Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)	Documents filed as a part of this report:

(1)	Consolidated Financial Statements. See Index to Consolidated Financial Statements and Schedules elsewhere herein.

(2)	Consolidated Financial Statement Schedules. See Index to Consolidated Financial Statement and Schedules elsewhere herein.

(3)	Exhibits. See Exhibit Index elsewhere herein.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

Description	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Statements of Operations — For the Years Ended December 31, 2019, 2018 and 2017	F-5
Consolidated Statements of Comprehensive Income (Loss) — For the Years Ended December 31, 2019, 2018 and 2017	F-6
Consolidated Balance Sheets — As of December 31, 2019 and 2018	F-7
Consolidated Statements of Changes in Stockholders’ Equity — For the Years Ended December 31, 2019, 2018 and 2017	F-8
Consolidated Statements of Cash Flows — For the Years Ended December 31, 2019, 2018 and 2017	F-9
Notes to Consolidated Financial Statements	F-10
Schedule I — Summary of Investments — Other Than Investments in Affiliates	S-1
Schedule II — Condensed Financial Information of The Hartford Financial Services Group, Inc.	S-2
Schedule III — Supplementary Insurance Information	S-5
Schedule IV — Reinsurance	S-7
Schedule V — Valuation and Qualifying Accounts	S-8
Schedule VI — Supplemental Information Concerning Property and Casualty Insurance Operations	S-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

The Hartford Financial Services Group, Inc.

Hartford, Connecticut

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Hartford Financial Services Group, Inc. and its subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex audit judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Unpaid Losses and Loss Adjustment Expenses - Refer to Notes 1 and 11 to the financial statements

Critical Audit Matter Description

For property and casualty and group life and disability insurance products, the Company establishes reserves for unpaid losses and loss adjustment expenses to provide for the estimated costs of paying claims under insurance policies written by the Company. These reserves include estimates for both claims that have been reported and claims that have been incurred but not reported, and include estimates of all losses and loss adjustment expenses associated with processing and settling these claims. This estimation process is based significantly on the assumption that past developments are an appropriate predictor of future events, and involves a variety of actuarial techniques that analyze experience, trends and other relevant factors.

Given the subjectivity of estimating the ultimate cost to settle the liabilities for reported and unreported claims due to uncertainties caused by various factors including frequency and severity of claims as well as changes in the legislative and regulatory environment, performing audit procedures to evaluate whether unpaid losses and loss adjustment expenses were appropriately recorded as of December 31, 2019, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the unpaid losses and loss adjustment expenses included the following, among others:

•	We tested the effectiveness of controls related to the unpaid losses and loss adjustment expenses, including controls over inputs, methods, and assumptions used in the Company's estimation processes.

•	We tested the underlying data that served as the basis for the Company’s analysis, including historical claims.

F-2

•	With the assistance of our actuarial specialists, we evaluated the methods and assumptions used by the Company to estimate the unpaid losses and loss adjustment expenses by:

•	Comparing the Company’s prior year assumptions of expected development of ultimate loss to actual losses incurred during the current year to identify potential management bias in the determination of the unpaid losses and loss adjustment expenses.

•	Assessing the reasonableness of the Company’s analysis, and for selected reserving lines, developing independent estimates of the unpaid losses and loss adjustment expenses and comparing such estimates to the Company’s estimates.

Navigators Group Acquisition Identifiable Intangible Assets - Refer to Note 2 of the financial statements

Critical Audit Matter Description

The Company completed the acquisition of Navigators Group for $2.1 billion on May 23, 2019. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including identifiable intangible assets of $580 million. The fair value determination of the identifiable intangible assets required the Company to make estimates and assumptions, including expected new business, premium retention rates, investment returns, claim costs, and expenses, related to future cash flows expected to be generated by the acquired business and the selection of an appropriate discount rate.

Given the fair value determination of identifiable intangible assets for the Navigators Group acquisition required management to make estimates and assumptions related to the forecasts of future cash flows and the selection of the discount rate, performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future cash flows and the selection of the discount rate for the identifiable intangible assets included the following, among others:

•	We tested the effectiveness of controls over the valuation of the identifiable intangible assets, including the Company’s controls over forecasts of future cash flows and selection of an appropriate discount rate.

•	We assessed the reasonableness of the Company’s forecasts of future cash flows by comparing the projections to historical results and certain peer companies.

•	With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:

•	Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation.

•	Developing a range of independent discount rates and comparing those to the discount rate selected by the Company.

•	We evaluated whether the estimated future cash flows were consistent with evidence obtained in other areas of the audit.

Investments in Fixed Maturities Classified as Available-for-Sale - Refer to Notes 5 and 6 to the financial statements

Critical Audit Matter Description

Investments in fixed maturities classified as available-for-sale are reported at fair value in the financial statements. The investments without readily determinable fair values were valued using significant unobservable inputs, such as credit spreads and interest rates beyond the observable curve, that involved considerable judgment by the Company.

Given the Company used models and unobservable inputs to estimate the fair value of investments in fixed maturities classified as available-for-sale, performing audit procedures to evaluate these inputs required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the models and unobservable inputs used by the Company to estimate the fair value of investments in fixed maturities classified as available-for-sale included the following, among others:

•	We tested the effectiveness of controls over the valuation of investments in fixed maturities classified as available-for-sale, including controls over inputs, methods, and assumptions used in the Company’s estimation processes.

•	On a sample basis, we tested the accuracy and completeness of the investments owned as of December 31, 2019, and the relevant

F-3

security attributes used in the determination of their fair values.

•

With the assistance of our fair value specialists, for a sample of investments, we tested the mathematical accuracy of the fair value calculation and developed independent estimates of the fair value and compared our estimates to the Company’s estimates. In addition to developing independent estimates, we obtained an understanding of the models and inputs used by the Company and assessed those models and inputs for reasonableness. Such assessment included comparing inputs to external sources or developing independent inputs.

/s/ DELOITTE & TOUCHE LLP

Hartford, Connecticut

February 21, 2020

We have served as the Company’s auditor since 2002.

F-4

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Statements of Operations

	For the years ended December 31,
(in millions, except for per share data)	2019			2018			2017
Revenues
Earned premiums	$	16,923		$	15,869		$	14,141
Fee income	1,301			1,313			1,168
Net investment income	1,951			1,780			1,603
Net realized capital gains (losses):
Total other-than-temporary impairment (“OTTI”) losses	(6		)	(7		)	(15		)
OTTI losses recognized in other comprehensive income	3			6			7
Net OTTI losses recognized in earnings	(3		)	(1		)	(8		)
Other net realized capital gains (losses)	398			(111		)	173
Total net realized capital gains (losses)	395			(112		)	165
Other revenues	170			105			85
Total revenues	20,740			18,955			17,162
Benefits, losses and expenses
Benefits, losses and loss adjustment expenses	11,472			11,165			10,174
Amortization of deferred policy acquisition costs ("DAC")	1,622			1,384			1,372
Insurance operating costs and other expenses	4,580			4,281			4,563
Loss on extinguishment of debt	90			6			—
Loss on reinsurance transaction	91			—			—
Interest expense	259			298			316
Amortization of other intangible assets	66			68			14
Total benefits, losses and expenses	18,180			17,202			16,439
Income from continuing operations before income taxes	2,560			1,753			723
Income tax expense	475			268			985
Income (loss) from continuing operations, net of tax	2,085			1,485			(262		)
Income (loss) from discontinued operations, net of tax	—			322			(2,869		)
Net income (loss)	2,085			$	1,807		$	(3,131	)
Preferred stock dividends	21			6			—
Net income (loss) available to common stockholders	$	2,064		$	1,801		$	(3,131	)
Income (loss) from continuing operations, net of tax, available to common stockholders per common share
Basic	$	5.72		$	4.13		$	(0.72	)
Diluted	$	5.66		$	4.06		$	(0.72	)
Net income (loss) available to common stockholders per common share
Basic	$	5.72		$	5.03		$	(8.61	)
Diluted	$	5.66		$	4.95		$	(8.61	)

See Notes to Consolidated Financial Statements.

F-5

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Statements of Comprehensive Income (Loss)

	For the years ended December 31,
(in millions)	2019			2018			2017
Net income (loss)	$	2,085		$	1,807		$	(3,131	)
Other comprehensive income (loss):
Changes in net unrealized gain on securities	1,660			(2,180		)	655
Changes in OTTI losses recognized in other comprehensive income ("OCI")	1			(1		)	—
Changes in net gain on cash flow hedging instruments	14			(25		)	(58		)
Changes in foreign currency translation adjustments	4			(8		)	28
Changes in pension and other postretirement plan adjustments	(48		)	(23		)	375
OCI, net of tax	1,631			(2,237		)	1,000
Comprehensive income (loss)	$	3,716		$	(430	)	$	(2,131	)

See Notes to Consolidated Financial Statements.

F-6

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Balance Sheets

	As of December 31,
(in millions, except for share and per share data)	2019			2018
Assets
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost of $40,078 and $35,603)	$	42,148		$	35,652
Fixed maturities, at fair value using the fair value option	11			22
Equity securities, at fair value	1,657			1,214
Mortgage loans (net of allowances for loan losses of $0 and $1)	4,215			3,704
Limited partnerships and other alternative investments	1,758			1,723
Other investments	320			192
Short-term investments	2,921			4,283
Total investments	53,030			46,790
Cash	185			112
Restricted Cash	77			9
Premiums receivable and agents’ balances, net	4,384			3,995
Reinsurance recoverables, net	5,527			4,357
Deferred policy acquisition costs	785			670
Deferred income taxes, net	299			1,248
Goodwill	1,913			1,290
Property and equipment, net	1,181			1,006
Other intangible assets, net	1,070			657
Other assets	2,366			2,173
Total assets	$	70,817		$	62,307
Liabilities
Unpaid losses and loss adjustment expenses	$	36,517		$	33,029
Reserve for future policy benefits	635			642
Other policyholder funds and benefits payable	755			767
Unearned premiums	6,635			5,282
Short-term debt	500			413
Long-term debt	4,348			4,265
Other liabilities	5,157			4,808
Total liabilities	54,547			49,206
Commitments and Contingencies (Note 14)
Stockholders’ Equity
Preferred stock, $0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at December 31, 2019 and December 31, 2018, aggregate liquidation preference of $345	334			334
Common stock, $0.01 par value — 1,500,000,000 shares authorized, 384,923,222 shares issued at December 31, 2019 and December 31, 2018	4			4
Additional paid-in capital	4,312			4,378
Retained earnings	12,685			11,055
Treasury stock, at cost — 25,352,977 and 25,772,238 shares	(1,117		)	(1,091		)
Accumulated other comprehensive income (loss), net of tax	52			(1,579		)
Total stockholders' equity	16,270			13,101
Total liabilities and stockholders’ equity	$	70,817		$	62,307

See Notes to Consolidated Financial Statements.

