------------------------------------------------------------------------------------------- TOTAL REVENUES 1,836 1,698 1,665 1,736 - ------------------------------------------------------------------------------------------------------------------ BENEFITS AND EXPENSES Benefits, claims, and claim adjustment expenses 1,057 1,028 1,050 1,023 Insurance operating costs and expenses 357 358 335 388 Amortization of deferred policy acquisition costs and present value of future profits 152 171 163 142 Other expenses 48 32 34 30 ---------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 1,614 1,589 1,582 1,583 - ------------------------------------------------------------------------------------------------------------------ NET INCOME INCOME BEFORE INCOME TAXES 222 109 83 153 Income tax expense (benefit) [1] 52 8 (78) 28 ---------------------------------------------------------------------------------------------------------- NET INCOME 170 101 161 125 Net realized capital losses, after-tax (7) (76) (71) (42) ---------------------------------------------------------------------------------------------------------- OPERATING INCOME $ 177 $ 177 $ 232 $ 167 - ------------------------------------------------------------------------------------------------------------------ Effective tax rate - net income [1] 23.4% 7.3% (94.0%) 18.3% Effective tax rate - operating income [1] 25.3% 22.7% (15.4%) 23.0% YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ------------ ---------------------------- REVENUES Earned premiums $ 683 (4%) 4% Fee income 617 (7%) - Net investment income 507 13% 2% Other revenue 27 (16%) (7%) Net realized capital losses (48) NM 25% ------------------------------------------------------------------------------------------------- TOTAL REVENUES 1,786 (3%) 3% - --------------------------------------------------------------------------------------------------------- BENEFITS AND EXPENSES Benefits, claims, and claim adjustment expenses 1,083 2% 6% Insurance operating costs and expenses 351 (2%) (10%) Amortization of deferred policy acquisition costs and present value of future profits 163 7% 15% Other expenses 33 (31%) 10% ------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 1,630 1% 3% - --------------------------------------------------------------------------------------------------------- NET INCOME INCOME BEFORE INCOME TAXES 156 (30%) 2% Income tax expense (benefit) [1] 30 (42%) 7% ------------------------------------------------------------------------------------------------- NET INCOME 126 (26%) 1% Net realized capital losses, after-tax (31) NM 26% ------------------------------------------------------------------------------------------------- OPERATING INCOME $ 157 (11%) (6%) - --------------------------------------------------------------------------------------------------------- Effective tax rate - net income [1] 19.2% (4.2) 0.9 Effective tax rate - operating income [1] 23.0% (2.3) - [1] The quarter ended September 30, 2002 includes $76 of tax benefit in Life primarily related to the favorable treatment of certain tax items arising during the 1996-2002 tax years.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE TOTAL ASSETS UNDER MANAGEMENT/JAPAN DATA 1Q 2Q 3Q 4Q TOTAL ASSETS UNDER MANAGEMENT 2002 2002 2002 2002 - --------------------------------------------------------------- ------------- ------------- ------------- Assets General account $ 37,395 $ 39,029 $ 41,870 $ 42,716 Separate account 117,689 110,177 101,533 107,078 ----------------------------------------------------------------------------------------------------- TOTAL ASSETS 155,084 149,206 143,403 149,794 Mutual fund assets 17,695 16,216 14,092 15,321 ----------------------------------------------------------------------------------------------------- TOTAL ASSETS UNDER MANAGEMENT $172,779 $ 165,422 $ 157,495 $ 165,115 - ------------------------------------------------------------------------------------------------------------- JAPAN SALES Yen(Y) (Y) 18,649 (Y) 30,399 (Y) 35,284 (Y) 92,153 U.S.$ $ 140 $ 241 $ 295 $ 757 ----------------------------------------------------------- ACCOUNT VALUE Yen(Y) (Y) 71,244 (Y) 95,182 (Y) 120,692 (Y) 204,556 U.S.$ $ 537 $ 796 $ 991 $ 1,722 - ------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER TOTAL ASSETS UNDER MANAGEMENT 2003 CHANGE CHANGE - ------------------------------------------------ ------------ ------------ ------------ Assets General account $ 45,060 20% 5% Separate account 108,068 (8%) 1% ----------------------------------------------------------------------------------- TOTAL ASSETS 153,128 (1%) 2% Mutual fund assets 15,045 (15%) (2%) ----------------------------------------------------------------------------------- TOTAL ASSETS UNDER MANAGEMENT $ 168,173 (3%) 2% - ------------------------------------------------------------------------------------------- JAPAN SALES Yen(Y) (Y) 83,068 NM (10%) U.S.$ $ 700 NM (8%) ------------------------------------------- ACCOUNT VALUE Yen(Y) (Y) 273,880 NM 34% U.S.$ $ 2,319 NM 35% - -------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE CONSOLIDATED BALANCE SHEETS MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, 2002 2002 2002 2002 ------------- ------------ -------------- --------------- Investments Fixed maturities, available for sale, at fair value $ 23,558 $ 25,549 $ 28,539 $ 29,377 Equity securities, available for sale, at fair value 412 416 374 458 Policy loans, at outstanding balance 3,288 3,204 2,980 2,934 Other investments 1,346 1,227 1,359 1,122 - ---------------------------------------------------------------------------------------------------------------------------- Total investments 28,604 30,396 33,252 33,891 Cash and cash equivalents 142 118 194 179 Premiums receivable and agents' balances 270 208 198 208 Reinsurance recoverables 672 706 701 796 Deferred policy acquisition costs and present value of future profits 5,693 5,801 5,904 5,758 Deferred income tax (12) (204) (361) (274) Goodwill 796 796 796 796 Other assets 1,230 1,208 1,186 1,362 Separate account assets 117,689 110,177 101,533 107,078 - ---------------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS $155,084 $149,206 $ 143,403 $ 149,794 - ---------------------------------------------------------------------------------------------------------------------------- Future policy benefits $ 8,155 $ 8,274 $ 8,424 $ 8,583 Other policyholder funds and benefits payable 20,668 21,434 23,259 23,957 Unearned premiums 57 55 55 54 Long-term debt 1,050 1,050 1,050 1,125 Trust preferred securities 450 450 450 450 Other liabilities 2,431 2,811 2,995 2,858 Separate account liabilities 117,689 110,177 101,533 107,078 - ---------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 150,500 144,251 137,766 144,105 Equity x-AOCI, net of tax 4,568 4,652 4,796 4,980 AOCI, net of tax 16 303 841 709 - ---------------------------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 4,584 4,955 5,637 5,689 - ---------------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $155,084 $149,206 $ 143,403 $ 149,794 - ---------------------------------------------------------------------------------------------------------------------------- Hartford Life and Accident Insurance Company NAIC RBC 262% Hartford Life Insurance Company NAIC RBC 328% Hartford Life and Annuity Insurance Company NAIC RBC 343% YEAR OVER YEAR SEQUENTIAL MARCH 31, QUARTER QUARTER 2003 CHANGE CHANGE ------------ ------------- ------------ Investments Fixed maturities, available for sale, at fair value $ 31,676 34% 8% Equity securities, available for sale, at fair value 410 - (10%) Policy loans, at outstanding balance 2,876 (13%) (2%) Other investments 1,071 (20%) (5%) - -------------------------------------------------------------------------------------------------------- Total investments 36,033 26% 6% Cash and cash equivalents 289 104% 61% Premiums receivable and agents' balances 191 (29%) (8%) Reinsurance recoverables 865 29% 9% Deferred policy acquisition costs and present value of future profits 5,904 4% 3% Deferred income tax (347) NM (27%) Goodwill 796 - - Other assets 1,329 8% (2%) Separate account assets 108,068 (8%) 1% - -------------------------------------------------------------------------------------------------------- TOTAL ASSETS $153,128 (1%) 2% - -------------------------------------------------------------------------------------------------------- Future policy benefits $ 8,735 7% 2% Other policyholder funds and benefits payable 25,252 22% 5% Unearned premiums 52 (9%) (4%) Long-term debt 1,125 7% - Trust preferred securities 450 - - Other liabilities 3,555 46% 24% Separate account liabilities 108,068 (8%) 1% - -------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 147,237 (2%) 2% Equity x-AOCI, net of tax 5,089 11% 2% AOCI, net of tax 802 NM 13% - -------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 5,891 29% 4% - -------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $153,128 (1%) 2% - -------------------------------------------------------------------------------------------------------- Hartford Life and Accident Insurance Company NAIC RBC Hartford Life Insurance Company NAIC RBC Hartford Life and Annuity Insurance Company NAIC RBC
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE DEFERRED POLICY ACQUISITION COSTS AND PRESENT VALUE OF FUTURE PROFITS OTHER INDIVIDUAL INVESTMENT INDIVIDUAL GROUP ANNUITY PRODUCTS LIFE BENEFITS ------------ ------------- ------------- ---------- Quarter Ended March 31, 2003 - ---------------------------- Balance, December 31, 2002 $ 3,691 $ 226 $ 1,656 $ 43 Capitalization 205 34 51 7 Amortization - Deferred Acquisition Costs (84) (22) (40) (4) Amortization - Present Value of Future Profits (3) - (6) - Amortization - Realized Capital Gains - - - - Adjustments - Unrealized gains and losses on securities available-for-sale and other (18) (7) (10) - - ---------------------------------------------------------------------------------------------------------- Balance, March 31, 2003 $ 3,791 $ 231 $ 1,651 $ 46 - ---------------------------------------------------------------------------------------------------------- CORPORATE OWNED LIFE OTHER INSURANCE JAPAN LIFE TOTAL ------------- ----------- --------- ------------ Quarter Ended March 31, 2003 - ---------------------------- Balance, December 31, 2002 $ 12 $ 123 $ 7 $ 5,758 Capitalization 1 44 - 342 Amortization - Deferred Acquisition Costs - (4) - (154) Amortization - Present Value of Future Profits - - - (9) Amortization - Realized Capital Gains - - 2 2 Adjustments - Unrealized gains and losses on securities available-for-sale and other - - - (35) - --------------------------------------------------------------------------------------------------------- Balance, March 31, 2003 $ 13 $ 163 $ 9 $ 5,904 - ---------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE REINSURANCE RECOVERABLE ANALYSIS AS OF DECEMBER 31, 2002 STATUTORY RESERVE CREDIT AND AMOUNTS RECOVERABLE Gross statutory reinsurance reserve credit $ 2,047 Liability for reinsurance in unauthorized companies (62) -------------------------------------------------------------------------------------------------------------------------------- Net statutory reinsurance reserve credit $ 1,985 -------------------------------------------------------------------------------------------------------------------------------- Statutory amounts recoverable from reinsurers $ 218 --------------------------------------------------------------------------------------------------------------------------------
The top ten reinsurers represent $1,805, or 82%, of the total statutory reserve credit and amounts recoverable o 17% of this amount is with reinsurers rated "A++" by A.M. Best at May 9, 2003 o 29% of this amount is with reinsurers rated "A+" by A.M. Best at May 9, 2003 o 40% of this amount is with reinsurers rated "A" by A.M. Best at May 9, 2003 o 2% of this amount is with reinsurers rated "A-" by A.M. Best at May 9, 2003 o 10% of this amount is with reinsurers rated "B" by A.M. Best at May 9, 2003 o 2% of this amount is with reinsurers rated "B-" by A.M. Best at May 9, 2003 - 13 - THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE STATUTORY SURPLUS TO GAAP STOCKHOLDERS' EQUITY RECONCILIATION AS OF DECEMBER 31, 2002 Statutory Capital and Surplus $ 3,019 GAAP Adjustments Investments in subsidiaries (1,769) Deferred policy acquisition costs 5,758 Deferred taxes (445) Benefit reserves (2,887) Unrealized gains on investments, net of impairments 1,334 AVR and IMR 200 Goodwill 559 Other, net (80) - ------------------------------------------------------------------------------ GAAP Stockholders' Equity $ 5,689 - ------------------------------------------------------------------------------ - 14 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INCOME STATEMENTS INVESTMENT PRODUCTS - INDIVIDUAL ANNUITY YEAR OVER YEAR SEQUENTIAL 1Q 2Q 3Q 4Q 1Q QUARTER QUARTER REVENUES 2002 2002 2002 2002 2003 CHANGE CHANGE -------- -------- -------- --------- -------- --------------------- PREMIUMS AND OTHER CONSIDERATIONS Variable annuity and life fees $ 273 $ 270 $ 235 $ 233 $ 231 (15%) (1%) Cost of insurance charges - - - - - - - ASO fees - - - - - - - Other fees 33 40 44 40 38 15% (5%) ------------------------------------------------------------------------------------------------------------------------------ TOTAL FEE INCOME 306 310 279 273 269 (12%) (1%) Gross MVA/MGLI spread income 27 27 22 25 22 (19%) (12%) Investment expenses (1) (2) (2) (2) (2) (100%) - ------------------------------------------------------------------------------------------------------------------------------ NET GUARANTEED SEPARATE ACCOUNT INCOME 26 25 20 23 20 (23%) (13%) DIRECT PREMIUMS 19 21 26 21 28 47% 33% Reinsurance premiums (28) (29) (28) (28) (37) (32%) (32%) ------------------------------------------------------------------------------------------------------------------------------ TOTAL PREMIUMS AND OTHER CONSIDERATIONS 323 327 297 289 280 (13%) (3%) NET INVESTMENT INCOME Gross investment income on G/A assets 81 85 102 116 122 51% 5% Investment expenses - (1) (1) (1) (1) NM - ------------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME ON G/A ASSETS 81 84 101 115 121 49% 5% Net investment income on assigned capital 14 15 13 14 14 - - Charge for invested capital (35) (35) (32) (32) (30) 14% 6% ------------------------------------------------------------------------------------------------------------------------------ TOTAL NET INVESTMENT INCOME 60 64 82 97 105 75% 8% Realized capital losses - - - - - - - ------------------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 383 391 379 386 385 1% - BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 7 9 17 16 17 143% 6% Other contract benefits 21 24 25 28 28 33% - Change in reserve 6 7 11 5 12 100% 140% Interest credited on G/A assets 59 60 65 75 78 32% 4% ------------------------------------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND CLAIMS 93 100 118 124 135 45% 9% OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 189 185 178 232 230 22% (1%) Operating expenses 48 47 50 50 45 (6%) (10%) Premium taxes, licenses and fees 2 3 3 3 4 100% 33% Dividends to policyholders - - - - - - - Other miscellaneous expenses 2 2 3 2 2 - - ------------------------------------------------------------------------------------------------------------------------------ SUBTOTAL - EXPENSES BEFORE DEFERRAL 241 237 234 287 281 17% (2%) Deferred acquisition costs (163) (159) (155) (205) (205) (26%) - ------------------------------------------------------------------------------------------------------------------------------ TOTAL OTHER INSURANCE EXPENSE 78 78 79 82 76 (3%) (7%) Amortization of deferred acquisition costs and present value of future profit 97 100 89 84 87 (10%) 4% ------------------------------------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND EXPENSES 268 278 286 290 298 11% 3% INCOME BEFORE INCOME TAX EXPENSE 115 113 93 96 87 (24%) (9%) Income tax expense 25 24 17 18 16 (36%) (11%) ------------------------------------------------------------------------------------------------------------------------------ NET INCOME $ 90 $ 89 $ 76 $ 78 $ 71 (21%) (9%) ------------------------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INCOME STATEMENTS INVESTMENT PRODUCTS - OTHER YEAR OVER YEAR SEQUENTIAL 1Q 2Q 3Q 4Q 1Q QUARTER QUARTER REVENUES 2002 2002 2002 2002 2003 CHANGE CHANGE -------- -------- -------- -------- -------- -------- -------- PREMIUMS AND OTHER CONSIDERATIONS Variable annuity and life fees $ 17 $ 17 $ 16 $ 15 16 (6%) 7% Cost of insurance charges - - - - - - - ASO fees - - - - - - - Other fees 83 84 70 67 68 (18%) 1% -------------------------------------------------------------------------------------------------------------------------- TOTAL FEE INCOME 100 101 86 82 84 (16%) 2% Gross MVA/MGLI spread income - - - - - - - Investment expenses - - - - - - - -------------------------------------------------------------------------------------------------------------------------- NET GUARANTEED SEPARATE ACCOUNT INCOME - - - - - - - DIRECT PREMIUMS 141 86 99 98 100 (29%) 2% Reinsurance premiums - - (1) - - - - -------------------------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 241 187 184 180 184 (24%) 2% NET INVESTMENT INCOME Gross investment income on G/A assets 184 187 196 202 201 9% - Investment expenses (2) (3) (3) (3) (3) (50%) - -------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME ON G/A ASSETS 182 184 193 199 198 9% (1%) Net investment income on assigned capital 5 5 5 5 5 - - Charge for invested capital (1) (1) - - 1 NM NM -------------------------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 186 188 198 204 204 10% - Realized capital losses - - - - - - - ---------------------------------------------------------------------------------------------------------------------------- TOTAL REVENUES 427 375 382 384 388 (9%) 1% BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits - - - - - - - Other contract benefits 71 77 71 71 73 3% 3% Change in reserve 121 59 86 86 85 (30%) (1%) Interest credited on G/A assets 88 91 93 105 101 15% (4%) -------------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 280 227 250 262 259 (8%) (1%) OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 73 66 53 51 52 (29%) 2% Operating expenses 48 48 50 53 47 (2%) (11%) Premium taxes, licenses and fees - - - - - - - Dividends to policyholders - - - - - - - Other miscellaneous expenses 1 2 3 1 3 200% 200% -------------------------------------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 122 116 106 105 102 (16%) (3%) Deferred acquisition costs (32) (30) (28) (28) (34) (6%) (21%) -------------------------------------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 90 86 78 77 68 (24%) (12%) Amortization of deferred acquisition costs and present value of future profits 17 20 19 18 22 29% 22% -------------------------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 387 333 347 357 349 (10%) (2%) INCOME BEFORE