F-7

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Statements of Changes in Stockholders' Equity

	For the years ended December 31,
(in millions, except for share data)	2019			2018			2017
Preferred Stock
Preferred Stock, beginning of period	$	334		$	—		$	—
Issuance of preferred stock	—			334			—
Preferred Stock, end of period	334			334			—
Common Stock	4			4			4
Additional Paid-in Capital
Additional Paid-in Capital, beginning of period	4,378			4,379			5,247
Issuance of shares under incentive and stock compensation plans	(100		)	(110		)	(76		)
Stock-based compensation plans expense	114			123			104
Issuance of shares for warrant exercise	(80		)	(14		)	(67		)
Treasury stock retired	—			—			(829		)
Additional Paid-in Capital, end of period	4,312			4,378			4,379
Retained Earnings
Retained Earnings, beginning of period	11,055			9,642			13,114
Cumulative effect of accounting changes, net of tax	—			5			—
Adjusted balance beginning of period	11,055			9,647			13,114
Net income (loss)	2,085			1,807			(3,131		)
Dividends declared on preferred stock	(21		)	(6		)	—
Dividends declared on common stock	(434		)	(393		)	(341		)
Retained Earnings, end of period	12,685			11,055			9,642
Treasury Stock, at cost
Treasury Stock, at cost, beginning of period	(1,091		)	(1,194		)	(1,125		)
Treasury stock acquired	(200		)	—			(1,028		)
Treasury stock retired	—			—			829
Issuance of shares under incentive and stock compensation plans	135			132			100
Net shares acquired related to employee incentive and stock compensation plans	(41		)	(43		)	(37		)
Issuance of shares for warrant exercise	80			14			67
Treasury Stock, at cost, end of period	(1,117		)	(1,091		)	(1,194		)
Accumulated Other Comprehensive Income (Loss), net of tax
Accumulated Other Comprehensive Income (Loss), net of tax, beginning of period	(1,579		)	663			(337		)
Cumulative effect of accounting changes, net of tax	—			(5		)	—
Adjusted balance beginning of period	(1,579		)	658			(337		)
Total other comprehensive income (loss)	1,631			(2,237		)	1,000
Accumulated Other Comprehensive Income (Loss), net of tax, end of period	52			(1,579		)	663
Total Stockholders’ Equity	$	16,270		$	13,101		$	13,494
Preferred Shares Outstanding
Preferred Shares Outstanding, beginning of period	13,800			—			—
Issuance of preferred shares	—			13,800			—
Preferred Shares Outstanding, end of period	13,800			13,800			—
Common Shares Outstanding
Common Shares Outstanding, beginning of period (in thousands)	359,151			356,835			373,949
Treasury stock acquired	(3,412		)	—			(20,218		)
Issuance of shares under incentive and stock compensation plans	2,906			2,856			2,301
Return of shares under incentive and stock compensation plans to treasury stock	(796		)	(849		)	(747		)
Issuance of shares for warrant exercise	1,721			309			1,550
Common Shares Outstanding, end of period	359,570			359,151			356,835
Cash dividends declared per common share	$	1.20		$	1.10		$	0.94
Cash dividends declared per preferred share	$	1,125.00		$	—		$	—

See Notes to Consolidated Financial Statements.

F-8

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Consolidated Statements of Cash Flows

	For the years ended December 31,
(in millions)	2019			2018			2017
Operating Activities
Net income (loss)	$	2,085		$	1,807		$	(3,131	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Net realized capital losses (gains)	(395		)	165			(111		)
Amortization of deferred policy acquisition costs	1,622			1,442			1,417
Additions to deferred policy acquisition costs	(1,635		)	(1,404		)	(1,383		)
Depreciation and amortization	451			467			399
Pension settlement expense	—			—			747
Loss on extinguishment of debt	90			6			—
Loss (gain) on sale of business	—			(202		)	3,257
Other operating activities, net	76			408			408
Change in assets and liabilities:
Increase in reinsurance recoverables	(81		)	(323		)	(935		)
Net change in accrued and deferred income taxes	886			(103		)	170
Impact of tax reform on accrued and deferred income taxes	—			—			877
Increase in insurance liabilities	768			493			1,648
Net change in other assets and other liabilities	(378		)	87			(1,177		)
Net cash provided by operating activities	3,489			2,843			2,186
Investing Activities
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	18,499			24,700			31,646
Fixed maturities, fair value option	36			23			148
Equity securities at fair value	1,553			1,230			—
Equity securities, available-for-sale	—			—			810
Mortgage loans	771			483			734
Partnerships	238			433			274
Payments for the purchase of:
Fixed maturities, available-for-sale	(19,881		)	(23,173		)	(30,923		)
Equity securities at fair value	(1,316		)	(1,500		)	—
Equity securities, available-for-sale	—			—			(638		)
Mortgage loans	(1,275		)	(983		)	(1,096		)
Partnerships	(303		)	(481		)	(509		)
Net proceeds from (payments for) derivatives	32			(224		)	(314		)
Net additions to property and equipment	(105		)	(122		)	(250		)
Net proceeds from (payments for) short-term investments	1,491			(3,460		)	(144		)
Other investing activities, net	13			(3		)	21
Proceeds from businesses sold, net of cash transferred	—			1,115			222
Amounts paid for business acquired, net of cash acquired	(1,901		)	—			(1,423		)
Net cash used for investing activities	(2,148		)	(1,962		)	(1,442		)
Financing Activities
Deposits and other additions to investment and universal life-type contracts	123			1,814			4,602
Withdrawals and other deductions from investment and universal life-type contracts	(124		)	(9,210		)	(13,562		)
Net transfers from separate accounts related to investment and universal life-type contracts	—			6,949			7,969
Repayments at maturity or settlement of consumer notes	—			(2		)	(13		)
Net increase (decrease) in securities loaned or sold under agreements to repurchase	(323		)	(621		)	1,320
Repayment of debt	(1,583		)	(826		)	(416		)
Proceeds from the issuance of debt	1,376			490			500
Preferred stock issued, net of issuance costs	—			334			—
Net return of shares under incentive and stock compensation plans	(6		)	(16		)	(10		)
Treasury stock acquired	(200		)	—			(1,028		)
Dividends paid on preferred stock	(21		)	—			—
Dividends paid on common stock	(433		)	(379		)	(341		)
Net cash used for financing activities	(1,191		)	(1,467		)	(979		)
Foreign exchange rate effect on cash	(9		)	(10		)	70
Net increase (decrease) in cash, including cash classified as assets held for sale	141			(596		)	(165		)
Less: Net decrease in cash classified as assets held for sale	—			(537		)	(17		)
Net increase (decrease) in cash and restricted cash	141			(59		)	(148		)
Cash and restricted cash — beginning of period	121			180			328
Cash and restricted cash — end of period	$	262		$	121		$	180
Supplemental Disclosure of Cash Flow Information
Income tax received	$	396		$	9		$	6
Interest paid	$	261		$	292		$	322

See Notes to Consolidated Financial Statements.

F-9

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in millions, except for per share data, unless otherwise stated)

1**.** BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The Hartford Financial Services Group, Inc. is a holding company for insurance and financial services subsidiaries that provide property and casualty insurance, group life and disability products and mutual funds and exchange-traded products to individual and business customers (collectively, “The Hartford”, the “Company”, “we” or “our”).

On May 23, 2019, the Company completed the previously announced acquisition of The Navigators Group, Inc. ("Navigators Group"), a global specialty underwriter, for $70 a share, or $2.137 billion in cash, including transaction expenses.

On May 31, 2018, Hartford Holdings, Inc., a wholly owned subsidiary of the Company, completed the sale of the issued and outstanding equity of Hartford Life, Inc. (“HLI”), a holding company, for its life and annuity operating subsidiaries.

On November 1, 2017, Hartford Life and Accident Insurance Company ("HLA"), a wholly owned subsidiary of the Company, completed the acquisition of Aetna's U.S. group life and disability business through a reinsurance transaction.

On May 10, 2017, the Company completed the sale of its United Kingdom ("U.K.") property and casualty run-off subsidiaries.

For further discussion of these transactions, see Note 2 - Business Acquisitions and Note 21 - Business Dispositions and Discontinued Operations of Notes to Consolidated Financial Statements.

The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which differ materially from the accounting practices prescribed by various insurance regulatory authorities.

Consolidation

The Consolidated Financial Statements include the accounts of The Hartford Financial Services Group, Inc., and entities in which the Company directly or indirectly has a controlling financial interest. Entities in which the Company has significant influence over the operating and financing decisions but does not control are reported using the equity method. All intercompany transactions and balances between The Hartford and its subsidiaries and affiliates that are not held for sale have been eliminated.

Discontinued Operations

The results of operations of a component of the Company are reported in discontinued operations when certain criteria are met as of the date of disposal, or earlier if classified as held-for-sale. When a component is identified for discontinued operations reporting, amounts for prior periods are retrospectively reclassified as discontinued operations. Components are identified as discontinued operations if they are a major part of an entity's operations and financial results such as a separate major line of business or a separate major geographical area of operations.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining property and casualty and group long-term disability insurance product reserves, net of reinsurance; evaluation of goodwill for impairment; valuation of investments and derivative instruments; valuation allowance on deferred tax assets; and contingencies relating to corporate litigation and regulatory matters.

Reclassifications

Certain reclassifications have been made to prior year financial information to conform to the current year presentation. In particular, the restricted cash has been reclassified out of cash to a separate line on the Consolidated Balance Sheet.

Adoption of New Accounting Standards

Reclassification of Effect of Tax Rate Change from AOCI to Retained Earnings

On January 1, 2018, the Company adopted the Financial Accounting Standards Board's ("FASB") new guidance for the effect on deferred tax assets and liabilities related to items recorded in accumulated other comprehensive income ("AOCI") resulting from the Tax Cuts and Jobs Act of 2017 ("Tax Reform") enacted on December 22, 2017. Tax Reform reduced the federal tax rate applied to the Company’s deferred tax balances from 35% to 21% on enactment. Under U.S. GAAP, the Company recorded the total effect of the change in enacted tax rates on deferred tax balances as a charge to income tax expense within net income during the fourth quarter of 2017, including the change in deferred tax balances related to components of AOCI. The new accounting guidance permitted the Company to reclassify the “stranded” tax effects out of AOCI and into retained earnings that resulted from recording the tax effects of unrealized investment gains, unrecognized actuarial losses on pension and other postretirement benefit plans, and cumulative translation adjustments at a 35% tax rate because the 14 point reduction in tax rate was recognized in net income instead of other comprehensive income. On adoption, the Company recorded a reclassification of $88 from AOCI to retained earnings. As a result of the reclassification, in the first quarter of 2018, the Company reduced the estimated loss on sale recorded in income from discontinued operations by $193, net of tax, for the increase in AOCI related to the assets held for sale. The reduction in the loss on sale resulted in a corresponding increase

F-10

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

in assets held for sale and AOCI as of January 1, 2018 and the AOCI associated with assets held for sale was removed from the balance sheet when the sale closed on May 31, 2018. Additionally, as of January 1, 2018, the Company reclassified $105 of stranded tax effects related to continuing operations which reduced AOCI and increased retained earnings.

Financial Instruments- Recognition and Measurement

On January 1, 2018, the Company adopted updated guidance issued by the FASB for the recognition and measurement of financial instruments through a cumulative effect adjustment to the opening balances of retained earnings and AOCI. The new guidance requires investments in equity securities to be measured at fair value with any changes in valuation reported in net income except for investments that are consolidated or are accounted for under the equity method of accounting. The new guidance also requires a deferred tax asset resulting from net unrealized losses on fixed maturities, available-for-sale that are recognized in AOCI to be evaluated for recoverability in combination with the Company’s other deferred tax assets. Under prior guidance, the Company reported equity securities, available-for-sale ("AFS"), at fair value with changes in fair value reported in other comprehensive income. As of January 1, 2018, the Company reclassified from AOCI to retained earnings net unrealized gains of $83, after tax, related to equity securities having a fair value of $1.0 billion. In addition, $10 of net unrealized gains net of shadow DAC related to discontinued operations were reclassified from AOCI to retained earnings of the life and annuity business held for sale, which increased the estimated loss on sale in 2018 by the same amount. Beginning in 2018, the Company reports equity securities at fair value with changes in fair value reported in net realized capital gains and losses.

Revenue Recognition

On January 1, 2018, the Company adopted the FASB’s updated guidance for recognizing revenue from contracts with customers, which excludes insurance contracts and financial instruments. Revenue subject to the guidance is recognized when, or as, goods or services are transferred to customers in an amount that reflects the consideration that an entity is expected to receive in exchange for those goods or services. For all but certain revenues associated with our Hartford Funds business, the updated guidance is consistent with previous guidance for the Company’s transactions and did not have an effect on the Company’s financial position, cash flows or net income. The updated guidance also updated criteria for determining when the Company acts as a principal or an agent. The Company determined that it is the principal for some of its mutual fund distribution service contracts and, upon adoption, reclassified distribution costs of $188 for the year ended December 31, 2017, that were previously netted against fee income to insurance operating costs and other expenses.

Qualitative information about the nature, timing of recognition and cash flows for the Company’s revenues subject to the updated guidance is disclosed below under Significant Accounting Policies-Revenue Recognition and quantitative information is disclosed in Note 4 - Segment Information of Notes to Consolidated Financial Statements.

Hedging Activities

On January 1, 2019, the Company adopted the FASB's updated guidance for hedge accounting through a cumulative effect adjustment of less than $1 to reclassify cumulative ineffectiveness on cash flow hedges from retained earnings to AOCI. The updates allow hedge accounting for new types of interest rate hedges of financial instruments and simplify documentation requirements to qualify for hedge accounting. In addition, any gain or loss from hedge ineffectiveness is reported in the same income statement line with the effective hedge results and the hedged transaction. For cash flow hedges, the ineffectiveness is recognized in earnings only when the hedged transaction affects earnings; otherwise, the ineffectiveness gains or losses remain in AOCI. Under previous accounting, total hedge ineffectiveness was reported separately in realized capital gains and losses apart from the hedged transaction. The adoption did not affect the Company’s financial position or cash flows or have a material effect on net income.

Leases

On January 1, 2019, the Company adopted the FASB’s updated lease guidance. Under the updated guidance, lessees with operating leases are required to recognize a liability for the present value of future minimum lease payments with a corresponding asset for the right of use of the property. Prior to the new guidance, future minimum lease payments on operating leases were commitments that were not recognized as liabilities on the balance sheet. Leases are classified as financing or operating leases. Where the lease is economically similar to a purchase because The Hartford obtains control of the underlying asset, the lease is classified as a financing lease and the Company recognizes amortization of the right of use asset and interest expense on the liability. Where the lease provides The Hartford with only the right to control the use of the underlying asset over the lease term and the lease term is greater than one year, the lease is an operating lease and the lease cost is recognized as rental expense over the lease term on a straight-line basis. Leases with a term of one year or less are also expensed over the lease term but not recognized on the balance sheet. On adoption, The Hartford recorded a lease payment obligation of $160 for outstanding leases and a right of use asset of $150, which is net of $10 in lease incentives received, with no change to comparative periods. As permitted by the new guidance, as of the implementation date, the Company did not reassess whether expired or existing contracts are leases or contain leases, did not change the classification of expired or existing operating leases, and did not reassess initial direct costs for existing leases to determine if deferred costs should be written-off or recorded on adoption. The adoption did not impact net income or cash flows.

Future Adoption of New Accounting Standards

Goodwill

The FASB issued updated guidance on testing goodwill for impairment. The updated guidance requires recognition and measurement of goodwill impairment based on the excess of the carrying value of the reporting unit compared to its estimated fair value, with the amount of the impairment not to exceed the carrying value of the reporting unit’s goodwill. Under existing guidance, if the reporting unit’s carrying value exceeds its estimated fair value, the Company allocates the fair value of the

F-11

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

reporting unit to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. An impairment loss is then recognized for the excess, if any, of the carrying value of the reporting unit’s goodwill compared to the implied goodwill value. The Company will adopt the updated guidance January 1, 2020 on a prospective basis as required. The Company would not have recognized a goodwill impairment loss for the years presented had the updated guidance been in effect. Since the estimated fair value of the reporting unit will no longer be allocated to the assets and liabilities of the reporting unit to determine an implied goodwill value, under the updated guidance changes in market-based factors are more likely to result in a goodwill impairment, whether a reporting unit's fair value is estimated using an income approach or a market approach. For example, changes in the weighted average cost of capital that is used to discount expected cash flows under the income approach or changes in market-based factors such as peer company price to earnings multiples or price to book multiples under a market approach can significantly affect changes to the estimated fair value of each reporting unit and such changes could result in impairments that have a material effect on our results of operations and financial condition.

Financial Instruments - Credit Losses

The FASB issued updated guidance for recognition and measurement of credit losses on financial instruments. The new guidance will replace the “incurred loss” approach with an “expected loss” model for recognizing credit losses for financial instruments carried at other than fair value. Under the new model, an allowance for credit losses ("ACL") will be recorded based on an estimate of credit losses expected over the life of financial instruments carried at other than fair value, such as mortgage loans, reinsurance recoverables and receivables. Under the current accounting model an ACL is recognized using an incurred loss approach. The new guidance also requires that we estimate a liability for credit losses ("LCL") on off-balance-sheet credit exposures such as financial guarantees and mortgage loan commitments that the Company cannot unconditionally cancel. Credit losses on fixed maturities AFS carried at fair value will continue to be measured based on the present value of expected future cash flows; however, the losses will be recognized through an ACL and no longer as an adjustment to the amortized cost. Recoveries of impairments on fixed maturities AFS will be recognized as reversals of the ACL and no longer accreted as investment income through an adjustment to the investment yield. The ACL on fixed maturities AFS cannot cause the net carrying value to be below fair value and, therefore, it is possible that future increases in fair value due to decreases in market interest rates could cause the reversal of a valuation allowance and increase net income. The new guidance also requires purchased financial assets with a more-than-insignificant amount of credit deterioration since original issuance to be recorded based on contractual amounts due with an initial allowance recorded at the date of purchase.

The Company will adopt the guidance effective January 1, 2020, through a cumulative effect adjustment to retained earnings of $18, representing a net increase to the ACL and LCL, after-tax, upon adoption. No ACL will be recognized at adoption for fixed maturities, AFS; rather, these investments will be evaluated for an ACL prospectively.

Reserve for Future Policy Benefits

The FASB issued new guidance on accounting for long-duration insurance contracts. The Company’s long-duration insurance

contracts include paid-up life insurance and whole-life insurance policies resulting from conversion from group life policies and run-off structured settlement and terminal funding agreement liabilities with total future policy benefit reserves of $635 as of December 31, 2019. Under existing guidance, a reserve for future policy benefits is calculated as the present value of future benefits and related expenses less the present value of any future premiums using assumptions “locked in” at the time the policies were issued, including discount rate, lapse rate, mortality, and expense assumptions. Under existing guidance, assumptions are only updated if there is an expected premium deficiency. The new guidance will require that underlying cash flow assumptions (such as for lapse rate, mortality and expenses) be reviewed and updated at least annually in the same quarter each year. The new guidance also requires that the discount rate assumption be updated each quarter and be based on an upper-medium grade (low-credit-risk) fixed-income investment yield. The change in the reserve estimate as a result of updating cash flow assumptions will be recognized in net income. The change in the reserve estimate as a result of updating the discount rate assumption will be recognized in other comprehensive income. Because reserves will be based on updated assumptions and no longer locked in at contract inception, there will no longer be a test for premium deficiency. The new guidance will be effective January 1, 2022, and will be applied to balances in place as of the earliest period presented. Early adoption is permitted. The Company has not yet determined the method or timing for adoption or estimated the effect on the Company’s financial statements.

Significant Accounting Policies

The Company’s significant accounting policies are as follows:

Revenue Recognition

Premium Revenue from Direct Insurance and Assumed Reinsurance

Property and casualty premiums are earned on a pro rata basis over the policy period and include accruals for policies that have been written by agents but not yet reported to us, as well as ultimate premium revenue anticipated under auditable and retrospectively rated policies. We estimate the amount of premium not yet reported based on current and historical trends of the business being written. Such estimates are regularly reviewed and updated and any resulting adjustments are included in the current year's results. Unearned premiums represent the premiums applicable to the unexpired terms of policies in force.

Group life, disability and accident premiums are generally due from policyholders and recognized as revenue on a pro rata basis over the period of the contracts.

An estimated allowance for doubtful accounts is recorded on the basis of periodic evaluations of balances due from insureds, management’s experience and current economic conditions. The Company charges off any balances that are determined to be uncollectible. The allowance for doubtful accounts included in premiums receivable and agents’ balances in the Consolidated Balance Sheets was $145 and $135 as of December 31, 2019 and 2018, respectively.

Revenue from Non-Insurance Contracts with Customers

Installment fees are charged on property and casualty insurance contracts for billing the insurance customer in installments over

F-12

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

the policy term. These fees are recognized in fee income as earned on collection.

Insurance servicing revenues within Personal Lines consist of up-front commissions earned for collecting premiums and processing claims on insurance policies for which The Hartford does not assume underwriting risk, predominantly related to the National Flood Insurance Plan program. These insurance servicing revenues are recognized over the period of the flood program's policy terms.

Group Benefits earns fee income from employers for the administration of underwriting, implementation and claims processing for employer self-funded plans and for leave management services. Fees are recognized as services are provided and collected monthly.

Hartford Funds provides investment management, administrative and distribution services to mutual funds and exchange-traded products. The Company assesses investment advisory, distribution and other asset management fees primarily based on the average daily net asset values from mutual funds and exchange-traded products, which are recorded in the period in which the services are provided and are collected monthly. Fluctuations in domestic and international markets and related investment performance, volume and mix of sales and redemptions of mutual funds or exchange-traded products, and other changes to the composition of assets under management are all factors that ultimately have a direct effect on fee income earned.

Hartford Funds other fees primarily include transfer agent fees, generally assessed as a charge per account, and are recognized as fee income in the period in which the services are provided with payments collected monthly.

Corporate investment management and other fees are primarily for managing third party invested assets, including management of the invested assets of The Hartford’s former life and annuity business. These fees, calculated based on the average quarterly net asset values, are recorded in the period in which the services are provided and are collected quarterly. Fluctuations in markets and interest rates and other changes to the composition of assets under management are all factors that ultimately have a direct effect on fee income earned.

Corporate transition service revenues consist of operational services provided to The Hartford’s former life and annuity business that are provided for a limited period following sale. The transition service revenues are recognized as other revenues in the period in which the services are provided with payments collected monthly.

Dividends to Policyholders

Policyholder dividends are paid to certain property and casualty policyholders. Policies that receive dividends are referred to as participating policies. Participating dividends to policyholders are accrued and reported in insurance operating costs and other expenses and other liabilities using an estimate of the amount to be paid based on underlying contractual obligations under policies and applicable state laws.

Net written premiums for participating property and casualty insurance policies represented 9%, 10% and 10% of total net written premiums for the years ended December 31, 2019, 2018 and 2017, respectively. Participating dividends to property and

casualty policyholders were $30, $23 and $35 for the years ended December 31, 2019, 2018 and 2017, respectively.

There were no additional amounts of income allocated to participating policyholders.