INCOME TAX EXPENSE 40 42 35 27 39 (3%) 44% Income tax expense 13 13 11 8 12 (8%) 50% -------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 27 $ 29 $ 24 $ 19 27 - 42% --------------------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INVESTMENT PRODUCTS SUPPLEMENTAL DATA - SALES/OTHER DEPOSITS YEAR OVER YEAR SEQUENTIAL 1Q 2Q 3Q 4Q 1Q QUARTER QUARTER 2002 2002 2002 2002 2003 CHANGE CHANGE ---------- ---------- ---------- ---------- ---------- --------- --------- SALES INDIVIDUAL ANNUITY Broker-dealer $ 1,726 $ 1,761 $ 1,703 $ 2,544 $ 2,521 46% (1%) Banks 1,047 979 846 1,030 980 (6%) (5%) ------------------------------------------------------------------------------------------------------------------------ TOTAL SALES BY DISTRIBUTION $ 2,773 $ 2,740 $ 2,549 $ 3,574 $ 3,501 26% (2%) ------------------------------------------------------------------------------------------------------------------------ Variable $ 2,164 $ 2,308 $ 2,397 $ 3,479 $ 3,437 59% (1%) Fixed MVA/other 609 432 152 95 64 (89%) (33%) ------------------------------------------------------------------------------------------------------------------------ TOTAL SALES BY PRODUCT $ 2,773 $ 2,740 $ 2,549 $ 3,574 $ 3,501 26% (2%) ------------------------------------------------------------------------------------------------------------------------ RETAIL MUTUAL FUNDS $ 1,606 $ 1,419 $ 957 $ 843 $ 859 (47%) 2% CORPORATE Annuity $ 144 $ 277 $ 234 $ 346 $ 179 24% (48%) Mutual funds - 1 2 1 3 NM NM ------------------------------------------------------------------------------------------------------------------------ TOTAL CORPORATE $ 144 $ 278 $ 236 $ 347 $ 182 26% (48%) ------------------------------------------------------------------------------------------------------------------------ GOVERNMENTAL Annuity $ 53 $ 69 $ 165 $ 51 $ 77 45% 51% Mutual funds - - - - 8 NM NM ------------------------------------------------------------------------------------------------------------------------ TOTAL GOVERNMENTAL $ 53 $ 69 $ 165 $ 51 $ 85 60% 67% ------------------------------------------------------------------------------------------------------------------------ INSTITUTIONAL Structured settlements $ 88 $ 132 $ 113 $ 183 $ 144 64% (21%) Terminal funding 47 15 43 39 9 (81%) (77%) Mutual Funds - - - - 5 NM NM GIC/other 245 524 347 166 164 (33%) (1%) ------------------------------------------------------------------------------------------------------------------------ TOTAL INSTITUTIONAL $ 380 $ 671 $ 503 $ 388 $ 322 (15%) (17%) ------------------------------------------------------------------------------------------------------------------------ 529 COLLEGE SAVINGS PLANS AND OTHER PRODUCTS $ 6 $ 31 $ 27 $ 30 $ 36 NM 20% - -------------------------------------------------------------------------------------------------------------------------------- SALES & OTHER DEPOSITS INDIVIDUAL ANNUITY Variable $ 2,164 $ 2,308 $ 2,397 $ 3,479 $ 3,437 59% (1%) Fixed MVA/other 642 467 186 150 140 (78%) (7%) ------------------------------------------------------------------------------------------------------------------------ TOTAL INDIVIDUAL ANNUITY 2,806 2,775 2,583 3,629 3,577 27% (1%) ------------------------------------------------------------------------------------------------------------------------ RETAIL MUTUAL FUNDS 1,606 1,419 957 843 859 (47%) 2% CORPORATE Annuity 367 257 325 295 396 8% 34% Mutual funds 23 36 4 5 45 96% NM ------------------------------------------------------------------------------------------------------------------------ TOTAL CORPORATE 390 293 329 300 441 13% 47% ------------------------------------------------------------------------------------------------------------------------ GOVERNMENTAL Annuity 199 246 369 191 234 18% 23% Mutual funds - - 43 2 8 NM NM ------------------------------------------------------------------------------------------------------------------------ TOTAL GOVERNMENTAL 199 246 412 193 242 22% 25% ------------------------------------------------------------------------------------------------------------------------ INSTITUTIONAL Structured settlements 143 116 106 133 155 8% 17% Terminal funding 43 19 44 38 9 (79%) (76%) Mutual Funds - - - - 5 NM NM GIC/other 150 528 305 64 168 12% 163% ------------------------------------------------------------------------------------------------------------------------ TOTAL INSTITUTIONAL 336 663 455 235 337 - 43% ------------------------------------------------------------------------------------------------------------------------ 529 COLLEGE SAVINGS PLANS AND OTHER PRODUCTS 6 31 27 30 36 NM 20% --------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT PRODUCTS $ 5,343 $ 5,427 $ 4,763 $ 5,230 $ 5,492 3% 5% - --------------------------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INVESTMENT PRODUCTS SUPPLEMENTAL DATA - ASSETS UNDER MANAGEMENT 1Q 2Q 3Q 4Q 2002 2002 2002 2002 --------------- -------------- -------------- --------------- INDIVIDUAL ANNUITY General account $ 5,463 $ 5,985 $ 7,569 $ 8,583 Guaranteed separate account 9,219 9,562 9,684 9,721 Non-guaranteed separate account 70,442 62,578 52,878 56,604 ---------------------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY $ 85,124 $ 78,125 $ 70,131 $ 74,908 - --------------------------------------------------------------------------------------------------------------------------- OTHER INVESTMENT PRODUCTS General account $ 10,884 $ 11,233 $ 11,906 $ 11,913 Guaranteed separate account 403 408 429 417 Non-guaranteed separate account 8,607 7,870 7,033 7,591 ---------------------------------------------------------------------------------------------------------------------- TOTAL OTHER INVESTMENT PRODUCTS $ 19,894 $ 19,511 $ 19,368 $ 19,921 - --------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT PRODUCTS General account $ 16,347 $ 17,218 $ 19,475 $ 20,496 Guaranteed separate account 9,622 9,970 10,113 10,138 Non-guaranteed separate account 79,049 70,448 59,911 64,195 ---------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT PRODUCTS $105,018 $ 97,636 $ 89,499 $ 94,829 - --------------------------------------------------------------------------------------------------------------------------- BY PRODUCT INDIVIDUAL ANNUITY Individual Variable Annuities General account $ 4,608 $ 5,127 $ 6,704 $ 7,702 Separate account 70,436 62,585 52,914 56,641 ------------------------------------------------------------------------------------------------------------------- Total individual variable annuities 75,044 67,712 59,618 64,343 Fixed MVA & other individual annuities 10,080 10,413 10,513 10,565 -------------------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY 85,124 78,125 70,131 74,908 -------------------------------------------------------------------------------------------------------------------- CORPORATE - ANNUITY 2,800 2,751 2,759 2,972 GOVERNMENTAL - ANNUITY 7,745 7,298 6,890 7,211 INSTITUTIONAL Structured settlements 2,379 2,485 2,588 2,686 Terminal funding 1,900 1,899 1,944 1,978 Other 2,004 1,869 1,702 1,741 GIC 3,066 3,209 3,485 3,333 -------------------------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL 9,349 9,462 9,719 9,738 -------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT PRODUCTS ACCOUNT VALUE 105,018 97,636 89,499 94,829 SPECIALTY PRODUCTS/OTHER - SEGREGATED ASSETS - - - - MUTUAL FUND ASSETS Retail mutual fund assets 16,432 15,073 13,074 14,199 Corporate mutual fund assets 433 416 361 393 Governmental mutual fund assets 824 693 604 642 Specialty Product/Other mutual fund assets - - - - Institutional mutual fund assets - - - - 529 College Savings Plan assets 6 34 53 87 -------------------------------------------------------------------------------------------------------------------- TOTAL MUTUAL FUND ASSETS 17,695 16,216 14,092 15,321 -------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT PRODUCTS ASSETS UNDER MANAGEMENT $122,713 $113,852 $103,591 $ 110,150 - --------------------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE --------------- --------------- -------------- INDIVIDUAL ANNUITY General account $ 9,523 74% 11% Guaranteed separate account 9,747 6% - Non-guaranteed separate account 55,379 (21%) (2%) ------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY $ 74,649 (12%) - - ------------------------------------------------------------------------------------------------------------ OTHER INVESTMENT PRODUCTS General account $ 12,350 13% 4% Guaranteed separate account 407 1% (2%) Non-guaranteed separate account 7,617 (12%) - ------------------------------------------------------------------------------------------------------- TOTAL OTHER INVESTMENT PRODUCTS $ 20,374 2% 2% - ------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENT PRODUCTS General account $ 21,873 34% 7% Guaranteed separate account 10,154 6% - Non-guaranteed separate account 62,996 (20%) (2%) ------------------------------------------------------------------------------------------------------- TOTAL INVESTMENT PRODUCTS $ 95,023 (10%) - - ------------------------------------------------------------------------------------------------------------ BY PRODUCT INDIVIDUAL ANNUITY Individual Variable Annuities General account $ 8,620 87% 12% Separate account 55,427 (21%) (2%) ---------------------------------------------------------------------------------------------------- Total individual variable annuities 64,047 (15%) - Fixed MVA & other individual annuities 10,602 5% - ----------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY 74,649 (12%) - ----------------------------------------------------------------------------------------------------- CORPORATE - ANNUITY 3,212 15% 8% GOVERNMENTAL - ANNUITY 7,199 (7%) - INSTITUTIONAL Structured settlements 2,838 19% 6% Terminal funding 1,975 4% - Other 1,681 (16%) (3%) GIC 3,469 13% 4% ----------------------------------------------------------------------------------------------------- TOTAL INSTITUTIONAL 9,963 7% 2% ----------------------------------------------------------------------------------------------------- TOTAL INVESTMENT PRODUCTS ACCOUNT VALUE 95,023 (10%) - SPECIALTY PRODUCTS/OTHER - SEGREGATED ASSETS 7 - - MUTUAL FUND ASSETS Retail mutual fund assets 13,844 (16%) (3%) Corporate mutual fund assets 394 (9%) - Governmental mutual fund assets 609 (26%) (5%) Specialty Product/Other mutual fund assets 84 - - Institutional mutual fund assets 6 - - 529 College Savings Plan assets 108 NM 24% ----------------------------------------------------------------------------------------------------- TOTAL MUTUAL FUND ASSETS 15,045 (15%) (2%) ----------------------------------------------------------------------------------------------------- TOTAL INVESTMENT PRODUCTS ASSETS UNDER MANAGEMENT $ 110,075 (10%) - - ------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INVESTMENT PRODUCTS - INDIVIDUAL ANNUITY SUPPLEMENTAL DATA - ACCOUNT VALUE ROLLFORWARD [1] 1Q 2Q 3Q 4Q 1Q 2002 2002 2002 2002 2003 ---------- ---------- ---------- ---------- --------- VARIABLE ANNUITIES BEGINNING BALANCE $ 74,581 $ 75,044 $ 67,712 $ 59,618 $ 64,343 Sales/premium/other deposits 2,164 2,308 2,397 3,479 3,437 Change in market value/change in reserve/interest credited 121 (7,564) (8,265) 3,343 (1,634) Surrenders (1,522) (1,773) (1,957) (1,859) (1,800) Death benefits/annuitizations/other (295) (292) (265) (249) (307) Net exchanges (5) (11) (4) 11 8 -------------------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 75,044 $ 67,712 $ 59,618 $ 64,343 $ 64,047 - ----------------------------------------------------------------------------------------------------------------------------------- FIXED MVA AND OTHER BEGINNING BALANCE $ 9,572 $ 10,080 $ 10,413 $ 10,513 $ 10,565 Sales/premium/other deposits 642 467 186 150 140 Change in market value/change in reserve/interest credited 149 139 142 167 155 Surrenders (196) (188) (142) (163) (152) Death benefits/annuitizations/other (95) (99) (95) (92) (99) Net exchanges 8 14 9 (10) (7) -------------------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 10,080 $ 10,413 $ 10,513 $ 10,565 $ 10,602 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL ANNUITY BEGINNING BALANCE $ 84,153 $ 85,124 $ 78,125 $ 70,131 $ 74,908 Sales/premium/other deposits 2,806 2,775 2,583 3,629 3,577 Change in market value/change in reserve/interest credited 270 (7,425) (8,123) 3,510 (1,479) Surrenders (1,718) (1,961) (2,099) (2,022) (1,952) Death benefits/annuitizations/other (390) (391) (360) (341) (406) Net exchanges 3 3 5 1 1 -------------------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 85,124 $ 78,125 $ 70,131 $ 74,908 $ 74,649 - ----------------------------------------------------------------------------------------------------------------------------------- [1] Includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INVESTMENT PRODUCTS - OTHER SUPPLEMENTAL DATA - ACCOUNT VALUE AND ASSET ROLLFORWARD [1] 1Q 2Q 3Q 4Q 1Q 2002 2002 2002 2002 2003 ---------- -------- -------- -------- -------- OTHER INVESTMENT ACCOUNT VALUE ROLLFORWARD PRODUCTS (EXCLUDING ALL MUTUAL FUNDS) BEGINNING BALANCE $ 19,322 $ 19,894 $ 19,511 $ 19,368 $ 19,921 Sales/premium/other deposits 902 1,166 1,149 721 962 Change in market value/change in reserve/interest credited 122 (670) (754) 555 (39) Surrenders (321) (743) (409) (595) (348) Death benefits/annuitizations/other (131) (136) (129) (128) (122) ----------------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 19,894 $ 19,511 $ 19,368 $ 19,921 $ 20,374 - ------------------------------------------------------------------------------------------------------------------------------------ RETAIL MUTUAL FUNDS ASSET ROLLFORWARD BEGINNING BALANCE $ 15,907 $ 16,432 $ 15,073 $ 13,074 $ 14,199 New sales 1,606 1,419 957 843 859 Redemptions (592) (736) (815) (711) (741) ----------------------------------------------------------------------------------------------------------------- Net sales 1,014 683 142 132 118 Change in market value (85) (2,042) (2,137) 943 (473) Other (404) - (4) 50 - ----------------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 16,432 $ 15,073 $ 13,074 $ 14,199 $ 13,844 - ------------------------------------------------------------------------------------------------------------------------------------ [1] Account value includes policyholder balances for investment contracts and reserves for future policy benefits for insurance contracts.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INVESTMENT PRODUCTS SUPPLEMENTAL DATA - GUARANTEED MINIMUM DEATH BENEFITS [1] AS OF MARCH 31, 2003 ------------------------------------------------------------ ACCOUNT NET AMOUNT % OF NAR RETAINED VALUE AT RISK REINSURED NAR ------------- ------------ ------------ ------------- Maximum anniversary value (MAV) BREAKDOWN OF VARIABLE MAV only $ 50,054 $ 19,506 92% $ 1,576 ANNUITY ACCOUNT VALUE with 5% rollup [2] 2,307 783 89% 90 BY GMDB TYPE with Earnings Protection Benefit Rider (EPB) 1,677 264 74% 67 with 5% rollup & EPB 1,090 197 90% 19 -------------------------------------------------------------------------------------------------------- Total MAV 55,128 20,750 92% 1,752 Ratchet (5-7 years) [3] 6,901 2,432 0% 2,420 Reset (5-7 years) [4] 1,456 303 24% 231 Return of Premium/Other [5] 562 102 81% 20 -------------------------------------------------------------------------------------------------------- TOTAL $ 64,047 $ 23,587 81% $ 4,423 - --------------------------------------------------------------------------------------------------------------------------------- AS OF AS OF AS OF SEPTEMBER 30, DECEMBER 31, MARCH 31, OTHER DATA 2002 2002 2003 ------------ ------------ ------------- o S&P 500 Index Value at end of period 815.28 879.82 848.18 o Total account value $ 59,618 $ 64,343 $ 64,047 o Net amount at risk 25,905 22,387 23,587 o Retained net amount at risk 4,871 4,063 4,423 o GMDB net statutory reserve [6] 366 267 289 o Present value of retained guaranteed death benefits 184 159 191 o 95% Confidence interval of present value of retained guaranteed death benefits (91 - 378) (86 - 349) (108 - 396) ----------------------------------------------------------------------------------------------------------- o Embedded value of variable annuity in-force business [1] Value of in-force 2,258 2,510 2,332 Cost of capital (248) (284) (281) ----------------------------------------------------------------------------------------------------------- TOTAL EMBEDDED VALUE $ 2,010 $ 2,226 $ 2,051 - --------------------------------------------------------------------------------------------------------------------------------- [1] Significant Assumptions: (a) 9.25% cost of capital, (b) 9% separate account appreciation, (c) 35% effective tax rate. Excludes the value of statutory surplus required to support the in-force business. [2] Rollup: the death benefit is the greatest of current account value, net premium paid and premiums (adjusted for withdrawals) accumulated at generally 5% simple interest up to the earlier of age 80 or 100% of adjusted premiums. [3] Ratchet: the death benefit is the greatest of current account value, net premiums paid and the highest account value on any anniversary before age 85 (adjusted for withdrawals). [4] Reset: the death benefit is the greatest of current account value, net premiums paid and the most recent five year anniversary account value before age 80 (adjusted for withdrawals). [5] Return of premium: the death benefit is the greater of current account value and net premiums paid. [6] No Equivalent GAAP reserve.