Investments

Overview

The Company’s investments in fixed maturities include bonds, structured securities, redeemable preferred stock and commercial paper. Most of these investments are classified as AFS and are carried at fair value. The after tax difference between fair value and cost or amortized cost is reflected in stockholders’ equity as a component of AOCI. Effective January 1, 2018, equity securities are measured at fair value with any changes in valuation reported in net income. For further information, see Financial Instruments - Recognition and Measurement discussion above. Fixed maturities for which the Company elected the fair value option are classified as FVO, generally certain securities that contain embedded credit derivatives, and are carried at fair value with changes in value recorded in realized capital gains and losses. Mortgage loans are recorded at the outstanding principal balance adjusted for amortization of premiums or discounts and net of valuation allowances. Short-term investments are carried at amortized cost, which approximates fair value. Limited partnerships and other alternative investments are reported at their carrying value and are primarily accounted for under the equity method with the Company’s share of earnings included in net investment income. Recognition of income related to limited partnerships and other alternative investments is delayed due to the availability of the related financial information, as private equity and other funds are generally on a three-month delay and hedge funds on a one-month delay. Accordingly, income for the years ended December 31, 2019, 2018, and 2017 may not include the full impact of current year changes in valuation of the underlying assets and liabilities of the funds, which are generally obtained from the limited partnerships. Other investments primarily consist of investments of consolidated investment funds for which the Company has provided seed money and reports the underlying investments at fair value with changes in the fair value recognized in income consistent with accounting requirements for investment companies. Also included in Other investments are derivative instruments which are carried at fair value and overseas deposits which are measured at fair value using the net asset value as a practical expedient.

Net Realized Capital Gains and Losses

Net realized capital gains and losses from investment sales are reported as a component of revenues and are determined on a specific identification basis. Net realized capital gains and losses also result from fair value changes in fixed maturities, FVO, equity securities, and derivatives contracts that do not qualify, or are not designated, as a hedge for accounting purposes. Impairments and mortgage loan valuation allowances are recognized as net realized capital losses in accordance with the Company’s impairment and mortgage loan valuation allowance policies as discussed in Note 6 -Investments of Notes to Consolidated Financial Statements.

Effective January 1, 2020, the Company will record changes in the ACL on fixed maturities, AFS as a component of net realized capital gains and losses. For further information, see Financial Instruments - Credit Losses discussion above.

F-13

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net Investment Income

Interest income from fixed maturities and mortgage loans is recognized when earned on the constant effective yield method based on estimated timing of cash flows. Most premiums and discounts on fixed maturities are amortized to the maturity date. Premiums on callable bonds may be amortized to call dates based on call prices. For securitized financial assets subject to prepayment risk, yields are recalculated and adjusted periodically to reflect historical and/or estimated future prepayments using the retrospective method; however, if these investments are impaired and for certain other asset-backed securities, any yield adjustments are made using the prospective method. Prepayment fees and make-whole payments on fixed maturities and mortgage loans are recorded in net investment income when earned. For equity securities, dividends are recognized as investment income on the ex-dividend date. Limited partnerships and other alternative investments primarily use the equity method of accounting to recognize the Company’s share of earnings. For impaired fixed maturities, the Company accretes the new amortized cost to the estimated future cash flows over the expected remaining life of the investment by prospectively adjusting the effective yield, if necessary. The Company’s non-income producing investments were not material for the years ended December 31, 2019, 2018 and 2017.

Effective January 1, 2020, the Company will no longer record impairments for credit losses as adjustments to the amortized cost of the fixed maturity, unless there is an intent to sell before recovery from impairment, but rather will record an ACL. Future changes in the ACL resulting from improvements in expected future cash flows will not be recorded as adjustments to yield through net investment income but will be recorded through net realized capital gains (losses). For fixed maturities with an ACL, net investment income will be recognized at the original effective rate and accretion of the ACL will be recognized through net realized capital gains (losses). For further information, see Financial Instruments - Credit Losses discussion above.

Derivative Instruments

Overview

The Company utilizes a variety of over-the-counter ("OTC") derivatives, derivatives cleared through central clearing houses ("OTC-cleared") and exchange traded derivative instruments as part of its overall risk management strategy as well as to enter into replication transactions. The types of instruments may include swaps, caps, floors, forwards, futures and options to achieve one of four Company-approved objectives:

•	to hedge risk arising from interest rate, equity market, commodity market, credit spread and issuer default, price or currency exchange rates or volatility;

•	to manage liquidity;

•	to control transaction costs;

•	to enter into synthetic replication transactions.

Interest rate and credit default swaps involve the periodic exchange of cash flows with other parties, at specified intervals, calculated using agreed upon rates or other financial variables and notional principal amounts. Generally, little to no cash or principal payments are exchanged at the inception of the contract. Typically, at the time a swap is entered into, the cash flow streams exchanged by the counterparties are equal in value.

The Company clears certain interest rate swap and credit default swap derivative transactions through central clearing houses. OTC-cleared derivatives require initial collateral at the inception of the trade in the form of cash or highly liquid securities, such as U.S. Treasuries and government agency investments. Central clearing houses also require additional cash as variation margin based on daily market value movements. For information on collateral, see the derivative collateral arrangements section in Note 7 - Derivatives of Notes to Consolidated Financial Statements. In addition, OTC-cleared transactions include price alignment amounts either received or paid on the variation margin, which are reflected in realized capital gains and losses or, if characterized as interest, in net investment income.

Forward contracts are customized commitments that specify a rate of interest or currency exchange rate to be paid or received on an obligation beginning on a future start date and are typically settled in cash.

Financial futures are standardized commitments to either purchase or sell designated financial instruments, at a future date, for a specified price and may be settled in cash or through delivery of the underlying instrument. Futures contracts trade on organized exchanges. Margin requirements for futures are met by pledging securities or cash, and changes in the futures’ contract values are settled daily in cash.

Option contracts grant the purchaser, for a premium payment, the right to either purchase from or sell to the issuer a financial instrument at a specified price, within a specified period or on a stated date. The contracts may reference commodities, which grant the purchaser the right to either purchase from or sell to the issuer commodities at a specified price, within a specified period or on a stated date. Option contracts are typically settled in cash.

Foreign currency swaps exchange an initial principal amount in two currencies, agreeing to re-exchange the currencies at a future date, at an agreed upon exchange rate. There may also be a periodic exchange of payments at specified intervals calculated using the agreed upon rates and exchanged principal amounts.

The Company’s derivative transactions conducted in insurance company subsidiaries are used in strategies permitted under the derivative use plans required by the State of Connecticut, the State of Illinois and the State of New York insurance departments.

Accounting and Financial Statement Presentation of Derivative Instruments and Hedging Activities

Derivative instruments are recognized on the Consolidated Balance Sheets at fair value and are reported in Other Investments and Other Liabilities. For balance sheet presentation purposes, the Company has elected to offset the fair value amounts, income accruals, and related cash collateral receivables and payables of OTC derivative instruments executed in a legal entity and with the same counterparty or under a master netting agreement, which provides the Company with the legal right of offset.

On the date the derivative contract is entered into, the Company designates the derivative as (1) a hedge of the fair value of a recognized asset or liability (“fair value” hedge), (2) a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset or liability (“cash flow” hedge), (3) a hedge of a net investment in a foreign

F-14

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

operation (“net investment” hedge) or (4) held for other investment and/or risk management purposes, which primarily involve managing asset or liability related risks and do not qualify for hedge accounting. The Company currently does not designate any derivatives as fair value or net investment hedges.

Cash Flow Hedges - Changes in the fair value of a derivative that is designated and qualifies as a cash flow hedge, including foreign-currency cash flow hedges, are recorded in AOCI and are reclassified into earnings when the variability of the cash flow of the hedged item impacts earnings. Gains and losses on derivative contracts that are reclassified from AOCI to current period earnings are included in the line item in the Consolidated Statements of Operations in which the cash flows of the hedged item are recorded. Periodic derivative net coupon settlements are recorded in the line item of the Consolidated Statements of Operations in which the cash flows of the hedged item are recorded. Cash flows from cash flow hedges are presented in the same category as the cash flows from the items being hedged in the Consolidated Statement of Cash Flows.

Other Investment and/or Risk Management Activities - The Company’s other investment and/or risk management activities primarily relate to strategies used to reduce economic risk or replicate permitted investments and do not receive hedge accounting treatment. Changes in the fair value, including periodic derivative net coupon settlements, of derivative instruments held for other investment and/or risk management purposes are reported in current period earnings as net realized capital gains and losses.

Hedge Documentation and Effectiveness Testing

To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated changes in fair value or cash flow of the hedged item. At hedge inception, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking each hedge transaction. The documentation process includes linking derivatives that are designated as fair value, cash flow, or net investment hedges to specific assets or liabilities on the balance sheet or to specific forecasted transactions and defining the effectiveness testing methods to be used. The Company also formally assesses both at the hedge’s inception and ongoing on a quarterly basis, whether the derivatives that are used in hedging transactions have been and are expected to continue to be highly effective in offsetting changes in fair values, cash flows or net investment in foreign operations of hedged items. Hedge effectiveness is assessed primarily using quantitative methods as well as using qualitative methods. Quantitative methods include regression or other statistical analysis of changes in fair value or cash flows associated with the hedge relationship. Qualitative methods may include comparison of critical terms of the derivative to the hedged item.

Discontinuance of Hedge Accounting

The Company discontinues hedge accounting prospectively when (1) it is determined that the qualifying criteria are no longer met; (2) the derivative is no longer designated as a hedging instrument; or (3) the derivative expires or is sold, terminated or exercised.

When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair value hedge, the derivative continues to be carried at fair value on the

balance sheet with changes in its fair value recognized in current period earnings. Changes in the fair value of the hedged item attributable to the hedged risk is no longer adjusted through current period earnings and the existing basis adjustment is amortized to earnings over the remaining life of the hedged item through the applicable earnings component associated with the hedged item.

When cash flow hedge accounting is discontinued because the Company becomes aware that it is not probable that the forecasted transaction will occur, the derivative continues to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in AOCI are recognized immediately in earnings.

In other situations in which hedge accounting is discontinued, including those where the derivative is sold, terminated or exercised, amounts previously deferred in AOCI are reclassified into earnings when earnings are impacted by the hedged item.

Embedded Derivatives

The Company purchases investments that contain embedded derivative instruments. When it is determined that (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host for measurement purposes. The embedded derivative, which is reported with the host instrument in the Consolidated Balance Sheets, is carried at fair value with changes in fair value reported in net realized capital gains and losses.

Credit Risk of Derivative Instruments

Credit risk is defined as the risk of financial loss due to uncertainty of an obligor’s or counterparty’s ability or willingness to meet its obligations in accordance with agreed upon terms. Credit exposures are measured using the market value of the derivatives, resulting in amounts owed to the Company by its counterparties or potential payment obligations from the Company to its counterparties. The Company generally requires that OTC derivative contracts, other than certain forward contracts, be governed by International Swaps and Derivatives Association agreements which are structured by legal entity and by counterparty, and permit right of offset. Some agreements require daily collateral settlement based upon agreed upon thresholds. For purposes of daily derivative collateral maintenance, credit exposures are generally quantified based on the prior business day’s market value and collateral is pledged to and held by, or on behalf of, the Company to the extent the current value of the derivatives is greater than zero, subject to minimum transfer thresholds. The Company also minimizes the credit risk of derivative instruments by entering into transactions with high quality counterparties primarily rated A or better, which are monitored and evaluated by the Company’s risk management team and reviewed by senior management. OTC-cleared derivatives are governed by clearing house rules. Transactions cleared through a central clearing house reduce risk due to their ability to require daily variation margin and act as an independent valuation source. In addition, the Company monitors counterparty credit exposure on a monthly basis to ensure compliance with Company policies and statutory limitations.

F-15

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Cash and Restricted Cash

Cash represents cash on hand and demand deposits with banks or other financial institutions. Restrictions on cash primarily relate to funds that are held to support regulatory and contractual obligations.

Reinsurance

The Company cedes insurance to affiliated and unaffiliated insurers in order to limit its maximum losses and to diversify its exposures and provide statutory surplus relief. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company also assumes reinsurance from other insurers and is a member of and participates in reinsurance pools and associations. Assumed reinsurance refers to the Company’s acceptance of certain insurance risks that other insurance companies or pools have underwritten.

Reinsurance accounting is followed for ceded and assumed transactions that provide indemnification against loss or liability relating to insurance risk (i.e. risk transfer). To meet risk transfer requirements, a reinsurance agreement must include insurance risk, consisting of underwriting and timing risk, and a reasonable possibility of a significant loss to the reinsurer. If the ceded and assumed transactions do not meet risk transfer requirements, the Company accounts for these transactions as financing transactions.

Premiums, benefits, losses and loss adjustment expenses reflect the net effects of ceded and assumed reinsurance transactions. Included in other assets are prepaid reinsurance premiums, which represent the portion of premiums ceded to reinsurers applicable to the unexpired terms of the reinsurance contracts. Reinsurance recoverables are balances due from reinsurance companies for paid and unpaid losses and loss adjustment expenses and are presented net of an allowance for uncollectible reinsurance. Changes in the allowance for uncollectible reinsurance are reported in benefits, losses and loss adjustment expenses in the Company's Consolidated Statements of Operations.

The Company evaluates the financial condition of its reinsurers and concentrations of credit risk. Reinsurance is placed with reinsurers that meet strict financial criteria established by the Company.

Retroactive reinsurance agreements, including adverse development covers, are reinsurance agreements under which our reinsurer agrees to reimburse us as a result of past insurable events. For these agreements, the consideration paid in excess of the estimated ultimate losses recoverable under the agreement at inception is recognized as a loss on reinsurance transaction. The benefit of subsequent adverse development ceded up to the total consideration paid is recognized as ceded losses and loss adjustment expenses. The excess of the estimated amounts ultimately recoverable under the agreement over the consideration paid is recognized as a deferred gain liability and amortized into income over the period the ceded losses are recovered in cash from the reinsurer. The amount of the deferred gain liability is recalculated each period based on cumulative recoveries not yet collected relative to the latest estimate of ultimate losses recoverable. Ceded loss reserves under retroactive agreements were $747 and $523, and the deferred gain liability reported in other liabilities was $16 and $0, as of December 31, 2019 and 2018, respectively. In any given

period, the change in deferred gain included in net income includes amortization of the deferred gain based on the percentage of ultimate ceded losses collected plus any change in the deferred gain liability due to changes in the estimated ultimate losses recoverable. The effect on income from change in the deferred gain was a charge to earnings of $16 for the year ended December 31, 2019. There was no change in the deferred gain in 2018 or 2017.

Deferred Policy Acquisition Costs

DAC represents costs that are directly related to the acquisition of new and renewal insurance contracts and incremental direct costs of contract acquisition that are incurred in transactions with independent third parties or in compensation to employees. Such costs primarily include commissions, premium taxes, costs of policy issuance and underwriting, and certain other expenses that are directly related to successfully issued contracts.

For property and casualty insurance products and group life, disability and accident contracts, costs are deferred and amortized ratably over the period the related premiums are earned. Deferred acquisition costs are reviewed to determine if they are recoverable from future income, and if not, are charged to expense. Anticipated investment income is considered in the determination of the recoverability of DAC.

Income Taxes

The Company recognizes taxes payable or refundable for the current year and deferred taxes for the tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. A deferred tax provision is recorded for the tax effects of differences between the Company's current taxable income and its income before tax under generally accepted accounting principles in the Consolidated Statements of Operations. For deferred tax assets, the Company records a valuation allowance that is adequate to reduce the total deferred tax asset to an amount that will more likely than not be realized.

Goodwill

Goodwill represents the excess of the cost to acquire a business over the fair value of net assets acquired. Goodwill is not amortized but is reviewed for impairment at least annually or more frequently if events occur or circumstances change that would indicate that a triggering event for a potential impairment has occurred. The goodwill impairment test follows a two-step process. In the first step, the fair value of a reporting unit is compared to its carrying value. A reporting unit is defined as an operating segment or one level below an operating segment. The Company’s reporting units, for which goodwill has been allocated consist of Commercial Lines, Personal Lines, Group Benefits, and Hartford Funds. If the carrying value of a reporting unit exceeds its fair value, the second step of the impairment test is performed for purposes of measuring the impairment. In the second step, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit to determine an implied goodwill value. If the carrying amount of the reporting unit’s goodwill exceeds the implied goodwill value, an impairment loss is recognized in an amount equal to that excess. Effective January 1, 2020, the goodwill impairment measurement will be based on the first step only and, as such, goodwill will be impaired up to the

F-16

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

amount that the carrying value of the reporting unit exceeds the fair value. For further information, see Goodwill discussion above.

Management’s determination of the fair value of each reporting unit incorporates multiple inputs into discounted cash flow calculations, including assumptions that market participants would make in valuing the reporting unit. Assumptions include levels of economic capital required to support the business, future business growth, earnings projections, the weighted average cost of capital used for purposes of discounting and, for the Hartford Funds segment, assets under management. Decreases in business growth, decreases in earnings projections and increases in the weighted average cost of capital will all cause a reporting unit’s fair value to decrease, increasing the possibility of impairments.

Intangible Assets

Acquired intangible assets on the Consolidated Balance Sheets include purchased customer relationship and agency or other distribution rights and licenses measured at fair value at acquisition. The Company amortizes finite-lived other intangible assets over their useful lives generally on a straight-line basis over the period of expected benefit, ranging from 1 to 15 years. Management revises amortization periods if it believes there has been a change in the length of time that an intangible asset will continue to have value. Indefinite-lived intangible assets are not subject to amortization. Intangible assets are assessed for impairment generally when events or circumstances indicate a potential impairment and at least annually for indefinite-lived intangibles. Finite-lived intangible assets are impaired if the carrying amount is not recoverable from undiscounted cash flows. Indefinite-lived intangible assets are impaired if the carrying amount exceeds fair value. Impaired intangible assets are written down to fair value.

Property and Equipment

Property and equipment, which includes capitalized software, is carried at cost net of accumulated depreciation. Depreciation is based on the estimated useful lives of the various classes of property and equipment and is determined principally on the straight-line method. Accumulated depreciation was $1.9 billion and $1.6 billion as of December 31, 2019 and 2018, respectively. Depreciation expense was $283, $232, and $197 for the years ended December 31, 2019, 2018 and 2017, respectively.

Unpaid Losses and Loss Adjustment Expenses

For property and casualty and group life and disability insurance and assumed reinsurance products, the Company establishes reserves for unpaid losses and loss adjustment expenses to provide for the estimated costs of paying claims under insurance policies written by the Company. These reserves include estimates for both claims that have been reported and those that have been incurred but not reported ("IBNR"), and include estimates of all losses and loss adjustment expenses associated with processing and settling these claims. Estimating the ultimate cost of future losses and loss adjustment expenses is an uncertain and complex process. This estimation process is based significantly on the assumption that past developments are an appropriate predictor of future events, and involves a variety of actuarial techniques that analyze experience, trends and other relevant factors. The effects of inflation are implicitly considered

in the reserving process. A number of complex factors influence the uncertainties involved with the reserving process including social and economic trends and changes in the concepts of legal liability and damage awards. Accordingly, final claim settlements may vary from the present estimates, particularly when those payments may not occur until well into the future. The Company regularly reviews the adequacy of its estimated losses and loss adjustment expense reserves by reserve line within the various reporting segments. Adjustments to previously established reserves are reflected in the operating results of the period in which the adjustment is determined to be necessary. Such adjustments could possibly be significant, reflecting any variety of new and adverse or favorable trends.

Most of the Company’s property and casualty insurance products reserves are not discounted. However, the Company has discounted to present value certain reserves for indemnity payments that are due to claimants under workers’ compensation policies because the payment pattern and the ultimate costs are reasonably fixed and determinable on an individual claim basis. The discount rate is based on the risk free rate for the expected claim duration as determined in the year the claims were incurred. The Company also has discounted liabilities for structured settlement agreements that provide fixed periodic payments to claimants. These structured settlements include annuities purchased to fund unpaid losses for permanently disabled claimants. These structured settlement liabilities are discounted to present value using the rate implicit in the purchased annuities and the purchased annuities are accounted for within reinsurance recoverables.

Group life and disability contracts with long-tail claim liabilities are discounted because the payment pattern and the ultimate costs are reasonably fixed and determinable on an individual claim basis. The discount rates are estimated based on investment yields expected to be earned on the cash flows net of investment expenses and expected credit losses. The Company establishes discount rates for these reserves in the year the claims are incurred (the incurral year) which is when the estimated settlement pattern is determined. The discount rate for life and disability reserves acquired from Aetna's U.S. group life and disability business were based on interest rates in effect at the acquisition date of November 1, 2017.

For further information about how unpaid losses and loss adjustment expenses are established, see Note 11 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements.

Foreign Currency

Foreign currency translation gains and losses are reflected in stockholders’ equity as a component of AOCI. The Company’s foreign subsidiaries’ balance sheet accounts are translated at the exchange rates in effect at each year end and income statement accounts are translated at the average rates of exchange prevailing during the year. The national currencies of the international operations are generally their functional currencies; however, the U.S. dollar is the functional currency of Lloyd's Syndicate 1221 ("Lloyd's Syndicate"), the Lloyd's Syndicate for which the Company is the sole corporate member, in the U.K. Gains and losses resulting from the remeasurement of foreign currency transactions are reflected in earnings in realized capital gains (losses) in the period in which they occur.

F-17

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2**.** BUSINESS ACQUISITIONS

Navigators Group

On May 23, 2019, The Hartford acquired 100% of the outstanding shares of Navigators Group for $70 a share, or $2.121 billion in cash, comprised of cash of $2.098 billion and a liability for cash awards to replace share-based awards of $23. The acquisition of the specialty underwriter expands product offerings and geographic reach, and adds underwriting and industry talent to strengthen the Company’s value proposition to agents and customers.

Fair Value of Assets Acquired and Liabilities Assumed at the Acquisition Date

	As of May 23, 2019
Assets
Cash and invested assets	$	3,848
Premiums receivable	492
Reinsurance recoverables	1,100
Prepaid reinsurance premiums	238
Other intangible assets	580
Property and equipment	83
Other assets	99
Total Assets Acquired	6,440
Liabilities
Unpaid losses and loss adjustment expenses	2,823
Unearned premiums	1,219
Long-term debt	284
Deferred income taxes, net	48
Other liabilities	568
Total Liabilities Assumed	4,942
Net identifiable assets acquired	1,498
Goodwill [1]	623
Net Assets Acquired	$	2,121

[1] Non-deductible for income tax purposes.

Intangible Assets Recorded in Connection with the Acquisition

Asset	Amount			Weighted Average Expected Life
Value of in-force contracts - Property and Casualty ("P&C")	$	180		1
Distribution relationships	302			15
Trade name	17			10
Total finite life intangibles	499			10
Capacity of Lloyd's Syndicate	66
Licenses	15
Total indefinite life intangibles	81
Total other intangible assets	$	580

The value of in-force contracts represents the estimated profits relating to the unexpired contracts in force net of related prepaid reinsurance at the acquisition date through expiry of the contracts. The value of distribution relationships was estimated using net cash flows expected to come from the renewals of in-force contracts and new business sold through existing distribution partners less costs to service the related policies. The value of the trade name was estimated using an assumed cost of a market-based royalty fee applied to net cash flows expected to come from business marketed as Navigators, a brand of The Hartford. Lloyd's of London is an insurance market-place operating worldwide ("Lloyd's"). Lloyd's does not underwrite risks. Corporate members accept underwriting risks through the syndicates that they form. The Company accepts risks as the sole corporate member of the Lloyd's Syndicate. The value of the capacity of Lloyd’s Syndicate was estimated using net cash flows attributable to Navigators Group's right to underwrite business up to an approved level of premium in the Lloyd’s market. The values for in-force contracts, the distribution relationships, trade name and the capacity of the Lloyd's Syndicate were estimated using a discounted cash flow method. Significant inputs to the valuation models include estimates of expected new business, premium retention rates, investment returns, claim costs, expenses and discount rates based on a weighted average cost of capital. The value of licenses to write insurance in over 50 U.S. jurisdictions was estimated based on recent transactions for shell companies.