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INCOME STATEMENTS INDIVIDUAL LIFE 1Q 2Q 3Q 4Q REVENUES 2002 2002 2002 2002 ---------- ----------- ---------- ---------- PREMIUMS AND OTHER CONSIDERATIONS Variable annuity and life fees $ 11 $ 11 $ 9 $ 10 Cost of insurance charges 103 103 104 105 ASO fees - - - - Other fees 53 64 62 60 ------------------------------------------------------------------------------------------------------- TOTAL FEE INCOME 167 178 175 175 Gross MVA/MGLI spread income 3 2 3 2 Investment expenses - - - - ------------------------------------------------------------------------------------------------------- NET GUARANTEED SEPARATE ACCOUNT INCOME 3 2 3 2 Direct premiums 13 14 14 15 Net reinsurance premiums (14) (15) (17) (18) ------------------------------------------------------------------------------------------------------- NET PREMIUMS (1) (1) (3) (3) ------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 169 179 175 174 NET INVESTMENT INCOME Gross FAS 97 investment income on G/A assets 61 63 61 59 Gross FAS 60 investment income on G/A assets 8 13 11 12 ------------------------------------------------------------------------------------------------------- GROSS INVESTMENT INCOME ON G/A ASSETS 69 76 72 71 Investment expenses (1) - (1) (1) ------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME ON G/A ASSETS 68 76 71 70 Net investment income on assigned capital 4 4 3 4 Charge for invested capital (9) (10) (10) (10) ------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 63 70 64 64 Realized capital losses - - - - --------------------------------------------------------------------------------------------------------- TOTAL REVENUES 232 249 239 238 BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 64 57 50 61 Other contract benefits 4 7 7 5 Change in reserve (3) (4) (1) - Interest credited on G/A assets 49 52 48 47 ------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 114 112 104 113 OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 48 43 37 45 Operating expenses 44 48 45 48 Premium taxes, licenses and fees 8 8 8 7 Dividends to policyholders 1 1 1 - Other miscellaneous expenses - - - - ------------------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 101 100 91 100 Deferred acquisition costs (62) (60) (54) (57) ------------------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 39 40 37 43 Amortization of deferred acquisition costs and present value future profits 33 46 49 32 ------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 186 198 190 188 INCOME BEFORE INCOME TAX EXPENSE 46 51 49 50 Income tax expense 15 16 16 16 ------------------------------------------------------------------------------------------------------- NET INCOME $ 31 $ 35 $ 33 $ 34 ------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER REVENUES 2003 CHANGE CHANGE ---------- ---------- ----------- PREMIUMS AND OTHER CONSIDERATIONS Variable annuity and life fees $ 9 (18%) (10%) Cost of insurance charges 106 3% 1% ASO fees - - - Other fees 64 21% 7% ------------------------------------------------------------------------------------------------ TOTAL FEE INCOME 179 7% 2% Gross MVA/MGLI spread income 3 - 50% Investment expenses - - - ------------------------------------------------------------------------------------------------ NET GUARANTEED SEPARATE ACCOUNT INCOME 3 - 50% Direct premiums 14 8% (7%) Net reinsurance premiums (18) (29%) - ------------------------------------------------------------------------------------------------ NET PREMIUMS (4) NM (33%) ------------------------------------------------------------------------------------------------ TOTAL PREMIUMS AND OTHER CONSIDERATIONS 178 5% 2% NET INVESTMENT INCOME Gross FAS 97 investment income on G/A assets 62 2% 5% Gross FAS 60 investment income on G/A assets 11 38% (8%) ------------------------------------------------------------------------------------------------ GROSS INVESTMENT INCOME ON G/A ASSETS 73 6% 3% Investment expenses (1) - - ------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME ON G/A ASSETS 72 6% 3% Net investment income on assigned capital 4 - - Charge for invested capital (10) (11%) - ------------------------------------------------------------------------------------------------ TOTAL NET INVESTMENT INCOME 66 5% 3% Realized capital losses - - - -------------------------------------------------------------------------------------------------- TOTAL REVENUES 244 5% 3% BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 61 (5%) - Other contract benefits 5 25% - Change in reserve - 100% - Interest credited on G/A assets 46 (6%) (2%) ------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND CLAIMS 112 (2%) (1%) OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 37 (23%) (18%) Operating expenses 44 - (8%) Premium taxes, licenses and fees 8 - 14% Dividends to policyholders 1 - NM Other miscellaneous expenses - - - ------------------------------------------------------------------------------------------------ SUBTOTAL - EXPENSES BEFORE DEFERRAL 90 (11%) (10%) Deferred acquisition costs (51) 18% 11% ------------------------------------------------------------------------------------------------ TOTAL OTHER INSURANCE EXPENSE 39 - (9%) Amortization of deferred acquisition costs and present value future profits 46 39% 44% ------------------------------------------------------------------------------------------------ TOTAL BENEFITS AND EXPENSES 197 6% 5% INCOME BEFORE INCOME TAX EXPENSE 47 2% (6%) Income tax expense 15 - (6%) ------------------------------------------------------------------------------------------------ NET INCOME $ 32 3% (6%) ------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INDIVIDUAL LIFE SUPPLEMENTAL DATA 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ---------- --------- --------- --------- SALES BY DISTRIBUTION Wirehouse/regional broker-dealer/banks $ 16 $ 22 $ 17 $ 22 Independent broker-dealer/WFS 16 15 13 12 Life professional/other 12 7 7 14 -------------------------------------------------------------------------------------- TOTAL SALES BY DISTRIBUTION $ 44 $ 44 $ 37 $ 48 - -------------------------------------------------------------------------------------------------------------- SALES BY PRODUCT Variable life $ 38 $ 37 $ 30 $ 36 Universal life 3 5 5 9 Term life/other 3 2 2 3 -------------------------------------------------------------------------------------- TOTAL SALES BY PRODUCT $ 44 $ 44 $ 37 $ 48 - -------------------------------------------------------------------------------------------------------------- ACCOUNT VALUE General account $ 3,573 $ 3,600 $ 3,639 $ 3,658 Separate account 4,410 4,035 3,721 3,899 -------------------------------------------------------------------------------------- TOTAL ACCOUNT VALUE $ 7,983 $ 7,635 $ 7,360 $ 7,557 - -------------------------------------------------------------------------------------------------------------- ACCOUNT VALUE BY Variable life $ 4,119 $ 3,760 $ 3,458 $ 3,648 PRODUCT Universal life/interest sensitive whole life 3,091 3,097 3,146 3,139 Modified guaranteed life 687 685 683 680 Other 86 93 73 90 -------------------------------------------------------------------------------------- TOTAL ACCOUNT VALUE BY PRODUCT $ 7,983 $ 7,635 $ 7,360 $ 7,557 - -------------------------------------------------------------------------------------------------------------- LIFE INSURANCE IN FORCE Variable life $ 63,288 $ 64,930 $ 65,797 $ 66,715 Universal life/interest sensitive whole life 39,516 39,118 38,743 38,457 Term life 17,947 18,636 19,393 20,312 Modified guaranteed life 989 977 961 947 Other 195 235 244 249 -------------------------------------------------------------------------------------- TOTAL LIFE INSURANCE IN FORCE $121,935 $123,896 $125,138 $126,680 - -------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE --------- ----------- --------- SALES BY DISTRIBUTION Wirehouse/regional broker-dealer/banks $ 15 (6%) (32%) Independent broker-dealer/WFS 13 (19%) 8% Life professional/other 11 (8%) (21%) -------------------------------------------------------------------------- TOTAL SALES BY DISTRIBUTION $ 39 (11%) (19%) - -------------------------------------------------------------------------------------------------- SALES BY PRODUCT Variable life $ 26 (32%) (28%) Universal life 11 NM 22% Term life/other 2 (33%) (33%) -------------------------------------------------------------------------- TOTAL SALES BY PRODUCT $ 39 (11%) (19%) - -------------------------------------------------------------------------------------------------- ACCOUNT VALUE General account $ 3,682 3% 1% Separate account 3,901 (12%) - -------------------------------------------------------------------------- TOTAL ACCOUNT VALUE $ 7,583 (5%) - - -------------------------------------------------------------------------------------------------- ACCOUNT VALUE BY Variable life $ 3,673 (11%) 1% PRODUCT Universal life/interest sensitive whole li 3,144 2% - Modified guaranteed life 677 (1%) - Other 89 3% (1%) -------------------------------------------------------------------------- TOTAL ACCOUNT VALUE BY PRODUCT $ 7,583 (5%) - - -------------------------------------------------------------------------------------------------- LIFE INSURANCE IN FORCE Variable life $ 66,631 5% - Universal life/interest sensitive whole li 38,098 (4%) (1%) Term life 21,115 18% 4% Modified guaranteed life 933 (6%) (1%) Other 252 29% 1% -------------------------------------------------------------------------- TOTAL LIFE INSURANCE IN FORCE $127,029 4% - - --------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INDIVIDUAL LIFE SUPPLEMENTAL DATA - ACCOUNT VALUE ROLLFORWARD 1Q 2Q 3Q 4Q 1Q 2002 2002 2002 2002 2003 ---------- ---------- ----------- ---------- ---------- VARIABLE LIFE BEGINNING BALANCE $ 3,993 $ 4,119 $ 3,760 $ 3,458 $ 3,648 First year & single premiums 114 103 91 94 78 Renewal premiums 135 120 117 135 133 ------------------------------------------------------------------------------------------------------------- Premiums and deposits 249 223 208 229 211 Change in market value/interest credited 13 (428) (369) 127 (35) Surrenders (44) (58) (45) (65) (52) Death benefits/policy fees (95) (101) (98) (105) (104) Net exchanges 3 5 2 4 5 ------------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 4,119 $ 3,760 $ 3,458 $ 3,648 $ 3,673 - --------------------------------------------------------------------------------------------------------------------- OTHER [1] BEGINNING BALANCE $ 3,875 $ 3,864 $ 3,875 $ 3,902 $ 3,909 First year & single premiums 6 9 8 12 13 Renewal premiums 96 84 111 90 86 ------------------------------------------------------------------------------------------------------------- Premiums and deposits 102 93 119 102 99 Change in market value/interest credited 51 58 50 52 49 Surrenders (61) (49) (54) (55) (54) Death benefits/policy fees (100) (86) (86) (88) (88) Net exchanges (3) (5) (2) (4) (5) ------------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 3,864 $ 3,875 $ 3,902 $ 3,909 $ 3,910 - --------------------------------------------------------------------------------------------------------------------- TOTAL INDIVIDUAL LIFE BEGINNING BALANCE $ 7,868 $ 7,983 $ 7,635 $ 7,360 $ 7,557 First year & single premiums 120 112 99 106 91 Renewal premiums 231 204 228 225 219 ------------------------------------------------------------------------------------------------------------- Premiums and deposits 351 316 327 331 310 Change in market value/interest credited 64 (370) (319) 179 14 Surrenders (105) (107) (99) (120) (106) Death benefits/policy fees (195) (187) (184) (193) (192) Net exchanges - - - - - ------------------------------------------------------------------------------------------------------------- ENDING BALANCE $ 7,983 $ 7,635 $ 7,360 $ 7,557 $ 7,583 - --------------------------------------------------------------------------------------------------------------------- [1] Includes Universal Life, Interest Sensitive Whole Life, Modified Guaranteed Life Insurance and other.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE INCOME STATEMENTS GROUP BENEFITS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ---------- ---------- ---------- ---------- REVENUES PREMIUMS AND OTHER CONSIDERATIONS Variable annuity and life fees $ - $ - $ - $ - Cost of insurance charges - - - - ASO fees 5 4 6 4 Other fees - - - - ------------------------------------------------------------------------------------------------------- TOTAL FEE INCOME 5 4 6 4 Gross MVA/MGLI spread income - - - - Investment expenses - - - - ------------------------------------------------------------------------------------------------------- NET GUARANTEED SEPARATE ACCOUNT INCOME - - - - Direct premiums 579 591 572 576 Net reinsurance premiums (2) (5) 4 (7) ------------------------------------------------------------------------------------------------------- NET PREMIUMS 577 586 576 569 ------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 582 590 582 573 NET INVESTMENT INCOME Gross FAS 97 investment income on G/A assets - - - - Gross FAS 60 investment income on G/A assets 54 54 53 58 ------------------------------------------------------------------------------------------------------- GROSS INVESTMENT INCOME ON G/A ASSETS 54 54 53 58 Investment expenses (1) - (1) (1) ------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME ON G/A ASSETS 53 54 52 57 Net investment income on assigned capital 9 10 11 9 Charge for invested capital - - - - ------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 62 64 63 66 Realized capital losses - - - - --------------------------------------------------------------------------------------------------------- TOTAL REVENUES 644 654 645 639 BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 155 173 155 161 Other contract benefits 257 269 243 267 Change in reserve 62 44 73 19 Interest credited on G/A assets - - - - ------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 474 486 471 447 OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 60 55 54 61 Operating expenses 67 68 68 74 Premium taxes, licenses and fees 10 11 11 10 Dividends to policyholders - - - - Other miscellaneous expenses - - - (1) ------------------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 137 134 133 144 Deferred acquisition costs (6) (7) (6) (5) ------------------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 131 127 127 139 Amortization of deferred acquisition costs and present 4 3 4 6 value of future profits ------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 609 616 602 592 INCOME BEFORE INCOME TAX EXPENSE 35 38 43 47 Income tax expense 7 8 9 11 ------------------------------------------------------------------------------------------------------- NET INCOME $ 28 $ 30 $ 34 $ 36 ------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ---------- ------------ ------------ REVENUES PREMIUMS AND OTHER CONSIDERATIONS Variable annuity and life fees $ - - - Cost of insurance charges - - - ASO fees 6 20% 50% Other fees - - - -------------------------------------------------------------------------------------------- TOTAL FEE INCOME 6 20% 50% Gross MVA/MGLI spread income - - - Investment expenses - - - -------------------------------------------------------------------------------------------- NET GUARANTEED SEPARATE ACCOUNT INCOME - - - Direct premiums 569 (2%) (1%) Net reinsurance premiums 27 NM NM -------------------------------------------------------------------------------------------- NET PREMIUMS 596 3% 5% -------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND OTHER CONSIDERATIONS 602 3% 5% NET INVESTMENT INCOME Gross FAS 97 investment income on G/A assets - - - Gross FAS 60 investment income on G/A assets 56 4% (3%) -------------------------------------------------------------------------------------------- GROSS INVESTMENT INCOME ON G/A ASSETS 56 4% (3%) Investment expenses (1) - - -------------------------------------------------------------------------------------------- NET INVESTMENT INCOME ON G/A ASSETS 55 4% (4%) Net investment income on assigned capital 10 11% 11% Charge for invested capital - - - -------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME 65 5% (2%) Realized capital losses - - - ---------------------------------------------------------------------------------------------- TOTAL REVENUES 667 4% 4% BENEFITS AND EXPENSES BENEFITS AND CLAIMS Death benefits 175 13% 9% Other contract benefits 261 2% (2%) Change in reserve 53 (15%) 179% Interest credited on G/A assets - - - -------------------------------------------------------------------------------------------- TOTAL BENEFITS AND CLAIMS 489 3% 9% OTHER INSURANCE EXPENSES Commissions & wholesaling expenses 58 (3%) (5%) Operating expenses 69 3% (7%) Premium taxes, licenses and fees 12 20% 20% Dividends to policyholders - - - Other miscellaneous expenses (1) NM - -------------------------------------------------------------------------------------------- SUBTOTAL - EXPENSES BEFORE DEFERRAL 138 1% (4%) Deferred acquisition costs (7) (17%) (40%) -------------------------------------------------------------------------------------------- TOTAL OTHER INSURANCE EXPENSE 131 - (6%) Amortization of deferred acquisition costs and present 4 - (33%) value of future profits -------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 624 2% 5% INCOME BEFORE INCOME TAX EXPENSE 43 23% (9%) Income tax expense 9 29% (18%) -------------------------------------------------------------------------------------------- NET INCOME $ 34 21% (6%) --------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE GROUP BENEFITS SUPPLEMENTAL DATA 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------------- ----------------- ----------------- ----------------- PREMIUMS FULLY INSURED - ONGOING PREMIUMS Group disability $ 243 $ 249 $ 237 $ 232 Group life 233 252 240 240 Other 101 85 93 90 ------------------------------------------------------------------------------------------------------------------- TOTAL FULLY INSURED - ONGOING PREMIUMS 577 586 570 562 ------------------------------------------------------------------------------------------------------------------- Total buyouts [1] - - 6 7 ----------------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS 577 586 576 569 Group disability - premium equivalents [2] 57 57 63 55 ----------------------------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND PREMIUM EQUIVALENT CLAIMS $ 634 $ 643 $ 639 $ 624 - -------------------------------------------------------------------------------------------------------------------------- SALES (GROSS ANNUALIZED NEW PREMIUMS) FULLY INSURED - ONGOING SALES Group disability $ 113 $ 41 $ 36 $ 28 Group life 193 33 33 25 Other 48 16 19 12 ------------------------------------------------------------------------------------------------------------------- TOTAL FULLY INSURED - ONGOING SALES 354 90 88 65 ------------------------------------------------------------------------------------------------------------------- Total buyouts [1] - - 7 7 ----------------------------------------------------------------------------------------------------------------- TOTAL SALES 354 90 95 72 Group disability premium equivalents [2] 46 9 4 2 ----------------------------------------------------------------------------------------------------------------- TOTAL SALES AND PREMIUM EQUIVALENTS $ 400 $ 99 $ 99 $ 74 - -------------------------------------------------------------------------------------------------------------------------- LOSS RATIO Loss ratio excluding buyouts 81.4% 82.4% 80.7% 77.7% - -------------------------------------------------------------------------------------------------------------------------- GAAP RESERVES Group disability $ 2,396 $ 2,443 $ 2,479 $ 2,489 Group life 722 734 758 765 Other 207 188 195 201 ----------------------------------------------------------------------------------------------------------------- TOTAL GAAP RESERVES $ 3,325 $ 3,365 $ 3,432 $ 3,455 - -------------------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ---------------- ----------------- ----------------- PREMIUMS FULLY INSURED - ONGOING PREMIUMS Group disability $ 243 - 5% Group life 243 4% 1% Other 82 (19%) (9%) ------------------------------------------------------------------------------------------------ TOTAL FULLY INSURED - ONGOING PREMIUMS 568 (2%) 1% ------------------------------------------------------------------------------------------------ Total buyouts [1] 28 NM NM ---------------------------------------------------------------------------------------------- TOTAL PREMIUMS 596 3% 5% Group disability - premium equivalents [2] 50 (12%) (9%) ---------------------------------------------------------------------------------------------- TOTAL PREMIUMS AND PREMIUM EQUIVALENT CLAIMS $ 646 2% 4% - ------------------------------------------------------------------------------------------------------- SALES (GROSS ANNUALIZED NEW PREMIUMS) FULLY INSURED - ONGOING SALES Group disability $ 103 (9%) NM Group life 89 (54%) NM Other 30 (38%) 150% ------------------------------------------------------------------------------------------------ TOTAL FULLY INSURED - ONGOING SALES 222 (37%) NM ------------------------------------------------------------------------------------------------ Total buyouts [1] 26 NM NM ---------------------------------------------------------------------------------------------- TOTAL SALES 248 (30%) NM Group disability premium equivalents [2] 24 (48%) NM ---------------------------------------------------------------------------------------------- TOTAL SALES AND PREMIUM EQUIVALENTS $ 272 (32%) NM - ------------------------------------------------------------------------------------------------------- LOSS RATIO Loss ratio excluding buyouts 80.3% (1.1) 2.6 - ------------------------------------------------------------------------------------------------------- GAAP RESERVES Group disability $ 2,516 5% 1% Group life 799 11% 4% Other 186 (10%) (7%) ---------------------------------------------------------------------------------------------- TOTAL GAAP RESERVES $ 3,501 5% 1% - ------------------------------------------------------------------------------------------------------- [1] Takeover of open claim liabilities and other non-recurring premium amounts. [2] Administrative services only (ASO) fees and claims under claim management agreements.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY FINANCIAL HIGHLIGHTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 --------- --------- --------- --------- GAAP NORTH AMERICAN UNDERWRITING RESULTS Written premiums $ 2,065 $ 2,138 $ 2,196 $ 2,128 Earned premiums 1,859 1,955 2,088 2,143 Business Insurance 4 (8) 21 27 Personal Lines (11) (24) (13) 2 Specialty Commercial (10) 8 3 (24) Reinsurance (4) (9) (4) (42) ---------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ (21) $ (33) $ 7 $ (37) - --------------------------------------------------------------------------------------------------------------------- GAAP NORTH AMERICAN UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 59.2 60.6 59.1 59.6 ---------------------------------------------------------------------------------------------------------------- Loss adjustment expenses 11.6 11.1 10.9 11.4 Expenses 29.0 28.0 28.0 28.3 ---------------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 40.6 39.1 38.9 39.6 ---------------------------------------------------------------------------------------------------------------- Policyholder dividends 0.5 0.9 0.7 0.8 ---------------------------------------------------------------------------------------------------------------- COMBINED RATIO 100.2 100.5 98.7 100.0 - --------------------------------------------------------------------------------------------------------------------- Catastrophe ratio 1.1 2.5 1.1 0.8 - --------------------------------------------------------------------------------------------------------------------- NORTH AMERICAN INCOME AND ROE Net income $ 127 $ 101 $ 119 $ 135 Operating income 122 119 138 140 Net income ROE (last 12 months income-equity AOCI) [1] 8.2% 8.5% 9.3% 11.6% Operating income ROE (last 12 months income-equity x-AOCI) [1] 11.9% 12.1% 13.4% 14.1% PROPERTY & CASUALTY INCOME AND ROE Net income $ 128 $ 90 $ 110 $ 141 Operating income 122 120 139 142 Impact of 2003 asbestos reserve addition - - - - Operating income before impact of 2003 asbestos reserve addition 122 120 139 142 Net income ROE (last 12 months income-equity AOCI) [1] 7.8% 7.8% 8.3% 10.4% Operating income ROE (last 12 months income-equity x-AOCI) [1] 11.1% 11.4% 12.6% 13.1% Operating income ROE (last 12 months income-equity x-AOCI) excluding the impact of the 2003 asbestos reserve addition [1] [2] 11.1% 11.4% 12.6% 13.1% - --------------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE --------- ---------- ---------- GAAP NORTH AMERICAN UNDERWRITING RESULTS Written premiums $ 2,440 18% 15% Earned premiums 2,158 16% 1% Business Insurance (12) NM NM Personal Lines 52 NM NM Specialty Commercial - 100% 100% Reinsurance (19) NM 55% --------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ 21 NM NM - -------------------------------------------------------------------------------------------------------------- GAAP NORTH AMERICAN UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 58.9 0.3 0.7 --------------------------------------------------------------------------------------------------------- Loss adjustment expenses 12.1 (0.5) (0.7) Expenses 26.2 2.8 2.1 --------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 38.4 2.2 1.2 --------------------------------------------------------------------------------------------------------- Policyholder dividends 0.4 0.1 0.4 --------------------------------------------------------------------------------------------------------- COMBINED RATIO 97.7 2.5 2.3 - -------------------------------------------------------------------------------------------------------------- Catastrophe ratio 2.6 (1.5) (1.8) - -------------------------------------------------------------------------------------------------------------- NORTH AMERICAN INCOME AND ROE Net income $ 168 32% 24% Operating income 177 45% 26% Net income ROE (last 12 months income-equity AOCI) [1] 12.3% 4.1 0.7 Operating income ROE (last 12 months income-equity x-AOCI) [1] 15.2% 3.3 1.1 PROPERTY & CASUALTY INCOME AND ROE Net income $ (1,513) NM NM Operating income (1,510) NM NM Impact of 2003 asbestos reserve addition (1,701) - - Operating income before impact of 2003 asbestos reserve addition 191 57% 35% Net income ROE (last 12 months income-equity AOCI) [1] (31.0%) (38.8) (41.4) Operating income ROE (last 12 months income-equity x-AOCI) [1] (33.9%) (45.0) (47.0) Operating income ROE (last 12 months income-equity x-AOCI) excluding the impact of the 2003 asbestos reserve addition [1] [2] 14.4% 3.3 1.3 - -------------------------------------------------------------------------------------------------------------- NORTH AMERICAN P&C OTHER OPERATIONS ------------------------------- -------------------------------- MAR. 31, DEC. 31, MAR. 31, DEC. 31, 2003 2002 VARIANCE 2003 2002 VARIANCE --------- --------- --------- --------- --------- ---------- SELECTED FINANCIAL DATA Investments $ 18,703 $ 18,137 3% $ 2,526 $ 2,436 4% Gross loss & LAE reserves 13,261 13,007 2% 7,951 4,084 95% Net loss & LAE reserves 10,445 10,206 2% 5,466 2,935 86% Net asbestos and environmental reserves 23 24 (4%) 4,221 1,685 151% Equity x-AOCI, net of tax 4,015 3,951 2% (1,352) 311 NM Equity including AOCI 4,699 4,567 3% (1,255) 403 NM Hartford Fire Pool adjusted statutory surplus 2,964 4,600 (36%) Hartford Fire Pool premium to adjusted surplus ratio 2.9 1.8 1.1 Hartford Fire Pool statutory net income (1,745) 4,794 NM - -------------------------------------------------------------------------------------------------------------------------- PROPERTY & CASUALTY -------------------------------- MAR. 31, DEC. 31, 2003 2002 VARIANCE ---------- --------- --------- SELECTED FINANCIAL DATA Investments $ 21,229 $ 20,573 3% Gross loss & LAE reserves 21,212 17,091 24% Net loss & LAE reserves 15,911 13,141 21% Net asbestos and environmental reserves 4,244 1,709 148% Equity x-AOCI, net of tax 2,663 4,262 (38%) Equity including AOCI 3,444 4,970 (31%) Hartford Fire Pool adjusted statutory surplus Hartford Fire Pool premium to adjusted surplus ratio Hartford Fire Pool statutory net income - ------------------------------------------------------------------------------------------- [1] The quarters ending March 31, 2002 and June 30, 2002 exclude the $420 earnings impact related to September 11, 2001. [2] ROE calculated excluding the earnings and equity impacts of the 2003 asbestos reserve addition.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY OPERATING RESULTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------- ---------- ----------- ---------- GAAP NORTH AMERICAN UNDERWRITING RESULTS Written premiums $ 2,065 $ 2,138 $ 2,196 $ 2,128 Change in reserve 206 183 108 (15) ---------------------------------------------------------------------------------------------------------------------- Earned premiums 1,859 1,955 2,088 2,143 Loss and loss adjustment expenses 1,315 1,401 1,462 1,521 Underwriting expenses 540 546 585 605 Dividends to policyholders 9 17 14 17 Other adjustments 16 24 20 37 ---------------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS (21) (33) 7 (37) Net servicing income 2 1 4 8 Net investment income 217 234 225 252 Net realized capital gains (losses) 7 (28) (28) (7) Other expenses (51) (58) (75) (59) ---------------------------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 154 116 133 157 Income tax expense 27 15 14 22 ---------------------------------------------------------------------------------------------------------------------- NET INCOME 127 101 119 135 Less: Net realized capital gains (losses), after-tax 5 (18) (19) (5) ---------------------------------------------------------------------------------------------------------------------- OPERATING INCOME 122 119 138 140 - ---------------------------------------------------------------------------------------------------------------------------- OTHER OPERATIONS Net income (loss) $ 1 $ (11) $ (9) $ 6 Operating income (loss) $ - $ 1 $ 1 $ 2 Impact of 2003 asbestos reserve addition $ - $ - $ - $ - Operating income before impact of 2003 asbestos reserve addition $ - $ 1 $ 1 $ 2 - ---------------------------------------------------------------------------------------------------------------------------- PROPERTY & CASUALTY Net income (loss) $ 128 $ 90 $ 110 $ 141 Operating income (loss) $ 122 $ 120 $ 139 $ 142 Impact of 2003 asbestos reserve addition $ - $ - $ - $ - Operating income before impact of 2003 asbestos reserve addition $ 122 $ 120 $ 139 $ 142 - ---------------------------------------------------------------------------------------------------------------------------- North American effective tax rate - net income 17.8% 12.5% 10.4% 14.2% North American effective tax rate - operating income 17.0% 16.8% 14.8% 15.0% - ---------------------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ---------- ------------ ----------- GAAP NORTH AMERICAN UNDERWRITING RESULTS Written premiums $ 2,440 18% 15% Change in reserve 282 37% NM -------------------------------------------------------------------------------------------------------------- Earned premiums 2,158 16% 1% Loss and loss adjustment expenses 1,532 17% 1% Underwriting expenses 566 5% (6%) Dividends to policyholders 10 11% (41%) Other adjustments 29 81% (22%) -------------------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS 21 NM NM Net servicing income 3 50% (63%) Net investment income 243 12% (4%) Net realized capital gains (losses) (15) NM (114%) Other expenses (45) 12% 24% -------------------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 207 34% 32% Income tax expense 39 44% 77% -------------------------------------------------------------------------------------------------------------- NET INCOME 168 32% 24% Less: Net realized capital gains (losses), after-tax (9) NM (80%) -------------------------------------------------------------------------------------------------------------- OPERATING INCOME 177 45% 26% - -------------------------------------------------------------------------------------------------------------------- OTHER OPERATIONS Net income (loss) $ (1,681) NM NM Operating income (loss) $ (1,687) NM NM Impact of 2003 asbestos reserve addition $ (1,701) - - Operating income before impact of 2003 asbestos reserve addition $ 14 - NM - -------------------------------------------------------------------------------------------------------------------- PROPERTY & CASUALTY Net income (loss) $ (1,513) NM NM Operating income (loss) $ (1,510) NM NM Impact of 2003 asbestos reserve addition $ (1,701) - - Operating income before impact of 2003 asbestos reserve addition $ 191 57% 35% - -------------------------------------------------------------------------------------------------------------------- North American effective tax rate - net income 18.9% 1.1 4.7 North American effective tax rate - operating income 19.9% 2.9 4.9 - --------------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY BUSINESS INSURANCE UNDERWRITING RESULTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------- ----------- ----------- ----------- GAAP UNDERWRITING RESULTS Written premiums $ 825 $ 835 $ 867 $ 885 Change in reserve 93 69 72 52 ----------------------------------------------------------------------------------------------------- Earned premiums 732 766 795 833 Loss and loss adjustment expenses 466 497 489 510 Underwriting expenses 244 247 260 271 Dividends to policyholders 7 15 13 13 Other adjustments 11 15 12 12 ----------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ 4 $ (8) $ 21 $ 27 - ----------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 51.6 53.3 50.1 48.2 ----------------------------------------------------------------------------------------------------- Loss adjustment expenses 12.0 11.5 11.5 13.0 Expenses 33.4 32.2 32.7 32.6 ----------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 45.4 43.7 44.2 45.6 ----------------------------------------------------------------------------------------------------- Policyholder dividends 1.0 2.0 1.6 1.6 ----------------------------------------------------------------------------------------------------- COMBINED RATIO 98.0 99.0 95.9 95.4 - ----------------------------------------------------------------------------------------------------------- Catastrophe ratio 0.6 1.3 0.7 0.4 - ----------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ---------- ------------ ------------ GAAP UNDERWRITING RESULTS Written premiums $ 990 20% 12% Change in reserve 110 18% 112% --------------------------------------------------------------------------------------------- Earned premiums 880 20% 6% Loss and loss adjustment expenses 598 28% 17% Underwriting expenses 268 10% (1%) Dividends to policyholders 7 - (46%) Other adjustments 19 73% 58% --------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ (12) NM NM - --------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 55.0 (3.4) (6.8) --------------------------------------------------------------------------------------------- Loss adjustment expenses 12.9 (0.9) 0.1 Expenses 30.5 2.9 2.1 --------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 43.4 2.0 2.2 --------------------------------------------------------------------------------------------- Policyholder dividends 0.8 0.2 0.8 --------------------------------------------------------------------------------------------- COMBINED RATIO 99.2 (1.2) (3.8) - --------------------------------------------------------------------------------------------------- Catastrophe ratio 4.6 (4.0) (4.2) - ---------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY BUSINESS INSURANCE WRITTEN AND EARNED PREMIUMS YEAR OVER YEAR SEQUENTIAL 1Q 2Q 3Q 4Q 1Q QUARTER QUARTER 2002 2002 2002 2002 2003 CHANGE CHANGE ------------ ------------ ------------ ------------- ----------- ------------ ------------ WRITTEN PREMIUMS [1] Small Commercial $ 408 $ 412 $ 418 $ 440 $ 480 18% 9% Middle Market 417 423 449 445 510 22% 15% ----------------------------------------------------------------------------------------------------------------------------- TOTAL $ 825 $ 835 $ 867 $ 885 $ 990 20% 12% EARNED PREMIUMS [1] Small Commercial $ 369 $ 382 $ 391 $ 413 $ 430 17% 4% Middle Market 363 384 404 420 450 24% 7% ----------------------------------------------------------------------------------------------------------------------------- TOTAL $ 732 $ 766 $ 795 $ 833 $ 880 20% 6% - -------------------------------------------------------------------------------------------------------------------------------- [1] The difference between written premiums and earned premiums is attributable to the change in unearned premium reserve.