Property and equipment includes real estate owned and right of use assets under leases that were valued based on current values and market rental rates, software that was valued based on estimated replacement cost and furniture and equipment. These will be amortized over periods consistent with the Company’s policy.

The fair value of unpaid losses and loss adjustment expenses net of related reinsurance recoverables was estimated based on the present value of expected future net unpaid loss and loss adjustment expense payments discounted using a risk-free interest rate as of the acquisition date plus a risk margin. The discount and risk margin amounts substantially offset.

Debt assumed in the transaction was valued based on the principal and interest payments discounted at the current market yield. This debt was paid off in August 2019. For further discussion of this transaction, see Note 13 - Debt of Notes to Consolidated Financial Statements.

The $623 of goodwill recognized is largely attributable to the acquired employee workforce and underwriting talent, leverageable operating platform, improved investment yield and economies of scale. Goodwill is allocated to the Company's Commercial Lines reporting segment.

Immediately after closing on the acquisition of Navigators Group, effective May 23, 2019, the Company purchased an aggregate excess of loss reinsurance agreement covering adverse reserve development (“Navigators ADC”) from National Indemnity Company ("NICO") on behalf of Navigators Insurance Company and certain of its affiliates (collectively, “Navigators Insurers”). Under the Navigators ADC, the Navigators Insurers paid NICO a reinsurance premium of $91 in exchange for reinsurance

F-18

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

coverage of $300 of adverse net loss reserve development that attaches $100 above the Navigators Insurers' existing net loss and allocated loss adjustment reserves as of December 31, 2018 subject to the treaty of $1.816 billion for accidents and losses prior to December 31, 2018. In addition to recognizing a $91 before tax charge to earnings in 2019 for the Navigators ADC reinsurance premium, the Company recognized a charge against earnings of $97 before tax in the second quarter of 2019 as a result of a review of Navigators Insurers’ net acquired reserves upon acquisition of the business. Navigators Insurers had previously recognized $52 before tax of adverse reserve development in the first quarter of 2019, including $32 of adverse development subject to the Navigators ADC. As such, reserve development of $97 before tax recognized upon acquisition of the business included $68 remaining of the $100 Navigators ADC retention for 2018 and prior accident years and $29 of adverse reserve development related to the 2019 accident year which is not covered by the Navigators ADC.

On 2018 and prior accident year reserves subject to the Navigators ADC, the Company recognized a total of $84 of adverse development in 2019, including the $68 of reserve development recorded upon acquisition of the business. The $84 of prior accident year reserve development was net of a $91 net reinsurance benefit recognized under the Navigators ADC. While the Company has ceded $107 of losses to the ADC through December 31, 2019, which has been recognized as a reinsurance recoverable, $16 of the ceded losses has been recognized as a deferred gain within other liabilities since the Navigators ADC has been accounted for as retroactive reinsurance and cumulative losses ceded of $107 exceed the ceded premium paid of $91. As the Company has ceded $107 of the $300 available limit, there is $193 of remaining limit available as of December 31, 2019.

Since the acquisition date of May 23, 2019, the revenues and net losses of the business acquired have been included in the Company's Consolidated Statements of Operations in the Commercial Lines reporting segment with revenues of $1.0 billion and net losses of $167 during the period from the acquisition date to December 31, 2019, including the $91 before tax ($72 net of tax) of premium paid for the Navigators ADC, a charge of $97 before tax ($77 net of tax) for the increase in acquired reserves following the acquisition, a charge of $16 before tax ($13 net of tax) for the deferred gain on retroactive reinsurance and net investment income of $67 before tax ($54 net of tax).

The Company recognized $17 of acquisition related costs for the twelve months ended December 31, 2019. These costs are

included in insurance operating costs and other expenses in the Consolidated Statement of Operations.

The acquisition date fair values of assets and liabilities, including insurance reserves and intangible assets, as well as the related estimated useful lives of intangibles, are provisional and are subject to revision within one year of the acquisition date.

The following table presents supplemental unaudited pro forma amounts of revenue and net income for the year ended December 31, 2019 and 2018 for the Company as though the business was acquired on January 1, 2018. Pro forma adjustments include the revenue and earnings of Navigators Group for each period as well as amortization of identifiable intangible assets acquired.

Pro Forma Results for the Year Ended December 31

	Revenue			Earnings
2019 Supplemental (unaudited) combined pro forma	$	21,416		$	2,080
2018 Supplemental (unaudited) combined pro forma	$	20,398		$	1,828

Aetna Group Insurance

On November 1, 2017, The Hartford acquired Aetna's U.S. group life and disability business through a reinsurance transaction for total consideration of $1.452 billion, comprised of cash of $1.450 billion and share-based awards of $2, and recorded provisional estimates of the fair value of the assets acquired and liabilities assumed. The acquisition enables the Company to increase its market share in the group life and disability industry. In 2018, The Hartford and Aetna agreed on the final assets acquired and liabilities assumed as of the acquisition date and The Hartford finalized its provisional estimates with a final cash settlement within the one year measurement period allowed under U.S. GAAP. As a result, in the third quarter of 2018, The Hartford recorded additional assets and liabilities at fair value of $80 and $80, respectively, with no change in goodwill. The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date, the measurement period adjustments recorded, and the final purchase price allocation.

F-19

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair Value of Assets Acquired and Liabilities Assumed at the Acquisition Date

	Preliminary Value as of November 1, 2017 (as previously reported as of December 31, 2017)			Measurement Period Adjustments			As Adjusted Value as of November 1, 2017
Assets
Cash and invested assets	$	3,360		$	45		$	3,405
Premiums receivable	96			7			103
Deferred income taxes, net	56			13			69
Other intangible assets	629			—			629
Property and equipment	68			—			68
Reinsurance recoverables	—			31			31
Other assets	16			(16		)	—
Total Assets Acquired	4,225			80			4,305
Liabilities
Unpaid losses and loss adjustment expenses	2,833			71			2,904
Reserve for future policy benefits payable	346			1			347
Other policyholder funds and benefits payable	245			1			246
Unearned premiums	3			1			4
Other liabilities	69			6			75
Total Liabilities Assumed	3,496			80			3,576
Net identifiable assets acquired	729			—			729
Goodwill [1]	723			—			723
Net Assets Acquired	$	1,452		$	—		$	1,452

[1]	*Approximately $*610 is deductible for income tax purposes.

The effect of measurement period adjustments on the Consolidated Statements of Operations for the year ended December 31, 2018 was immaterial and was determined as if the accounting had been completed as of the acquisition date.

Intangible Assets Recorded in Connection with the Acquisition

Asset	Amount			Estimated Useful Life
Value of in-force contracts	$	23		1 year
Customer relationships	590			15 years
Marketing agreement with Aetna	16			15 years
Total	$	629

The value of in-force contracts represents the estimated profits relating to the unexpired contracts in force at the acquisition date through expiry of the contracts. The value of customer relationships was estimated using net cash flows expected to come from the renewals of in-force contracts acquired less costs to service the related policies. The value of the marketing agreement with Aetna was estimated using net cash flows expected to come from incremental new business written during the three years duration of the agreement, less costs to service the related contracts. The value for each of the identifiable intangible assets was estimated using a discounted cash flow method. Significant inputs to the valuation models include estimates of expected premiums, persistency rates, investment returns, claim costs, expenses and discount rates based on a weighted average cost of capital.

Property and equipment represents an internally developed integrated absence management software acquired that was valued based on estimated replacement cost. The software is amortized over 5 years on a straight-line basis.

Unpaid losses and loss adjustment expenses acquired were recorded at estimated fair value equal to the present value of expected future unpaid loss and loss adjustment expense payments discounted using the net investment yield estimated as of the acquisition date plus a risk margin. The fair value adjustment for the risk margin is amortized over 12 years based on the payout pattern of losses and loss expenses as estimated as of the acquisition date.

The revenues and earnings of the business acquired are included in the Company's Consolidated Statements of Operations in the Group Benefits reporting segment and were $370 and $(37) in the year of acquisition, respectively.

The $723 of goodwill recognized is largely attributable to the acquired employee workforce, expected expense synergies, economies of scale, and tax benefits not included within the value of identifiable intangibles. Goodwill is allocated to the Company's Group Benefits reporting segment.

The Company recognized $17 of acquisition related costs in the year of acquisition. These costs are included in insurance operating costs and other expenses in the Consolidated Statement of Operations.

The following table presents supplemental pro forma amounts of revenue and net income for the Company in 2017 as though the business was acquired on January 1, 2016.

F-20

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pro Forma Results (Unaudited)

	Twelve months ended December 31, 2017 [1]
Total Revenue	$	18,899
Net Income	$	(3,077	)

[1]Pro forma adjustments include the revenue and earnings of the Aetna U.S. group life and disability business as well as amortization of identifiable intangible assets acquired and the fair value adjustment to acquired insurance reserves. Pro forma adjustments do not include retrospective adjustments to defer and amortize acquisition costs as would be recorded under the Company’s accounting policy.

3**.** EARNINGS (LOSS) PER COMMON SHARE

Computation of Basic and Diluted Earnings per Common Share

	For the years ended December 31,
(In millions, except for per share data)	2019			2018			2017
Earnings
Income (loss) from continuing operations, net of tax	$	2,085		$	1,485		$	(262	)
Less: Preferred stock dividends	21			6			—
Income (loss) from continuing operations, net of tax, available to common stockholders	2,064			1,479			(262		)
Income (loss) from discontinued operations, net of tax, available to common stockholders	—			322			(2,869		)
Net income (loss) available to common stockholders	$	2,064		$	1,801		$	(3,131	)
Shares
Weighted average common shares outstanding, basic	360.9			358.4			363.7
Dilutive effect of warrants [1]	0.5			1.9			—
Dilutive effect of stock-based awards under compensation plans	3.5			3.8			—
Weighted average common shares outstanding and dilutive potential common shares [2]	364.9			364.1			363.7
Earnings per common share
Basic
Income (loss) from continuing operations, net of tax, available to common stockholders	$	5.72		$	4.13		$	(0.72	)
Income (loss) from discontinued operations, net of tax, available to common stockholders	—			0.90			(7.89		)
Net income (loss) available to common stockholders	$	5.72		$	5.03		$	(8.61	)
Diluted
Income (loss) from continuing operations, net of tax, available to common stockholders	$	5.66		$	4.06		$	(0.72	)
Income (loss) from discontinued operations, net of tax, available to common stockholders	—			0.89			(7.89		)
Net income (loss) available to common stockholders	$	5.66		$	4.95		$	(8.61	)

[1]	On June 26, 2019 the Capital Purchase Program warrants issued in 2009 expired.

[2]	For additional information, see Note 15 - Equity and Note 19 - Stock Compensation Plans of Notes to Consolidated Financial Statements.

Basic earnings per common share is computed based on the weighted average number of common shares outstanding during the year. Diluted earnings per common share includes the dilutive effect of assumed exercise or issuance of warrants and stock-based awards under compensation plans.