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY PERSONAL LINES UNDERWRITING RESULTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------- ------------ ------------ ------------ GAAP UNDERWRITING RESULTS Written premiums $ 726 $ 789 $ 779 $ 756 Change in reserve 8 47 21 (10) -------------------------------------------------------------------------------------------------------- Earned premiums 718 742 758 766 Loss and loss adjustment expenses 550 591 594 584 Underwriting expenses 176 171 173 176 Dividends to policyholders - - - - Other adjustments 3 4 4 4 ------------------------------------------------------------------------------------------------------ UNDERWRITING RESULTS $ (11) $ (24) $ (13) $ 2 - --------------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 65.0 67.5 67.0 64.8 -------------------------------------------------------------------------------------------------------- Loss adjustment expenses 11.8 12.2 11.1 11.4 Expenses 24.4 23.0 23.0 22.9 -------------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 36.2 35.2 34.1 34.3 -------------------------------------------------------------------------------------------------------- Policyholder dividends - - - - -------------------------------------------------------------------------------------------------------- COMBINED RATIO 101.2 102.7 101.1 99.2 - --------------------------------------------------------------------------------------------------------------- Catastrophe ratio 2.2 4.8 1.9 1.0 - --------------------------------------------------------------------------------------------------------------- GAAP COMBINED RATIO Automobile 103.6 102.9 101.2 104.6 Homeowners 92.5 102.0 100.7 80.6 -------------------------------------------------------------------------------------------------------- TOTAL 101.2 102.7 101.1 99.2 - --------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ------------ ------------ ------------- GAAP UNDERWRITING RESULTS Written premiums $ 770 6% 2% Change in reserve (2) NM 80% ----------------------------------------------------------------------------------------------- Earned premiums 772 8% 1% Loss and loss adjustment expenses 540 (2%) (8%) Underwriting expenses 176 - - Dividends to policyholders - - - Other adjustments 4 33% - --------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ 52 NM NM - ------------------------------------------------------------------------------------------------------ GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 58.4 6.6 6.4 ----------------------------------------------------------------------------------------------- Loss adjustment expenses 11.3 0.5 0.1 Expenses 23.0 1.4 (0.1) ----------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 34.2 2.0 0.1 ----------------------------------------------------------------------------------------------- Policyholder dividends - - - ----------------------------------------------------------------------------------------------- COMBINED RATIO 92.7 8.5 6.5 - ------------------------------------------------------------------------------------------------------ Catastrophe ratio 1.4 0.8 (0.4) - ------------------------------------------------------------------------------------------------------ GAAP COMBINED RATIO Automobile 96.1 7.5 8.5 Homeowners 80.8 11.7 (0.2) ----------------------------------------------------------------------------------------------- TOTAL 92.7 8.5 6.5 - ------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY PERSONAL LINES WRITTEN AND EARNED PREMIUMS YEAR OVER YEAR SEQUENTIAL 1Q 2Q 3Q 4Q 1Q QUARTER QUARTER 2002 2002 2002 2002 2003 CHANGE CHANGE --------- --------- ---------- --------- --------- --------------- --------------- BUSINESS UNIT WRITTEN PREMIUMS [1] AARP $ 427 $ 494 $ 479 $ 455 $ 475 11% 4% Other Affinity 49 45 43 42 42 (14%) - Agency 250 250 257 259 253 1% (2%) -------------------------------------------------------------------------------------------------------------------- TOTAL $ 726 $ 789 $ 779 $ 756 $ 770 6% 2% EARNED PREMIUMS [1] AARP $ 413 $ 431 $ 446 $ 457 $ 466 13% 2% Other Affinity 50 49 48 45 44 (12%) (2%) Agency 255 262 264 264 262 3% (1%) -------------------------------------------------------------------------------------------------------------------- TOTAL $ 718 $ 742 $ 758 $ 766 $ 772 8% 1% - --------------------------------------------------------------------------------------------------------------------------- PRODUCT LINE WRITTEN PREMIUMS [1] Automobile $ 583 $ 604 $ 587 $ 578 $ 609 4% 5% Homeowners 143 185 192 178 161 13% (10%) -------------------------------------------------------------------------------------------------------------------- TOTAL $ 726 $ 789 $ 779 $ 756 $ 770 6% 2% EARNED PREMIUMS [1] Automobile $ 563 $ 578 $ 591 $ 594 $ 598 6% 1% Homeowners 155 164 167 172 174 12% 1% -------------------------------------------------------------------------------------------------------------------- TOTAL $ 718 $ 742 $ 758 $ 766 $ 772 8% 1% - --------------------------------------------------------------------------------------------------------------------------- [1] The difference between written premiums and earned premiums is attributable to the change in unearned premium reserve.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY SPECIALTY COMMERCIAL UNDERWRITING RESULTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------- ----------- ----------- ----------- GAAP UNDERWRITING RESULTS Written premiums $ 300 $ 345 $ 383 $ 334 Change in reserve 62 70 26 (18) ----------------------------------------------------------------------------------------------------- Earned premiums 238 275 357 352 Loss and loss adjustment expenses 168 182 247 252 Underwriting expenses 76 78 102 102 Dividends to policyholders 2 2 1 4 Other adjustments 2 5 4 18 -------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ (10) $ 8 $ 3 $ (24) - ----------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 55.6 54.7 57.8 61.0 ----------------------------------------------------------------------------------------------------- Loss adjustment expenses 14.0 12.2 11.4 10.4 Expenses 32.5 28.4 28.1 29.1 ----------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 46.5 40.6 39.6 39.5 ----------------------------------------------------------------------------------------------------- Policyholder dividends 0.7 0.6 0.5 1.0 ----------------------------------------------------------------------------------------------------- COMBINED RATIO 102.8 96.0 97.8 101.5 - ----------------------------------------------------------------------------------------------------------- Catastrophe ratio - 0.3 0.5 1.0 - ----------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ---------- ------------ ------------ GAAP UNDERWRITING RESULTS Written premiums $ 406 35% 22% Change in reserve 51 (18%) NM ------------------------------------------------------------------------------------------- Earned premiums 355 49% 1% Loss and loss adjustment expenses 265 58% 5% Underwriting expenses 82 8% (20%) Dividends to policyholders 3 50% (25%) Other adjustments 5 150% (72%) ---------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ - 100% 100% - ------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 60.3 (4.7) 0.7 ------------------------------------------------------------------------------------------- Loss adjustment expenses 14.9 (0.9) (4.5) Expenses 22.6 9.9 6.5 ------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 37.4 9.1 2.1 ------------------------------------------------------------------------------------------- Policyholder dividends 0.7 - 0.3 ------------------------------------------------------------------------------------------- COMBINED RATIO 98.4 4.4 3.1 - ------------------------------------------------------------------------------------------------- Catastrophe ratio 0.9 (0.9) 0.1 - -------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY SPECIALTY COMMERCIAL WRITTEN AND EARNED PREMIUMS YEAR OVER YEAR SEQUENTIAL 1Q 2Q 3Q 4Q 1Q QUARTER QUARTER 2002 2002 2002 2002 2003 CHANGE CHANGE --------- --------- --------- ---------- ---------- --------------- --------------- WRITTEN PREMIUMS [1] Risk Management Division $ 65 $ 70 $ 58 $ 42 $ 105 62% 150% Property 91 105 139 70 97 7% 39% Casualty 60 77 98 86 82 37% (5%) Bond 36 40 43 38 45 25% 18% Professional Liability 43 50 71 75 65 51% (13%) Other 5 3 (26) 23 12 140% (48%) ------------------------------------------------------------------------------------------------------------------------ TOTAL $ 300 $ 345 $ 383 $ 334 $ 406 35% 22% EARNED PREMIUMS [1] Risk Management Division $ 45 $ 53 $ 58 $ 60 $ 76 69% 27% Property 60 73 118 95 89 48% (6%) Casualty 52 62 83 85 72 38% (15%) Bond 35 36 39 38 42 20% 11% Professional Liability 41 47 57 55 64 56% 16% Other 5 4 2 19 12 140% (37%) ------------------------------------------------------------------------------------------------------------------------ TOTAL $ 238 $ 275 $ 357 $ 352 $ 355 49% 1% - --------------------------------------------------------------------------------------------------------------------------- [1] The difference between written premiums and earned premiums is attributable to the change in unearned premium reserve.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY REINSURANCE UNDERWRITING RESULTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------- ----------- ----------- ----------- GAAP UNDERWRITING RESULTS Written premiums $ 214 $ 169 $ 167 $ 153 Change in reserve 43 (3) (11) (39) ----------------------------------------------------------------------------------------------------- Earned premiums 171 172 178 192 Loss and loss adjustment expenses 131 131 132 175 Underwriting expenses 44 50 50 56 Dividends to policyholders - - - - Other adjustments - - - 3 -------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS $ (4) $ (9) $ (4) $ (42) - ----------------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 72.3 72.5 68.3 85.5 ----------------------------------------------------------------------------------------------------- Loss adjustment expenses 5.0 2.8 6.2 5.6 Expenses 25.1 29.7 27.6 29.5 ----------------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 30.1 32.5 33.8 35.1 ----------------------------------------------------------------------------------------------------- Policyholder dividends - - - - ----------------------------------------------------------------------------------------------------- COMBINED RATIO 102.4 105.0 102.2 120.6 - ----------------------------------------------------------------------------------------------------------- Catastrophe ratio (0.5) 1.3 1.2 0.7 - ----------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ----------- ----------- ------------ GAAP UNDERWRITING RESULTS Written premiums $ 274 28% 79% Change in reserve 123 186% NM --------------------------------------------------------------------------------------------- Earned premiums 151 (12%) (21%) Loss and loss adjustment expenses 129 (2%) (26%) Underwriting expenses 40 (9%) (29%) Dividends to policyholders - - - Other adjustments 1 - (67%) ------------------------------------------------------------------------------------------ UNDERWRITING RESULTS $ (19) NM 55% - --------------------------------------------------------------------------------------------------- GAAP UNDERWRITING RATIOS LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 80.5 (8.2) 5.0 --------------------------------------------------------------------------------------------- Loss adjustment expenses 5.6 (0.6) - Expenses 26.4 (1.3) 3.1 --------------------------------------------------------------------------------------------- EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 32.0 (1.9) 3.1 --------------------------------------------------------------------------------------------- Policyholder dividends - - - --------------------------------------------------------------------------------------------- COMBINED RATIO 112.5 (10.1) 8.1 - --------------------------------------------------------------------------------------------------- Catastrophe ratio 1.5 (2.0) (0.8) - ---------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY REINSURANCE WRITTEN AND EARNED PREMIUMS YEAR OVER YEAR SEQUENTIAL 1Q 2Q 3Q 4Q 1Q QUARTER QUARTER 2002 2002 2002 2002 2003 CHANGE CHANGE --------- --------- --------- --------- --------- -------------- ------------ WRITTEN PREMIUMS [1] Traditional Reinsurance $ 149 $ 157 $ 162 $ 150 $ 240 61% 60% Alternative Risk Transfer (ART) 65 12 5 3 34 (48%) NM ----------------------------------------------------------------------------------------------------------------------------- TOTAL $ 214 $ 169 $ 167 $ 153 $ 274 28% 79% EARNED PREMIUMS [1] Traditional Reinsurance $ 145 $ 150 $ 155 $ 171 $ 135 (7%) (21%) Alternative Risk Transfer (ART) 26 22 23 21 16 (38%) (24%) ----------------------------------------------------------------------------------------------------------------------------- TOTAL $ 171 $ 172 $ 178 $ 192 $ 151 (12%) (21%) - -------------------------------------------------------------------------------------------------------------------------------- [1] The difference between written premiums and earned premiums is attributable to the change in unearned premium reserve.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR) 1Q 2Q 3Q 4Q 1Q 2002 2002 2002 2002 2003 ------------- -------------- -------------- -------------- -------------- WRITTEN PRICE INCREASES Business Insurance 15% 18% 18% 16% 13% Personal Lines Automobile 6% 7% 9% 11% 10% Personal Lines Homeowners 9% 12% 14% 17% 14% PREMIUM RETENTION Business Insurance 88% 87% 90% 89% 90% Personal Lines Automobile 88% 86% 88% 91% 90% Personal Lines Homeowners 97% 98% 100% 101% 103% NEW BUSINESS % TO NET WRITTEN PREMIUM Business Insurance 26% 26% 27% 26% 26% Personal Lines Automobile 21% 17% 15% 13% 13% Personal Lines Homeowners 11% 11% 11% 10% 8%
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY STATUTORY SURPLUS TO GAAP STOCKHOLDERS' EQUITY RECONCILIATION AS OF DECEMBER 31, 2002 Statutory Capital and Surplus $ 4,871 GAAP Adjustments Investment in subsidiaries/Capital contributions (1,543) Non-admitted assets/Statutory reserves 1,398 Deferred policy acquisition costs 930 Unrealized gains on investments, net of impairments 673 Deferred taxes (138) Benefit reserves (194) Consolidation/Corporate eliminations (785) Other, net (242) - ------------------------------------------------------------------------------------------------------------------- GAAP Stockholders' Equity $ 4,970 - -------------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY OPERATING RESULTS OTHER OPERATIONS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------- ---------- ----------- ----------- GAAP UNDERWRITING RESULTS Written premiums $ 18 $ 21 $ 9 $ 9 Change in reserve - - (10) (2) ------------------------------------------------------------------------------------------------------------ Earned premiums 18 21 19 11 Loss and loss adjustment expenses 43 51 43 34 Underwriting expenses 15 17 18 12 Dividends to policyholders - - - - Other adjustments - - - - ------------------------------------------------------------------------------------------------------------ UNDERWRITING RESULTS (40) (47) (42) (35) Net investment income 37 37 37 36 Net realized capital gains (losses) 1 (18) (14) 4 Other income (expenses) 4 11 7 3 ------------------------------------------------------------------------------------------------------------ INCOME (LOSS) BEFORE INCOME TAXES 2 (17) (12) 8 Income tax expense (benefit) 1 (6) (3) 2 ------------------------------------------------------------------------------------------------------------ NET INCOME (LOSS) 1 (11) (9) 6 Less: Net realized capital gains (losses), after-tax 1 (12) (10) 4 ------------------------------------------------------------------------------------------------------------ OPERATING INCOME (LOSS) $ - $ 1 $ 1 $ 2 - ------------------------------------------------------------------------------------------------------------------ YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ----------- ------------ ------------ GAAP UNDERWRITING RESULTS Written premiums $ 7 (61%) (22%) Change in reserve (1) - 50% -------------------------------------------------------------------------------------------------- Earned premiums 8 (56%) (27%) Loss and loss adjustment expenses 2,629 NM NM Underwriting expenses 12 (20%) - Dividends to policyholders - - - Other adjustments - - - -------------------------------------------------------------------------------------------------- UNDERWRITING RESULTS (2,633) NM NM Net investment income 42 14% 17% Net realized capital gains (losses) 10 NM 150% Other income (expenses) 5 25% 67% -------------------------------------------------------------------------------------------------- - - INCOME (LOSS) BEFORE INCOME TAXES (2,576) NM NM Income tax expense (benefit) (895) NM NM -------------------------------------------------------------------------------------------------- NET INCOME (LOSS) (1,681) NM NM Less: Net realized capital gains (losses), after-tax 6 NM 50% -------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) $(1,687) NM NM - --------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY OTHER OPERATIONS CLAIMS AND CLAIMS ADJUSTMENT EXPENSES FOR THE FIRST QUARTER ENDED MARCH 31, 2003 ------------------------------------------------------------------------------ ASBESTOS ENVIRONMENTAL ALL OTHER [1] TOTAL ------------ ------------------- ---------------- ------------ Beginning liability - net $ 1,118 $ 591 $ 1,250 $ 2,959 Claims and claim adjustment expenses incurred 2,604 1 25 2,630 Claims and claim adjustment expenses paid 37 33 30 100 - ----------------------------------------------------------------------------------------------------------------------------- ENDING LIABILITY - NET [2] [3] $ 3,685 [4] $ 559 $ 1,245 $ 5,489 - ----------------------------------------------------------------------------------------------------------------------------- [1] Includes unallocated loss adjustment expense reserves. [2] Ending liabilities include asbestos and environmental reserves reported in North American Property & Casualty of $14 and $9, respectively, as of March 31, 2003 and of $14 and $10, respectively, as of December 31, 2002. [3] Gross of reinsurance, asbestos and environmental reserves were $5,902 and $635, respectively, as of March 31, 2003 and $1,994 and $682, respectively, as of December 31, 2002. [4] As of March 31, 2003, the one year and average three year net paid amounts for asbestos claims are $149 and $99, respectively, resulting in one year and three year net survival ratios of 24.7 and 37.2 years, respectively.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY SUMMARY OF GROSS ASBESTOS RESERVES FOR THE FIRST QUARTER ENDED MARCH 31, 2003 ---------------------------------------------------------------------- % OF NUMBER OF ALL TIME TOTAL ASBESTOS ALL TIME ACCOUNTS PAID RESERVES RESERVES ULTIMATE ------------ ----------- ---------------------------------------- Major asbestos defendants Structured settlements (includes 2 Wellington accounts) 5 $ 203 $ 289 5% $ 492 Wellington (direct only) 31 612 316 5% 928 Other major asbestos defendants 29 150 449 8% 599 No known policies (includes 3 Wellington accounts) 5 - - - - Accounts with future exposure > $2.5 127 288 1,474 25% 1,762 Accounts with future exposure < $2.5 826 292 124 2% 416 Unallocated IBNR - - 1,810 30% 1,810 - ----------------------------------------------------------------------------------------------------------------------------------- Total direct [3] 1,545 4,462 75% 6,007 Assumed reinsurance 506 907 15% 1,413 London market 333 596 10% 929 - ----------------------------------------------------------------------------------------------------------------------------------- Subtotal [3] 2,384 5,965 100% 8,349 First quarter 2003 payments 63 (63) - - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL GROSS ASBESTOS RESERVES $2,447 $5,902 $8,349 - ----------------------------------------------------------------------------------------------------------------------------------- 3 YEAR GROSS 3 YEAR TOTAL SURVIVAL PAID LOSSES RATIO [1] [2] -------------------------------- (IN YEARS) Major asbestos defendants Structured settlements (includes 2 Wellington accounts) $ 86 10.1 Wellington (direct only) 250 3.8 Other major asbestos defendants 41 32.5 No known policies (includes 3 Wellington accounts) - - Accounts with future exposure > $2.5 104 42.7 Accounts with future exposure < $2.5 18 20.3 Unallocated IBNR - - - --------------------------------------------------------------------------------------------------- Total direct [3] 567 23.6 Assumed reinsurance 140 19.4 London market 75 23.8 - --------------------------------------------------------------------------------------------------- Subtotal [3] $ 782 22.9 First quarter 2003 payments - --------------------------------------------------------------------------------------------------- TOTAL GROSS ASBESTOS RESERVES - --------------------------------------------------------------------------------------------------- [1] Survival ratio provides an estimate of the number of years that reserves would be available at the current average claim payment rate. This is a gross three year survival ratio calculated by dividing gross reserves by the average three year paid losses. [2] The one year gross paid amount for total asbestos claims is $308 resulting in a one year gross survival ratio of 19.2 years. [3] Three year total paid losses include payments of $68 on closed claims (not presented by category).
- --------------------------------------------------------------------------------------------------------- RECONCILIATION OF GROSS ASBESTOS RESERVE FOR CEDED REINSURANCE Total gross asbestos reserves $5,902 Original ceded reinsurance (4,155) ----------- ORIGINAL NET 1,747 Add: Known settlements, commutations and known insolvencies 1,649 Provision for future unrecoverable reinsurance 289 ----------- TOTAL ENDING NET ASBESTOS RESERVES $3,685 - ---------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY PAID AND INCURRED LOSS AND LOSS ADJUSTMENT EXPENSE ("LAE") DEVELOPMENT - ASBESTOS AND ENVIRONMENTAL FOR THE FIRST QUARTER ENDED MARCH 31, 2003 -------------------------------------------------------------------------------- ASBESTOS ENVIRONMENTAL ------------------------------------- ------------------------------------- PAID INCURRED PAID INCURRED LOSS & LAE LOSS & LAE LOSS & LAE LOSS & LAE ----------------- ----------------- ----------------- ----------------- Gross Direct $ 55 $ 3,068 $ 43 $ 1 Assumed - Domestic 3 541 3 - London Market 5 363 2 - - ----------------------------------------------------------------------------------------------------------------------------------- Total 63 3,972 48 1 Ceded (26) (1,368) (15) - - ----------------------------------------------------------------------------------------------------------------------------------- NET $ 37 $ 2,604 $ 33 $ 1 - -----------------------------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSE RESERVE ROLLFORWARD YEAR TO DATE ENDED MARCH 31, 2003 ---------------------------------------------------------------------------------------- BUSINESS PERSONAL SPECIALTY OTHER TOTAL INSURANCE LINES COMMERCIAL REINSURANCE NAPC OPERATIONS P&C ----------- ----------- ------------ ------------ ---------- ------------ ----------- LIABILITIES FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES - GROSS $ 4,744 $ 1,692 $ 4,957 $ 1,614 $ 13,007 $ 4,084 $ 17,091 Reinsurance and other recoverables 366 49 1,998 388 2,801 1,149 3,950 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES - NET 4,378 1,643 2,959 1,226 10,206 2,935 13,141 Add: Provision for unpaid claims and claim adjustment expenses 598 540 265 129 1,532 2,629 4,161 Less: Payments 442 531 209 111 1,293 98 1,391 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES - NET 4,534 1,652 3,015 1,244 10,445 5,466 15,911 Reinsurance and other recoverables 388 48 2,007 373 2,816 2,485 5,301 - --------------------------------------------------------------------------------------------------------------------------------- LIABILITIES FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES - GROSS $ 4,922 $ 1,700 $ 5,022 $ 1,617 $ 13,261 $ 7,951 $ 21,212 - --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Earned premiums $ 880 $ 772 $ 355 $ 151 $ 2,158 $ 8 $ 2,166 GAAP combined ratio 99.2 92.7 98.4 112.5 97.7 Loss and loss expense paid ratio 50.2 68.6 59.1 74.6 59.9 Loss and loss expense incurred ratio 67.9 69.7 75.1 86.1 71.0 Catastrophe ratio 4.6 1.4 0.9 1.5 2.6 Prior accident year development (pts.) [1] - - - 23.2 1.6 - --------------------------------------------------------------------------------------------------------------------------------- [1] Reinsurance excludes prior accident year premium adjustment of $(10).
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY REINSURANCE RECOVERABLE ANALYSIS March 31, December 31, 2003 2002 --------------- ---------------- GROSS REINSURANCE RECOVERABLES [1] Paid Loss and Loss Adjustment Expense $ 542 $ 512 Unpaid Loss and Loss Adjustment Expense 5,554 3,930 ----------------------------------------------------------------------------------------------- Subtotal Gross Reinsurance Recoverables 6,096 4,442 Less: Allowance for Uncollectable Reinsurance (461) (211) ----------------------------------------------------------------------------------------------- NET PROPERTY & CASUALTY REINSURANCE RECOVERABLES $ 5,635 $ 4,231 - ----------------------------------------------------------------------------------------------------------------------------------- % of % of Rated DISTRIBUTION OF NET RECOVERABLES Amount Total Companies ----------------------------------------------- Net Property & Casualty Reinsurance Recoverables $ 4,231 Less: Mandatory (Assigned Risk) Pools (494) ----------------------------------------------------------------------------------------------- NET PROPERTY & CASUALTY REINSURANCE RECOVERABLE EXCLUDING MANDATORY POOLS $ 3,737 - ---------------------------------------------------------------------------------------------------- Rated A- (Excellent) or better by A.M. Best [2] $ 2,454 65.7% 91.1% Other Rated by A.M. Best [3] 239 6.4% 8.9% ------------------------------------------------------------------------------------------------------------------------------ Total Rated Companies 2,693 72.1% 100.0% Equitas Reinsurance Limited 322 8.6% Voluntary Pools 225 6.0% Captives 48 1.3% Other Not Rated Companies [3] 449 12.0% --------------------------------------------------------------------------------------------------------------- Total $ 3,737 100.0% - -------------------------------------------------------------------------------------------------------------------- [1] Net of commutations, settlements and known insolvencies. [2] Based on A.M. Best ratings as of 12/31/02. [3] No single company is greater than 1% of total.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY CONSOLIDATED INCOME STATEMENTS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------- ----------- ----------- ----------- Earned premiums $ 1,877 $ 1,976 $ 2,107 $ 2,154 Net investment income 254 271 262 288 Other revenues 81 88 88 99 Net realized capital gains (losses) 8 (46) (42) (3) - ---------------------------------------------------------------------------------------------------------- TOTAL REVENUES 2,220 2,289 2,415 2,538 Benefits, claims and claim adjustment expenses [1] 1,358 1,452 1,505 1,555 Amortization of deferred policy acquisition costs 403 402 405 403 Insurance operating costs and expenses 177 202 232 268 Other expenses 126 134 152 147 - ---------------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 2,064 2,190 2,294 2,373 INCOME (LOSS) BEFORE INCOME TAXES 156 99 121 165 Income tax expense (benefit) 28 9 11 24 - ---------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) [2] 128 90 110 141 Less: Net realized capital losses, after-tax 6 (30) (29) (1) - ---------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) [2] $ 122 $ 120 $ 139 $ 142 P&C effective tax rate - net income (loss) 18.1% 9.1% 7.6% 15.0% P&C effective tax rate - operating income (loss) 17.2% 17.2% 15.1% 15.1% - ---------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ----------- ------------ ----------- Earned premiums $ 2,166 15% 1% Net investment income 285 12% (1%) Other revenues 95 17% (4%) Net realized capital gains (losses) (5) NM (67%) - ------------------------------------------------------------------------------------------------- TOTAL REVENUES 2,541 14% - Benefits, claims and claim adjustment expenses [1] 4,161 NM 168% Amortization of deferred policy acquisition costs 401 - - Insurance operating costs and expenses 216 22% (19%) Other expenses 132 5% (10%) - ------------------------------------------------------------------------------------------------- TOTAL BENEFITS AND EXPENSES 4,910 138% 107% INCOME (LOSS) BEFORE INCOME TAXES (2,369) NM NM Income tax expense (benefit) (856) NM NM - ------------------------------------------------------------------------------------------------- NET INCOME (LOSS) [2] (1,513) NM NM Less: Net realized capital losses, after-tax (3) NM NM - ------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) [2] $(1,510) NM NM P&C effective tax rate - net income (loss) NM NM NM P&C effective tax rate - operating income (loss) NM NM NM - ------------------------------------------------------------------------------------------------- [1] 2003 includes before-tax impact of 2003 asbestos reserve addition of $2,604. [2] 2003 includes after-tax impact of 2003 asbestos reserve addition of $1,701.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY CONSOLIDATED BALANCE SHEETS 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ----------- ----------- ----------- ----------- Investments Fixed maturities, available for sale, at fair value $16,786 $17,433 $18,899 $19,446 Equity securities, available for sale, at fair value 897 738 611 459 Other investments 770 763 692 668 - --------------------------------------------------------------------------------------------------------------------- Total investments 18,453 18,934 20,202 20,573 Cash and cash equivalents 209 201 219 198 Premiums receivable and agents' balances 2,636 2,751 2,715 2,403 Reinsurance recoverables 4,469 4,461 4,345 4,231 Deferred policy acquisition costs and present value of future profits 887 920 948 930 Deferred income tax 739 655 622 610 Goodwill 154 154 154 153 Other assets 1,833 1,859 1,770 2,031 - --------------------------------------------------------------------------------------------------------------------- TOTAL ASSETS $29,380 $29,935 $30,975 $31,129 - --------------------------------------------------------------------------------------------------------------------- Future policy benefits, unpaid claims and claim adjustment expenses $17,039 $17,064 $17,067 $17,091 Unearned premiums 3,600 3,792 3,925 3,942 Debt 1,014 1,014 1,164 1,164 Trust preferred securities 981 984 1,016 1,023 Other liabilities 2,637 2,729 2,993 2,939 - --------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 25,271 25,583 26,165 26,159 - --------------------------------------------------------------------------------------------------------------------- Equity x-AOCI, net of tax 3,884 3,961 4,172 4,262 AOCI, net of tax 225 391 638 708 - --------------------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 4,109 4,352 4,810 4,970 - --------------------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $29,380 $29,935 $30,975 $31,129 - --------------------------------------------------------------------------------------------------------------------- Hartford Fire NAIC RBC 390% YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER 2003 CHANGE CHANGE ----------- ------------- ------------ Investments Fixed maturities, available for sale, at fair value $20,384 21% 5% Equity securities, available for sale, at fair value 209 (77%) (54%) Other investments 636 (17%) (5%) - ---------------------------------------------------------------------------------------------------------- Total investments 21,229 15% 3% Cash and cash equivalents 366 75% 85% Premiums receivable and agents' balances 2,521 (4%) 5% Reinsurance recoverables 5,635 26% 33% Deferred policy acquisition costs and present value of future profits 994 12% 7% Deferred income tax 1,408 91% 131% Goodwill 153 (1%) - Other assets 2,167 18% 7% - ---------------------------------------------------------------------------------------------------------- TOTAL ASSETS $34,473 17% 11% - ---------------------------------------------------------------------------------------------------------- Future policy benefits, unpaid claims and claim adjustment expenses $21,212 24% 24% Unearned premiums 4,246 18% 8% Debt 1,164 15% - Trust preferred securities 1,024 4% - Other liabilities 3,383 28% 15% - ---------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 31,029 23% 19% - ---------------------------------------------------------------------------------------------------------- Equity x-AOCI, net of tax 2,663 (31%) (38%) AOCI, net of tax 781 NM 10% - ---------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDERS' EQUITY 3,444 (16%) (31%) - ---------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $34,473 17% 11% - ----------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. CONSOLIDATED GENERAL ACCOUNT INVESTMENT EARNINGS BEFORE-TAX 1Q 2Q 3Q 4Q Net Investment Income 2002 2002 2002 2002 ------------ ------------- ------------- ------------ Fixed maturities [1] Taxable $ 460 $ 482 $ 513 $ 532 Tax-exempt 129 130 132 132 - -------------------------------------------------------------------------------------------------- Total fixed maturities 589 612 645 664 Equities 10 9 8 9 Mortgage loans 8 6 7 10 Real estate - 1 1 - Policy loans 67 68 61 58 Other 43 40 17 63 - -------------------------------------------------------------------------------------------------- Subtotal 717 736 739 804 Less investment expense 11 10 10 12 - -------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME $ 706 $ 726 $ 729 $ 792 - -------------------------------------------------------------------------------------------------- AVERAGE PRE-TAX YIELD 6.1% AVERAGE AFTER-TAX YIELD 4.3% NET REALIZED CAPITAL GAIN/LOSS Fixed Maturities $ (26) $ (181) $ (143) $ (27) Equities 21 - (18) (45) Mortgage loans - - - - Real estate - - 3 (1) Policy loans - - - - Other, net (2) 15 (2) 6 - -------------------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ (7) $(166) $(160) $ (67) - -------------------------------------------------------------------------------------------------- Gross gains on sale Gross losses on sale Other net gain/(loss)[2] Impairments $ (42) $ (236) $ (175) $ (126) - -------------------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) - -------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER Net Investment Income 2003 CHANGE CHANGE ------------- -------------- -------------- Fixed maturities [1] Taxable $ 538 17% 1% Tax-exempt 133 3% 1% - ---------------------------------------------------------------------------------------- Total fixed maturities 671 14% 1% Equities 8 (20%) (11%) Mortgage loans 9 13% (10%) Real estate 1 NM NM Policy loans 58 (13%) - Other 60 40% (5%) - ---------------------------------------------------------------------------------------- Subtotal 807 13% - Less investment expense 11 - 8% - ---------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME $ 796 13% 1% - ---------------------------------------------------------------------------------------- AVERAGE PRE-TAX YIELD 6.0% AVERAGE AFTER-TAX YIELD 4.2% NET REALIZED CAPITAL GAIN/LOSS Fixed Maturities $ (9) 65% 67% Equities (49) NM (9%) Mortgage loans - - - Real estate - - 100% Policy loans - - - Other, net 5 NM (17%) - ---------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ (53) NM 21% - ---------------------------------------------------------------------------------------- Gross gains on sale $ 137 Gross losses on sale (107) Other net gain/(loss)[2] 6 Impairments (89) (112%) 29% - ---------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ (53) - ---------------------------------------------------------------------------------------- [1] Includes income on short-term bonds. [2] Primarily consists of changes in fair value and hedge ineffectiveness on derivative instruments.