In periods where a loss from continuing operations available to common stockholders or net loss available to common stockholders is recognized, inclusion of incremental dilutive shares would be antidilutive. Due to the antidilutive impact, such shares are excluded from the diluted earnings per share calculation of income (loss) from continuing operations, net of tax, available to common stockholders and net income (loss) available to common stockholders in such periods. As a result, for the year

ended December 31, 2017, the Company was required to use basic weighted average common shares outstanding in the diluted calculations, since the inclusion of 4.3 million shares for stock compensation plans and 2.5 million shares for warrants would have been antidilutive to the calculations.

Under the treasury stock method, for warrants and stock-based awards, shares are assumed to be issued and then reduced for the number of shares repurchaseable with theoretical proceeds at the average market price for the period. Contingently issuable shares are included for the number of shares issuable assuming the end of the reporting period was the end of the contingency period, if dilutive.

F-21

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

4**.** SEGMENT INFORMATION

The Company conducts business principally in five reporting segments including Commercial Lines, Personal Lines, Property & Casualty Other Operations, Group Benefits and Hartford Funds, as well as a Corporate category.

Over 95% of the Company's revenues are generated in the United States ("U.S."). The remaining revenues are generated in the United Kingdom, continental Europe and other international locations.

The Company’s reporting segments, as well as the Corporate category, are as follows:

Commercial Lines

Commercial Lines provides workers’ compensation, property, automobile, general liability, umbrella, professional liability, bond, marine, livestock and assumed reinsurance to businesses in the U.S. and internationally, along with a variety of customized insurance products and risk management services including professional liability, bond, surety, and specialty casualty coverages.

Personal Lines

Personal Lines provides standard automobile, homeowners and personal umbrella coverages to individuals across the U.S., including a special program designed exclusively for members of AARP.

Property & Casualty Other Operations

Property & Casualty Other Operations includes certain property and casualty operations, managed by the Company, that have discontinued writing new business and includes substantially all of the Company’s asbestos and environmental exposures.

Group Benefits

Group Benefits provides employers, associations and financial institutions with group life, accident and disability coverage, along with other products and services, including voluntary benefits, and group retiree health.

Hartford Funds

Hartford Funds offers investment products for retail and retirement accounts and provides investment management and administrative services such as product design, implementation and oversight. This business also manages a portion of the mutual funds which support the variable annuity products within the life and annuity business sold in May 2018.

Corporate

The Company includes in the Corporate category discontinued operations related to the life and annuity business sold in May 2018, reserves for run-off structured settlement and terminal funding agreement liabilities, capital raising activities (including debt financing and related interest expense), transaction expenses incurred in connection with an acquisition, certain purchase accounting adjustments related to goodwill and other expenses not allocated to the reporting segments. Corporate also includes investment management fees and expenses related to managing third party business, including management of the invested assets of Talcott Resolution Life, Inc. and its subsidiaries ("Talcott Resolution"). In addition, Corporate includes a 9.7%

ownership interest in the legal entity that acquired the life and annuity business sold in 2018. For further discussion of continued involvement in the life and annuity business sold, see Note 21 - Business Dispositions and Discontinued Operations of Notes to Consolidated Financial Statements.

Financial Measures and Other Segment Information

Certain transactions between segments occur during the year that primarily relate to tax settlements, insurance coverage, expense reimbursements, services provided, investment transfers and capital contributions. In addition, certain inter-segment transactions occur that relate to interest income on allocated surplus. Consolidated net investment income is unaffected by such transactions.

F-22

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Revenues

	For the years ended December 31,
	2019			2018			2017
Earned premiums and fee income:
Commercial Lines
Workers’ compensation	$	3,314		$	3,341		$	3,287
Liability	1,064			653			604
Marine	147			—			—
Package business	1,471			1,364			1,301
Property	728			618			604
Professional liability	447			254			246
Bond	261			241			230
Assumed reinsurance	180			—			—
Automobile	713			610			630
Total Commercial Lines	8,325			7,081			6,902
Personal Lines
Automobile	2,248			2,398			2,617
Homeowners	987			1,041			1,117
Total Personal Lines [1]	3,235			3,439			3,734
Property & Casualty Other Operations	2			—			—
Group Benefits
Group disability	2,828			2,746			1,718
Group life	2,521			2,611			1,745
Other	254			241			214
Total Group Benefits	5,603			5,598			3,677
Hartford Funds
Mutual fund and ETP	907			932			888
Talcott Resolution life and annuity separate accounts [2]	92			100			104
Total Hartford Funds [3]	999			1,032			992
Corporate	60			32			4
Total earned premiums and fee income	18,224			17,182			15,309
Total net investment income	1,951			1,780			1,603
Net realized capital gains (losses)	395			(112		)	165
Other revenues	170			105			85
Total revenues	$	20,740		$	18,955		$	17,162

[1]	For 2019*,* 2018 and 2017*, AARP members accounted for earned premiums of* $2.9 billion*,* $3.0 billion and $3.2 billion*, respectively.*

[2]	Represents revenues earned on the life and annuity separate account AUM sold in May 2018 that is still managed by the Company's Hartford Funds segment.

[3]	Excludes distribution costs of $188 for the year ended December 31, 2017, that were previously netted against fee income and are now presented gross in insurance operating costs and other expenses.

Net Income (Loss)

	For the years ended December 31,
	2019			2018			2017
Commercial Lines	$	1,192		$	1,212		$	865
Personal Lines	318			(32		)	(9		)
Property & Casualty Other Operations	61			15			69
Group Benefits	536			340			294
Hartford Funds	149			148			106
Corporate	(171		)	124			(4,456		)
Net income (loss)	$	2,085		$	1,807		$	(3,131	)
Preferred stock dividends	21			6			—
Net income (loss) available to common stockholders	$	2,064		$	1,801		$	(3,131	)

Net Investment Income

	For the years ended December 31,
	2019			2018			2017
Commercial Lines	$	1,129		$	997		$	949
Personal Lines	179			155			141
Property & Casualty Other Operations	84			90			106
Group Benefits	486			474			381
Hartford Funds	7			5			3
Corporate	66			59			23
Net investment income	$	1,951		$	1,780		$	1,603

Amortization of Deferred Policy Acquisition Costs

	For the years ended December 31,
	2019			2018			2017
Commercial Lines	$	1,296		$	1,048		$	1,009
Personal Lines	259			275			309
Group Benefits	54			45			33
Hartford Funds	12			16			21
Corporate	1			—			—
Total amortization of deferred policy acquisition costs	$	1,622		$	1,384		$	1,372

F-23

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amortization of Other Intangible Assets

	For the years ended December 31,
	2019			2018			2017
Commercial Lines	$	18		$	4		$	1
Personal Lines	6			4			4
Group Benefits	41			60			9
Corporate	1			—			—
Total amortization of other intangible assets	$	66		$	68		$	14

Income Tax Expense (Benefit)

	For the years ended December 31,
	2019			2018			2017
Commercial Lines	$	270		$	267		$	377
Personal Lines	76			(19		)	26
Property & Casualty Other Operations	12			(7		)	24
Group Benefits	126			84			38
Hartford Funds	37			38			63
Corporate	(46		)	(95		)	457
Total income tax expense	$	475		$	268		$	985

Assets

	As of December 31,
	2019			2018
Commercial Lines	$	42,041		$	31,693
Personal Lines	6,310			6,180
Property & Casualty Other Operations	3,560			3,351
Group Benefits	14,595			14,114
Hartford Funds	634			583
Corporate	3,677			6,386
Total assets	$	70,817		$	62,307

Revenue from Non-Insurance Contracts with Customers

		For the years ended December 31,
	Revenue Line Item	2019			2018			2017
Commercial Lines
Installment billing fees	Fee income	$	35		$	34		$	37
Personal Lines
Installment billing fees	Fee income	37			40			44
Insurance servicing revenues	Other revenues	83			84			85
Group Benefits
Administrative services	Fee income	180			175			91
Hartford Funds
Advisor, distribution and other management fees	Fee income	911			947			897
Other fees	Fee income	88			85			95
Corporate
Investment management and other fees	Fee income	50			32			4
Transition service revenues	Other revenues	20			21			—
Total non-insurance revenues with customers		$	1,404		$	1,418		$	1,253

5**.** FAIR VALUE MEASUREMENTS

The Company carries certain financial assets and liabilities at estimated fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. Our fair value framework includes a

hierarchy that gives the highest priority to the use of quoted prices in active markets, followed by the use of market observable inputs, followed by the use of unobservable inputs. The fair value hierarchy levels are as follows:

F-24

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Level 1	Fair values based primarily on unadjusted quoted prices for identical assets, or liabilities, in active markets that the Company has the ability to access at the measurement date.

Level 2	Fair values primarily based on observable inputs, other than quoted prices included in Level 1, or based on prices for similar assets and liabilities.

Level 3	Fair values derived when one or more of the significant inputs are unobservable (including assumptions about risk). With little or no observable market, the determination of fair values uses considerable judgment and represents the

Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability. Also included are securities that are traded within illiquid markets and/or priced by independent brokers.

The Company will classify the financial asset or liability by level based upon the lowest level input that is significant to the determination of the fair value. In most cases, both observable inputs (e.g., changes in interest rates) and unobservable inputs (e.g., changes in risk assumptions) are used to determine fair values that the Company has classified within Level 3.

Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of December 31, 2019
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
Asset backed securities ("ABS")	$	1,476		$	—		$	1,461		$	15
Collateralized loan obligations ("CLOs")	2,183			—			2,088			95
Commercial mortgage-backed securities ("CMBS")	4,338			—			4,329			9
Corporate	17,396			—			16,664			732
Foreign government/government agencies	1,123			—			1,120			3
Municipal	9,498			—			9,498			—
Residential mortgage-backed securities ("RMBS")	4,869			—			4,309			560
U.S. Treasuries	1,265			330			935			—
Total fixed maturities	42,148			330			40,404			1,414
Fixed maturities, FVO	11			—			11			—
Equity securities, at fair value	1,657			1,401			183			73
Derivative assets
Credit derivatives	11			—			11			—
Interest rate derivatives	1			—			1			—
Total derivative assets [1]	12			—			12			—
Short-term investments	2,921			1,028			1,878			15
Total assets accounted for at fair value on a recurring basis	$	46,749		$	2,759		$	42,488		$	1,502
Liabilities accounted for at fair value on a recurring basis
Derivative liabilities
Credit derivatives	$	(1	)	$	—		$	(1	)	$	—
Equity derivatives	(15		)	—			—			(15		)
Foreign exchange derivatives	(2		)	—			(2		)	—
Interest rate derivatives	(60		)	—			(60		)	—
Total derivative liabilities [2]	(78		)	—			(63		)	(15		)
Contingent consideration [3]	(22		)	—			—			(22		)
Total liabilities accounted for at fair value on a recurring basis	$	(100	)	$	—		$	(63	)	$	(37	)

F-25

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of December 31, 2018
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	1,276		$	—		$	1,266		$	10
CLO	1,437			—			1,337			100
CMBS	3,552			—			3,540			12
Corporate	13,398			—			12,878			520
Foreign government/government agencies	847			—			844			3
Municipal	10,346			—			10,346			—
RMBS	3,279			—			2,359			920
U.S. Treasuries	1,517			330			1,187			—
Total fixed maturities	35,652			330			33,757			1,565
Fixed maturities, FVO	22			—			22			—
Equity securities, at fair value	1,214			1,093			44			77
Derivative assets
Credit derivatives	5			—			5			—
Equity derivatives	3			—			—			3
Foreign exchange derivatives	(2		)	—			(2		)	—
Interest rate derivatives	1			—			1			—
Total derivative assets [1]	7			—			4			3
Short-term investments	4,283			1,039			3,244			—
Total assets accounted for at fair value on a recurring basis	$	41,178		$	2,462		$	37,071		$	1,645
Liabilities accounted for at fair value on a recurring basis
Derivative liabilities
Credit derivatives	$	(2	)	$	—		$	(2	)	$	—
Equity derivatives	1			—			1			—
Foreign exchange derivatives	(5		)	—			(5		)	—
Interest rate derivatives	(62		)	—			(63		)	1
Total derivative liabilities [2]	(68		)	—			(69		)	1
Contingent consideration [3]	(35		)	—			—			(35		)
Total liabilities accounted for at fair value on a recurring basis	$	(103	)	$	—		$	(69	)	$	(34	)

[1]	Includes derivative instruments in a net positive fair value position after consideration of the accrued interest and impact of collateral posting requirements which may be imposed by agreements and applicable law. See footnote 2 to this table for derivative liabilities.