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE GENERAL ACCOUNT INVESTMENT EARNINGS BEFORE-TAX 1Q 2Q 3Q 4Q Net Investment Income 2002 2002 2002 2002 ------------- ------------ ------------- ------------- Fixed maturities [1] Taxable $ 324 $ 338 $ 362 $ 370 Tax-exempt 21 21 24 25 - ------------------------------------------------------------------------------------------------- Total fixed maturities 345 359 386 395 Equities 6 4 4 5 Mortgage loans 6 5 5 6 Real estate - - - - Policy loans 67 68 61 58 Other 29 19 11 40 - ------------------------------------------------------------------------------------------------- Subtotal 453 455 467 504 Less investment expense 5 5 5 6 - ------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME $ 448 $ 450 $ 462 $ 498 - ------------------------------------------------------------------------------------------------- AVERAGE PRE-TAX YIELD 6.3% AVERAGE AFTER-TAX YIELD 4.2% NET REALIZED CAPITAL GAIN/LOSS Fixed Maturities $ (9) $ (124) $ (93) $ (69) Equities (3) 1 (17) (3) Mortgage loans - - - - Real estate - - - - Policy loans - - - - Other, net (3) 3 (8) 8 - ------------------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ (15) $(120) $(118) $ (64) - ------------------------------------------------------------------------------------------------- Gross gains on sale Gross losses on sale Other net gain/(loss)[2] Impairments $ (15) $ (144) $ (132) $ (89) - ------------------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) - ------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER Net Investment Income 2003 CHANGE CHANGE ------------ --------------- ------------- Fixed maturities [1] Taxable $ 379 17% 2% Tax-exempt 25 19% - - --------------------------------------------------------------------------------------- Total fixed maturities 404 17% 2% Equities 5 (17%) - Mortgage loans 5 (17%) (17%) Real estate - - - Policy loans 58 (13%) - Other 41 41% 3% - --------------------------------------------------------------------------------------- Subtotal 513 13% 2% Less investment expense 6 (20%) - - --------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME $ 507 13% 2% - --------------------------------------------------------------------------------------- AVERAGE PRE-TAX YIELD 6.1% AVERAGE AFTER-TAX YIELD 4.1% NET REALIZED CAPITAL GAIN/LOSS Fixed Maturities $ (31) NM 55% Equities (26) NM NM Mortgage loans - - - Real estate - - - Policy loans - - - Other, net 9 NM 13% - --------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ (48) NM 25% - --------------------------------------------------------------------------------------- Gross gains on sale $ 57 Gross losses on sale (47) Other net gain/(loss)[2] 9 Impairments (67) NM 25% - --------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ (48) - --------------------------------------------------------------------------------------- [1] Includes income on short-term bonds. [2] Primarily consists of changes in fair value and hedge ineffectiveness on derivative instruments.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY GENERAL ACCOUNT INVESTMENT EARNINGS BEFORE-TAX 1Q 2Q 3Q 4Q NET INVESTMENT INCOME 2002 2002 2002 2002 ------------ ------------- ------------ ------------ Fixed maturities [1] Taxable $ 136 $ 144 $ 150 $ 161 Tax-exempt 108 109 108 107 - ----------------------------------------------------------------------------------------------------------------------- Total fixed maturities 244 253 258 268 Equities 4 5 4 4 Mortgage loans 2 1 2 4 Real estate - 1 1 - Policy loans - - - - Other 10 16 2 18 - ----------------------------------------------------------------------------------------------------------------------- Subtotal 260 276 267 294 Less investment expense 6 5 5 6 - ----------------------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME $ 254 $ 271 $ 262 $ 288 - ----------------------------------------------------------------------------------------------------------------------- AVERAGE PRE-TAX YIELD 5.7% AVERAGE AFTER-TAX YIELD 4.5% NET REALIZED CAPITAL GAIN/LOSS Fixed Maturities $ (17) $ (57) $ (50) $ 42 Equities 24 (1) (1) (42) Mortgage loans - - - - Real estate - - 3 (1) Policy loans - - - - Other, net 1 12 6 (2) - ----------------------------------------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ 8 $ (46) $ (42) $ (3) - ----------------------------------------------------------------------------------------------------------------------- Gross gains on sale Gross losses on sale Other net gain/(loss)[2] Impairments $ (27) $ (92) $ (43) $ (37) - ----------------------------------------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) - ----------------------------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL 1Q QUARTER QUARTER NET INVESTMENT INCOME 2003 CHANGE CHANGE ------------- -------------- -------------- Fixed maturities [1] Taxable $ 159 17% (1%) Tax-exempt 108 - 1% - ------------------------------------------------------------------------------------------------------------- Total fixed maturities 267 9% - Equities 3 (25%) (25%) Mortgage loans 4 100% - Real estate 1 NM NM Policy loans - - - Other 15 50% (17%) - ------------------------------------------------------------------------------------------------------------- Subtotal 290 12% (1%) Less investment expense 5 17% 17% - ------------------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME $ 285 12% (1%) - ------------------------------------------------------------------------------------------------------------- AVERAGE PRE-TAX YIELD 5.8% AVERAGE AFTER-TAX YIELD 4.5% NET REALIZED CAPITAL GAIN/LOSS Fixed Maturities $ 22 NM (48%) Equities (23) NM 45% Mortgage loans - - - Real estate - - 100% Policy loans - - - Other, net (4) NM (100%) - ------------------------------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ (5) NM (67%) - ------------------------------------------------------------------------------------------------------------- Gross gains on sale $ 80 Gross losses on sale (60) Other net gain/(loss)[2] (3) Impairments (22) 19% 41% - ------------------------------------------------------------------------------------------------------------- TOTAL NET REALIZED CAPITAL GAIN/(LOSS) $ (5) - ------------------------------------------------------------------------------------------------------------- [1] Includes income on short-term bonds. [2] Primarily consists of changes in fair value and hedge ineffectiveness on derivative instruments.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. CORPORATE GENERAL ACCOUNT INVESTMENT EARNINGS BEFORE-TAX NET INVESTMENT INCOME 1Q 2Q 3Q 4Q 2002 2002 2002 2002 ------------- ------------- ------------- ------------- Fixed maturities [1] Taxable $ - $ - $ 1 $ 1 - --------------------------------------------------------------------------------------------------- Total fixed maturities - - 1 1 Other 4 5 4 5 - --------------------------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME $ 4 $ 5 $ 5 $ 6 - --------------------------------------------------------------------------------------------------- YEAR OVER YEAR SEQUENTIAL Net Investment Income 1Q QUARTER QUARTER 2003 CHANGE CHANGE -------------- -------------- ------------- Fixed maturities [1] Taxable $ - - (100%) - ----------------------------------------------------------------------------------- Total fixed maturities - - (100%) Other 4 - (20%) - ----------------------------------------------------------------------------------- TOTAL NET INVESTMENT INCOME $ 4 - (33%) - ----------------------------------------------------------------------------------- [1] Includes income on short-term bonds.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. CONSOLIDATED GENERAL AND GUARANTEED SEPARATE ACCOUNT COMPOSITION OF INVESTED ASSETS 1Q 2Q 3Q 2002 2002 2002 --------------------------- --------------------------- --------------------------- AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT Fixed maturities, at fair value [1] [2] $ 50,599 88.0% $ 53,680 89.0% $ 59,187 90.2% Equity securities, at fair value 1,356 2.4% 1,200 2.0% 1,031 1.6% Policy loans, at outstanding balance 3,288 5.7% 3,204 5.3% 2,980 4.5% Real estate/Mortgage loans, at cost 483 0.8% 508 0.8% 554 0.8% Other investments 1,806 3.1% 1,748 2.9% 1,878 2.9% - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS $ 57,532 100.0% $ 60,340 100.0% $ 65,630 100.0% - ------------------------------------------------------------------------------------------------------------------------------------ Total general account investments 47,059 81.8% 49,332 81.8% 54,101 82.4% Total guaranteed separate account investments 10,473 18.2% 11,008 18.2% 11,529 17.6% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ HIMCO managed third party accounts $ 642 $ 931 $ 1,139 - ------------------------------------------------------------------------------------------------------------------------------------ Corporate $ 22,018 43.6% $ 23,182 43.2% $ 24,791 41.9% CMO [1] 949 2.0% 983 1.8% 1,138 1.9% Municipal - tax-exempt 10,089 19.9% 10,502 19.6% 10,952 18.5% Gov't/Gov't agencies - U.S. 677 1.3% 842 1.6% 659 1.1% ABS 5,431 10.7% 5,723 10.7% 5,937 10.0% Gov't/Gov't agencies - Foreign 1,277 2.5% 1,354 2.5% 1,664 2.8% MBS - agency 1,873 3.7% 2,337 4.3% 2,825 4.8% Commercial MBS 5,819 11.5% 6,291 11.7% 7,465 12.6% Municipal - taxable 169 0.3% 163 0.3% 167 0.3% Redeemable preferred stock 155 0.3% 102 0.2% 103 0.2% Short-term [2] 2,142 4.2% 2,201 4.1% 3,486 5.9% - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL FIXED MATURITIES $ 50,599 100.0% $ 53,680 100.0% $ 59,187 100.0% - ------------------------------------------------------------------------------------------------------------------------------------ Total general account fixed maturities 40,346 79.7% 42,984 80.1% 48,085 81.2% Total guaranteed separate account fixed maturities 10,253 20.3% 10,696 19.9% 11,102 18.8% - ------------------------------------------------------------------------------------------------------------------------------------ AAA $ 11,241 22.2% $ 12,325 23.0% $ 13,962 23.6% AA 6,875 13.6% 7,120 13.3% 7,628 12.9% A 14,575 28.8% 14,677 27.3% 15,519 26.2% BBB 10,266 20.3% 10,861 20.2% 11,493 19.4% Government [1] 3,214 6.4% 3,897 7.3% 4,398 7.4% BB & below 2,286 4.5% 2,599 4.8% 2,701 4.6% Short-term [2] 2,142 4.2% 2,201 4.1% 3,486 5.9% - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL FIXED MATURITIES $ 50,599 100.0% $ 53,680 100.0% $ 59,187 100.0% - ------------------------------------------------------------------------------------------------------------------------------------ 4Q 1Q 2002 2003 --------------------------- -------------------------- AMOUNT PERCENT AMOUNT PERCENT Fixed maturities, at fair value [1] [2] $ 59,974 90.9% $ 63,363 91.9% Equity securities, at fair value 962 1.4% 661 1.0% Policy loans, at outstanding balance 2,934 4.4% 2,876 4.2% Real estate/Mortgage loans, at cost 578 0.9% 636 0.9% Other investments 1,552 2.4% 1,376 2.0% - --------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS $ 66,000 100.0% $ 68,912 100.0% - --------------------------------------------------------------------------------------------------------- Total general account investments 54,530 82.6% 57,328 83.2% Total guaranteed separate account investment 11,470 17.4% 11,584 16.8% - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- HIMCO managed third party accounts $ 1,312 $ 1,521 - --------------------------------------------------------------------------------------------------------- Corporate $ 26,534 44.2% $ 28,298 44.7% CMO [1] 952 1.6% 1,079 1.7% Municipal - tax-exempt 10,846 18.1% 10,814 17.1% Gov't/Gov't agencies - U.S. 817 1.4% 910 1.4% ABS 6,091 10.1% 5,985 9.4% Gov't/Gov't agencies - Foreign 1,934 3.2% 2,049 3.2% MBS - agency 2,818 4.7% 2,426 3.8% Commercial MBS 7,561 12.6% 8,469 13.4% Municipal - taxable 166 0.3% 164 0.3% Redeemable preferred stock 102 0.2% 103 0.2% Short-term [2] 2,153 3.6% 3,066 4.8% - --------------------------------------------------------------------------------------------------------- TOTAL FIXED MATURITIES $ 59,974 100.0% $ 63,363 100.0% - --------------------------------------------------------------------------------------------------------- Total general account fixed maturities 48,889 81.5% 52,126 82.3% Total guaranteed separate account fixed maturities 11,085 18.5% 11,237 17.7% - --------------------------------------------------------------------------------------------------------- AAA $ 14,358 24.0% $ 14,999 23.7% AA 7,784 13.0% 7,778 12.3% A 16,034 26.7% 16,690 26.3% BBB 12,121 20.2% 13,306 21.0% Government [1] 4,397 7.3% 4,260 6.7% BB & below 3,127 5.2% 3,264 5.2% Short-term [2] 2,153 3.6% 3,066 4.8% - --------------------------------------------------------------------------------------------------------- TOTAL FIXED MATURITIES $ 59,974 100.0% $ 63,363 100.0% - --------------------------------------------------------------------------------------------------------- [1] March 31, 2002 and June 30, 2002 include $2 reflected in Corporate. [2] September 30, 2002 includes $647 reflected in Corporate. December 31, 2002 and March 31, 2003 include $66 reflected in Corporate.
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE GENERAL AND GUARANTEED SEPARATE ACCOUNT COMPOSITION OF INVESTED ASSETS 1Q 2Q 3Q 2002 2002 2002 --------------------------- --------------------------- --------------------------- AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT Fixed maturities, at fair value $ 33,811 86.6% $ 36,245 87.6% $ 39,641 88.5% Equity securities, at fair value 459 1.2% 462 1.1% 420 0.9% Policy loans, at outstanding balance 3,288 8.4% 3,204 7.7% 2,980 6.7% Real estate/Mortgage loans, at cost 407 1.0% 422 1.0% 441 1.0% Other investments 1,112 2.8% 1,071 2.6% 1,299 2.9% - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS $ 39,077 100.0% $ 41,404 100.0% $ 44,781 100.0% - ------------------------------------------------------------------------------------------------------------------------------------ Total general account investments 28,604 73.2% 30,396 73.4% 33,252 74.3% Total guaranteed separate account investments 10,473 26.8% 11,008 26.6% 11,529 25.7% - ------------------------------------------------------------------------------------------------------------------------------------ Corporate $ 17,732 52.3% $ 18,649 51.4% $ 19,978 50.4% CMO 865 2.6% 846 2.3% 1,040 2.6% Municipal - tax-exempt 1,645 4.9% 1,843 5.1% 2,021 5.1% Gov't/Gov't agencies - U.S. 606 1.8% 772 2.1% 593 1.5% ABS 4,731 14.0% 5,023 13.9% 5,200 13.1% Gov't/Gov't agencies - Foreign 653 1.9% 681 1.9% 830 2.1% MBS - agency 1,573 4.7% 1,842 5.1% 2,236 5.6% Commercial MBS 4,696 13.9% 4,960 13.7% 5,828 14.7% Municipal - taxable 122 0.4% 113 0.3% 115 0.3% Redeemable preferred stock 57 0.2% 33 0.1% 34 0.1% Short-term 1,131 3.3% 1,483 4.1% 1,766 4.5% - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL FIXED MATURITIES $ 33,811 100.0% $ 36,245 100.0% $ 39,641 100.0% - ------------------------------------------------------------------------------------------------------------------------------------ Total general account fixed maturities 23,558 69.7% 25,549 70.5% 28,539 72.0% Total guaranteed separate account fixed maturities 10,253 30.3% 10,696 29.5% 11,102 28.0% - ------------------------------------------------------------------------------------------------------------------------------------ AAA $ 5,053 15.0% $ 5,664 15.6% $ 6,736 17.0% AA 3,729 11.0% 3,949 10.9% 4,196 10.6% A 11,497 34.0% 11,589 32.0% 12,262 30.9% BBB 8,255 24.4% 8,693 24.0% 9,205 23.2% Government 2,790 8.3% 3,247 8.9% 3,685 9.3% BB & below 1,356 4.0% 1,620 4.5% 1,791 4.5% Short-term 1,131 3.3% 1,483 4.1% 1,766 4.5% - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL FIXED MATURITIES $ 33,811 100.0% $ 36,245 100.0% $ 39,641 100.0% - ------------------------------------------------------------------------------------------------------------------------------------ 4Q 1Q 2002 2003 --------------------------- -------------------------- AMOUNT PERCENT AMOUNT PERCENT Fixed maturities, at fair value $ 40,462 89.2% $ 42,913 90.1% Equity securities, at fair value 503 1.1% 452 1.0% Policy loans, at outstanding balance 2,934 6.5% 2,876 6.0% Real estate/Mortgage loans, at cost 447 1.0% 486 1.0% Other investments 1,015 2.2% 890 1.9% - --------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS $ 45,361 100.0% $ 47,617 100.0% - --------------------------------------------------------------------------------------------------------- Total general account investments 33,891 74.7% 36,033 75.7% Total guaranteed separate account investment 11,470 25.3% 11,584 24.3% - --------------------------------------------------------------------------------------------------------- Corporate $ 21,075 52.1% $ 22,452 52.3% CMO 903 2.2% 1,024 2.4% Municipal - tax-exempt 2,000 4.9% 2,004 4.7% Gov't/Gov't agencies - U.S. 693 1.7% 733 1.7% ABS 5,360 13.3% 5,297 12.3% Gov't/Gov't agencies - Foreign 846 2.1% 881 2.0% MBS - agency 2,296 5.7% 1,955 4.6% Commercial MBS 5,988 14.8% 6,923 16.1% Municipal - taxable 114 0.3% 110 0.3% Redeemable preferred stock 34 0.1% 34 0.1% Short-term 1,153 2.8% 1,500 3.5% - --------------------------------------------------------------------------------------------------------- TOTAL FIXED MATURITIES $ 40,462 100.0% $ 42,913 100.0% - --------------------------------------------------------------------------------------------------------- Total general account fixed maturities 29,377 72.6% 31,676 73.8% Total guaranteed separate account fixed maturities 11,085 27.4% 11,237 26.2% - --------------------------------------------------------------------------------------------------------- AAA $ 6,960 17.2% $ 7,475 17.4% AA 4,396 10.9% 4,487 10.5% A 12,467 30.8% 13,069 30.5% BBB 9,665 23.9% 10,608 24.7% Government 3,737 9.2% 3,582 8.3% BB & below 2,084 5.2% 2,192 5.1% Short-term 1,153 2.8% 1,500 3.5% - --------------------------------------------------------------------------------------------------------- TOTAL FIXED MATURITIES $ 40,462 100.0% $ 42,913 100.0% - ---------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY & CASUALTY GENERAL ACCOUNT COMPOSITION OF INVESTED ASSETS 1Q 2Q 3Q 2002 2002 2002 ------------------------- -------------------------- -------------------------- AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT Fixed maturities, at fair value $ 16,786 91.0% $ 17,433 92.1% $ 18,899 93.5% Equity securities, at fair value 897 4.9% 738 3.9% 611 3.0% Policy loans, at outstanding balance - - - - - - Real estate/Mortgage loans, at cost 76 0.4% 86 0.4% 113 0.6% Other investments 694 3.7% 677 3.6% 579 2.9% - -------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS $ 18,453 100.0% $ 18,934 100.0% $ 20,202 100.0% - -------------------------------------------------------------------------------------------------------------------------- Corporate $ 4,286 25.5% $ 4,533 26.0% $ 4,813 25.5% CMO 82 0.5% 135 0.8% 98 0.5% Municipal - tax-exempt 8,444 50.3% 8,659 49.7% 8,931 47.2% Gov't/Gov't agencies - U.S. 71 0.4% 70 0.4% 66 0.3% ABS 700 4.2% 700 4.0% 737 3.9% Gov't/Gov't agencies - Foreign 624 3.7% 673 3.9% 834 4.4% MBS - agency 300 1.8% 495 2.8% 589 3.1% Commercial MBS 1,123 6.7% 1,331 7.6% 1,637 8.7% Municipal - taxable 47 0.3% 50 0.3% 52 0.3% Redeemable preferred stock 98 0.6% 69 0.4% 69 0.4% Short-term 1,011 6.0% 718 4.1% 1,073 5.7% - -------------------------------------------------------------------------------------------------------------------------- TOTAL FIXED MATURITIES $ 16,786 100.0% $ 17,433 100.0% $ 18,899 100.0% - -------------------------------------------------------------------------------------------------------------------------- AAA $ 6,188 36.9% $ 6,661 38.2% $ 7,226 38.2% AA 3,146 18.7% 3,171 18.2% 3,432 18.2% A 3,078 18.3% 3,088 17.7% 3,257 17.2% BBB 2,011 12.0% 2,168 12.5% 2,288 12.1% Government 422 2.5% 648 3.7% 713 3.8% BB & below 930 5.6% 979 5.6% 910 4.8% Short-term 1,011 6.0% 718 4.1% 1,073 5.7% - -------------------------------------------------------------------------------------------------------------------------- TOTAL FIXED MATURITIES $ 16,786 100.0% $ 17,433 100.0% $ 18,899 100.0% - -------------------------------------------------------------------------------------------------------------------------- 4Q 1Q 2002 2003 -------------------------- -------------------------- AMOUNT PERCENT AMOUNT PERCENT Fixed maturities, at fair value $ 19,446 94.5% $ 20,384 96.0% Equity securities, at fair value 459 2.2% 209 1.0% Policy loans, at outstanding balance - - - - Real estate/Mortgage loans, at cost 131 0.7% 150 0.7% Other investments 537 2.6% 486 2.3% - ------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS $ 20,573 100.0% $ 21,229 100.0% - ------------------------------------------------------------------------------------------------- Corporate $ 5,459 28.0% $ 5,846 28.6% CMO 49 0.3% 55 0.3% Municipal - tax-exempt 8,846 45.5% 8,810 43.2% Gov't/Gov't agencies - U.S. 124 0.6% 177 0.9% ABS 731 3.8% 688 3.4% Gov't/Gov't agencies - Foreign 1,088 5.6% 1,168 5.7% MBS - agency 522 2.7% 471 2.3% Commercial MBS 1,573 8.1% 1,546 7.6% Municipal - taxable 52 0.3% 54 0.3% Redeemable preferred stock 68 0.3% 69 0.3% Short-term 934 4.8% 1,500 7.4% - ------------------------------------------------------------------------------------------------- TOTAL FIXED MATURITIES $ 19,446 100.0% $ 20,384 100.0% - ------------------------------------------------------------------------------------------------- AAA $ 7,398 38.1% $ 7,524 36.9% AA 3,388 17.4% 3,291 16.1% A 3,567 18.3% 3,621 17.8% BBB 2,456 12.6% 2,698 13.2% Government 660 3.4% 678 3.3% BB & below 1,043 5.4% 1,072 5.3% Short-term 934 4.8% 1,500 7.4% - ------------------------------------------------------------------------------------------------- TOTAL FIXED MATURITIES $ 19,446 100.0% $ 20,384 100.0% - -------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. CONSOLIDATED GENERAL AND GUARANTEED SEPARATE ACCOUNT UNREALIZED LOSS AGING AS OF MARCH 31, 2003 TOTAL SECURITIES ---------------------------------------------------- AMORTIZED UNREALIZED COST FAIR VALUE LOSS - ------------------------------------------------------------------------------------------------------------ Three months or less $ 2,679 $ 2,608 $ (71) Greater than three months to six months 1,002 945 (57) Greater than six months to nine months 790 740 (50) Greater than nine months to twelve months 300 278 (22) Greater than twelve months 3,419 3,134 (285) - ------------------------------------------------------------------------------------------------------------ TOTAL $ 8,190 $ 7,705 $ (485) - ------------------------------------------------------------------------------------------------------------ AS OF DECEMBER 31, 2002 TOTAL SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - ------------------------------------------------------------------------------------------------------------ Three months or less $ 2,042 $ 1,949 $ (93) Greater than three months to six months 1,542 1,463 (79) Greater than six months to nine months 703 611 (92) Greater than nine months to twelve months 1,820 1,719 (101) Greater than twelve months 2,351 2,103 (248) - ------------------------------------------------------------------------------------------------------------ TOTAL $ 8,458 $ 7,845 $ (613) - ------------------------------------------------------------------------------------------------------------ AS OF MARCH 31, 2003 BIG AND EQUITY SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - -------------------------------------------------------------------------------------------------------------- Three months or less $ 237 $ 215 $ (22) Greater than three months to six months 58 46 (12) Greater than six months to nine months 131 112 (19) Greater than nine months to twelve months 152 134 (18) Greater than twelve months 785 685 (100) - -------------------------------------------------------------------------------------------------------------- TOTAL $ 1,363 $ 1,192 $ (171) - -------------------------------------------------------------------------------------------------------------- AS OF DECEMBER 31, 2002 BIG AND EQUITY SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - -------------------------------------------------------------------------------------------------------------- Three months or less $ 274 $ 229 $ (45) Greater than three months to six months 308 267 (41) Greater than six months to nine months 266 213 (53) Greater than nine months to twelve months 576 515 (61) Greater than twelve months 610 517 (93) - -------------------------------------------------------------------------------------------------------------- TOTAL $ 2,034 $ 1,741 $ (293) - --------------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. LIFE GENERAL AND GUARANTEED SEPARATE ACCOUNT UNREALIZED LOSS AGING AS OF MARCH 31, 2003 TOTAL SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - ---------------------------------------------------------------------------------------------------------- Three months or less $ 2,117 $ 2,063 $ (54) Greater than three months to six months 774 725 (49) Greater than six months to nine months 706 665 (41) Greater than nine months to twelve months 230 213 (17) Greater than twelve months 2,728 2,483 (245) - ---------------------------------------------------------------------------------------------------------- TOTAL $ 6,555 $ 6,149 $ (406) - ---------------------------------------------------------------------------------------------------------- AS OF DECEMBER 31, 2002 TOTAL SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - ---------------------------------------------------------------------------------------------------------- Three months or less $ 1,532 $ 1,459 $ (73) Greater than three months to six months 1,294 1,239 (55) Greater than six months to nine months 568 508 (60) Greater than nine months to twelve months 1,334 1,264 (70) Greater than twelve months 2,135 1,927 (208) - ---------------------------------------------------------------------------------------------------------- TOTAL $ 6,863 $ 6,397 $ (466) - ---------------------------------------------------------------------------------------------------------- AS OF MARCH 31, 2003 BIG AND EQUITY SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - ---------------------------------------------------------------------------------------------------------- Three months or less $ 141 $ 126 $ (15) Greater than three months to six months 48 37 (11) Greater than six months to nine months 106 91 (15) Greater than nine months to twelve months 86 73 (13) Greater than twelve months 603 519 (84) - ---------------------------------------------------------------------------------------------------------- TOTAL $ 984 $ 846 $ (138) - ---------------------------------------------------------------------------------------------------------- AS OF DECEMBER 31, 2002 BIG AND EQUITY SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - ---------------------------------------------------------------------------------------------------------- Three months or less $ 162 $ 130 $ (32) Greater than three months to six months 208 185 (23) Greater than six months to nine months 175 145 (30) Greater than nine months to twelve months 330 293 (37) Greater than twelve months 501 431 (70) - ---------------------------------------------------------------------------------------------------------- TOTAL $ 1,376 $ 1,184 $ (192) - ----------------------------------------------------------------------------------------------------------
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THE HARTFORD FINANCIAL SERVICES GROUP, INC. PROPERTY AND CASUALTY GENERAL ACCOUNT UNREALIZED LOSS AGING AS OF MARCH 31, 2003 TOTAL SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - -------------------------------------------------------------------------------------------------------- Three months or less $ 562 $ 545 $ (17) Greater than three months to six months 228 220 (8) Greater than six months to nine months 84 75 (9) Greater than nine months to twelve months 70 65 (5) Greater than twelve months 691 651 (40) - -------------------------------------------------------------------------------------------------------- TOTAL $ 1,635 $ 1,556 $ (79) - -------------------------------------------------------------------------------------------------------- AS OF DECEMBER 31, 2002 TOTAL SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - -------------------------------------------------------------------------------------------------------- Three months or less $ 510 $ 490 $ (20) Greater than three months to six months 248 224 (24) Greater than six months to nine months 135 103 (32) Greater than nine months to twelve months 486 455 (31) Greater than twelve months 216 176 (40) - -------------------------------------------------------------------------------------------------------- TOTAL $ 1,595 $ 1,448 $ (147) - -------------------------------------------------------------------------------------------------------- AS OF MARCH 31, 2003 BIG AND EQUITY SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - -------------------------------------------------------------------------------------------------------- Three months or less $ 96 $ 89 $ (7) Greater than three months to six months 10 9 (1) Greater than six months to nine months 25 21 (4) Greater than nine months to twelve months 66 61 (5) Greater than twelve months 182 166 (16) - -------------------------------------------------------------------------------------------------------- TOTAL $ 379 $ 346 $ (33) - -------------------------------------------------------------------------------------------------------- AS OF DECEMBER 31, 2002 BIG AND EQUITY SECURITIES ------------------------------------------------ AMORTIZED UNREALIZED COST FAIR VALUE LOSS - -------------------------------------------------------------------------------------------------------- Three months or less $ 112 $ 99 $ (13) Greater than three months to six months 100 82 (18) Greater than six months to nine months 91 68 (23) Greater than nine months to twelve months 246 222 (24) Greater than twelve months 109 86 (23) - -------------------------------------------------------------------------------------------------------- TOTAL $ 658 $ 557 $ (101) - --------------------------------------------------------------------------------------------------------
- 61 - THE HARTFORD FINANCIAL SERVICES GROUP, INC. GENERAL AND GUARANTEED SEPARATE ACCOUNT INVESTED ASSET EXPOSURES MARCH 31, 2003 CORPORATE EXPOSURES BY SECTOR LIFE --------------------- PERCENT OF TOTAL INVESTED FAIR VALUE ASSETS --------------------- Financial services $ 5,792 12.2% Technology and Communications 3,544 7.4% Consumer non cyclical 2,889 6.1% Basic industry 2,631 5.5% Utilities 1,966 4.1% Consumer cyclical 1,722 3.6% Energy 1,581 3.3% Capital goods 1,126 2.4% Transportation 691 1.5% Other 510 1.1% - ------------------------------------------------------------------ TOTAL $22,452 47.2% - ------------------------------------------------------------------ P&C --------------------- PERCENT OF TOTAL INVESTED FAIR VALUE ASSETS --------------------- Financial services $ 1,593 7.5% Technology and Communications 1,053 5.0% Consumer non cyclical 598 2.8% Basic industry 830 3.9% Utilities 569 2.7% Consumer cyclical 412 1.9% Energy 322 1.5% Capital goods 304 1.4% Transportation 105 0.5% Other 60 0.3% - ------------------------------------------------------------------ TOTAL $ 5,846 27.5% - ------------------------------------------------------------------ CONSOLIDATED --------------------- PERCENT OF TOTAL INVESTED FAIR VALUE ASSETS --------------------- Financial services $ 7,385 10.7% Technology and Communications 4,597 6.7% Consumer non cyclical 3,487 5.1% Basic industry 3,461 5.0% Utilities 2,535 3.7% Consumer cyclical 2,134 3.1% Energy 1,903 2.8% Capital goods 1,430 2.1% Transportation 796 1.1% Other 570 0.8% - ------------------------------------------------------------------ TOTAL $28,298 41.1% - ------------------------------------------------------------------ TOP TEN EXPOSURES BY ISSUER [1] LIFE --------------------- PERCENT OF TOTAL INVESTED FAIR VALUE ASSETS --------------------- American Express Credit Account Master $ 206 0.4% Capital One Master Trust 206 0.4% British Telecommunications PLC 183 0.4% DaimlerChrysler AG 182 0.4% ConocoPhillips 181 0.4% Discover Card Master Trust I 180 0.4% Comcast Corporation 179 0.4% Ford Motor Company 174 0.4% General Motors Corporation 165 0.3% Citibank Credit Card Issuance Trust 156 0.3% - ------------------------------------------------------------------ TOTAL $ 1,812 3.8% - ------------------------------------------------------------------ P&C --------------------- PERCENT OF TOTAL INVESTED FAIR VALUE ASSETS --------------------- State of California $ 223 1.0% Germany Bundes Obligation 182 0.8% New York City, NY 168 0.8% Illinois, State 149 0.7% United Kingdom, Sovereign 141 0.7% New Jersey Transportation Trust Fund, NJ 120 0.6% State of Massachusetts 109 0.5% UBS AG 104 0.5% France, Sovereign 100 0.5% New York City Transitional Finance Authority 98 0.5% - ------------------------------------------------------------------ TOTAL $ 1,394 6.6% - ------------------------------------------------------------------ CONSOLIDATED --------------------- PERCENT OF TOTAL INVESTED FAIR VALUE ASSETS --------------------- State of California $ 273 0.4% General Motors Corporation 258 0.4% Ford Motor Company 257 0.4% Capital One Master Trust 239 0.4% France Telecom 220 0.3% Comcast Corporation 219 0.3% DaimlerChrysler AG 218 0.3% ConocoPhillips 214 0.3% Germany Bundes Obligation 212 0.3% American Express Credit Account Master 209 0.3% - ------------------------------------------------------------------ TOTAL $ 2,319 3.4% - ------------------------------------------------------------------ [1] Excludes U.S government and government agency backed securities. - 62 - -----END PRIVACY-ENHANCED MESSAGE-----