[2]	Includes derivative instruments in a net negative fair value position (derivative liability) after consideration of the accrued interest and impact of collateral posting requirements which may be imposed by agreements and applicable law.

[3]	For additional information see the Contingent Consideration section below.

In connection with the acquisition of Navigators Group, the Company has overseas deposits in Other Invested Assets of $38 as of December 31, 2019, which are measured at fair value using the net asset value as a practical expedient. There were no overseas deposits held as of December 31, 2018.

Fixed Maturities, Equity Securities, Short-term Investments, and Derivatives

Valuation Techniques

The Company generally determines fair values using valuation techniques that use prices, rates, and other relevant information evident from market transactions involving identical or similar

instruments. Valuation techniques also include, where appropriate, estimates of future cash flows that are converted into a single discounted amount using current market expectations. The Company uses a "waterfall" approach comprised of the following pricing sources and techniques, which are listed in priority order:

•	Quoted prices, unadjusted, for identical assets or liabilities in active markets, which are classified as Level 1.

•

Prices from third-party pricing services, which primarily utilize a combination of techniques. These services utilize recently reported trades of identical, similar, or benchmark securities making adjustments for market observable inputs available through the reporting date. If there are no recently reported trades, they may use a discounted cash flow technique to develop a price using expected cash flows based

F-26

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

upon the anticipated future performance of the underlying collateral discounted at an estimated market rate. Both techniques develop prices that consider the time value of future cash flows and provide a margin for risk, including liquidity and credit risk. Most prices provided by third-party pricing services are classified as Level 2 because the inputs used in pricing the securities are observable. However, some securities that are less liquid or trade less actively are classified as Level 3. Additionally, certain long-dated securities, such as municipal securities and bank loans, include benchmark interest rate or credit spread assumptions that are not observable in the marketplace and are thus classified as Level 3.

•

Internal matrix pricing, which is a valuation process internally developed for private placement securities for which the Company is unable to obtain a price from a third-party pricing service. Internal pricing matrices determine credit spreads that, when combined with risk-free rates, are applied to contractual cash flows to develop a price. The Company develops credit spreads using market based data for public securities adjusted for credit spread differentials between public and private securities, which are obtained from a survey of multiple private placement brokers. The market-based reference credit spread considers the issuer’s financial strength and term to maturity, using an independent public security index and trade information, while the credit spread differential considers the non-public nature of the security. Securities priced using internal matrix pricing are classified as Level 2 because the inputs are observable or can be corroborated with observable data.

•

Independent broker quotes, which are typically non-binding, use inputs that can be difficult to corroborate with observable market based data. Brokers may use present value techniques using assumptions specific to the security types, or they may use recent transactions of similar securities. Due to the lack of transparency in the process that brokers use to develop prices, valuations that are based on independent broker quotes are classified as Level 3.

The fair value of derivative instruments is determined primarily using a discounted cash flow model or option model technique and incorporates counterparty credit risk. In some cases, quoted market prices for exchange-traded and OTC-cleared derivatives

may be used and in other cases independent broker quotes may be used. The pricing valuation models primarily use inputs that are observable in the market or can be corroborated by observable market data. The valuation of certain derivatives may include significant inputs that are unobservable, such as volatility levels, and reflect the Company’s view of what other market participants would use when pricing such instruments.

Valuation Controls

The process for determining the fair value of investments is monitored by the Valuation Committee, which is a cross-functional group of senior management within the Company. The purpose of the Valuation Committee is to provide oversight of the pricing policy, procedures and controls, including approval of valuation methodologies and pricing sources. The Valuation Committee reviews market data trends, pricing statistics and trading statistics to ensure that prices are reasonable and consistent with our fair value framework. Controls and procedures used to assess third-party pricing services are reviewed by the Valuation Committee, including the results of annual due-diligence reviews. Controls include, but are not limited to, reviewing daily and monthly price changes, stale prices, and missing prices and comparing new trade prices to third-party pricing services, weekly price changes to published bond prices of a corporate bond index, and daily OTC derivative market valuations to counterparty valuations. The Company has a dedicated pricing unit that works with trading and investment professionals to challenge the price received by a third party pricing source if the Company believes that the valuation received does not accurately reflect the fair value. New valuation models and changes to current models require approval by the Valuation Committee. In addition, the Company’s enterprise-wide Operational Risk Management function provides an independent review of the suitability and reliability of model inputs, as well as an analysis of significant changes to current models.

Valuation Inputs

Quoted prices for identical assets in active markets are considered Level 1 and consist of on-the-run U.S. Treasuries, money market funds, exchange-traded equity securities, open-ended mutual funds, certain short-term investments, and exchange traded futures and option contracts.

F-27

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Valuation Inputs Used in Levels 2 and 3 Measurements for Securities and Derivatives

	Level 2 Primary Observable Inputs	Level 3 Primary Unobservable Inputs
Fixed Maturity Investments
Structured securities (includes ABS, CLOs, CMBS and RMBS)
	• Benchmark yields and spreads • Monthly payment information • Collateral performance, which varies by vintage year and includes delinquency rates, loss severity rates and refinancing assumptions • Credit default swap indices Other inputs for ABS, CLOs, and RMBS: • Estimate of future principal prepayments, derived from the characteristics of the underlying structure • Prepayment speeds previously experienced at the interest rate levels projected for the collateral	• Independent broker quotes • Credit spreads beyond observable curve • Interest rates beyond observable curve Other inputs for less liquid securities or those that trade less actively, including subprime RMBS: • Estimated cash flows • Credit spreads, which include illiquidity premium • Constant prepayment rates • Constant default rates • Loss severity
Corporates
	• Benchmark yields and spreads • Reported trades, bids, offers of the same or similar securities • Issuer spreads and credit default swap curves Other inputs for investment grade privately placed securities that utilize internal matrix pricing : • Credit spreads for public securities of similar quality, maturity, and sector, adjusted for non-public nature	• Independent broker quotes • Credit spreads beyond observable curve • Interest rates beyond observable curve Other inputs for below investment grade privately placed securities and private bank loans: • Independent broker quotes • Credit spreads for public securities of similar quality, maturity, and sector, adjusted for non-public nature
U.S Treasuries, Municipals, and Foreign government/government agencies
	• Benchmark yields and spreads • Issuer credit default swap curves • Political events in emerging market economies • Municipal Securities Rulemaking Board reported trades and material event notices • Issuer financial statements	• Credit spreads beyond observable curve • Interest rates beyond observable curve
Equity Securities
	• Quoted prices in markets that are not active	• For privately traded equity securities, internal discounted cash flow models utilizing earnings multiples or other cash flow assumptions that are not observable
Short-term Investments
	• Benchmark yields and spreads • Reported trades, bids, offers • Issuer spreads and credit default swap curves • Material event notices and new issue money market rates	• Independent broker quotes
Derivatives
Credit derivatives
	• Swap yield curve • Credit default swap curves	Not applicable
Equity derivatives
	• Equity index levels • Swap yield curve	• Independent broker quotes • Equity volatility
Foreign exchange derivatives
	• Swap yield curve • Currency spot and forward rates • Cross currency basis curves	Not applicable
Interest rate derivatives
	• Swap yield curve	• Independent broker quotes • Interest rate volatility

F-28

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Significant Unobservable Inputs for Level 3 - Securities

Assets accounted for at fair value on a recurring basis	Fair Value			Predominant Valuation Technique	Significant Unobservable Input	Minimum	Maximum	Weighted Average [1]	Impact of Increase in Input on Fair Value [2]
As of December 31, 2019
CLOs [3]	$	95		Discounted cash flows	Spread	246 bps	246 bps	246 bps	Decrease
CMBS [3]	$	1		Discounted cash flows	Spread (encompasses prepayment, default risk and loss severity)	9 bps	1,832 bps	161 bps	Decrease
Corporate [4]	$	633		Discounted cash flows	Spread	93 bps	788 bps	236 bps	Decrease
RMBS [3]	$	560		Discounted cash flows	Spread [6]	5 bps	233 bps	79 bps	Decrease
					Constant prepayment rate [6]	—%	11%	6%	Decrease [5]
					Constant default rate [6]	1%	6%	3%	Decrease
					Loss severity [6]	—%	100%	70%	Decrease
As of December 31, 2018
CMBS [3]	$	2		Discounted cash flows	Spread (encompasses prepayment, default risk and loss severity)	9 bps	1,040 bps	182 bps	Decrease
Corporate [4]	$	274		Discounted cash flows	Spread	145 bps	1,175 bps	263 bps	Decrease
RMBS [3]	$	815		Discounted cash flows	Spread [6]	12 bps	215 bps	86 bps	Decrease
					Constant prepayment rate [6]	1%	15%	6%	Decrease [5]
					Constant default rate [6]	1%	8%	3%	Decrease
					Loss severity [6]	—%	100%	61%	Decrease

[1]	The weighted average is determined based on the fair value of the securities.

[2]	Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table.

[3]	Excludes securities for which the Company bases fair value on broker quotations.

[4]	Excludes securities for which the Company bases fair value on broker quotations; however, included are broker priced lower-rated private placement securities for which the Company receives spread and yield information to corroborate the fair value.

[5]	Decrease for above market rate coupons and increase for below market rate coupons.

[6]	Generally, a change in the assumption used for the constant default rate would have been accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for constant prepayment rate and would have resulted in wider spreads.

Significant Unobservable Inputs for Level 3 - Derivatives

	Fair Value			Predominant Valuation Technique	Significant Unobservable Input	Minimum		Maximum		Weighted Average [1]		Impact of Increase in Input on Fair Value [2]
As of December 31, 2019
Equity options	$	(15	)	Option model	Equity volatility	13	%	28	%	17	%	Increase
As of December 31, 2018
Interest rate swaptions [3]	$	1		Option model	Interest rate volatility	3	%	3	%	3	%	Increase
Equity options	$	3		Option model	Equity volatility	19	%	21	%	20	%	Increase

[1]	The weighted average is determined based on the fair value of the derivatives.

[2]	Conversely, the impact of a decrease in input would have the opposite impact to the fair value as that presented in the table. Changes are based on long positions, unless otherwise noted. Changes in fair value will be inversely impacted for short positions.

[3]	The swaptions presented are purchased options that have the right to enter into a pay-fixed swap.

F-29

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The tables above exclude certain securities for which fair values are predominately based on independent broker quotes. While the Company does not have access to the significant unobservable inputs that independent brokers may use in their pricing process, the Company believes brokers likely use inputs similar to those used by the Company and third-party pricing services to price similar instruments. As such, in their pricing models, brokers likely use estimated loss severity rates, prepayment rates, constant default rates and credit spreads. Therefore, similar to non-broker priced securities, increases in these inputs would generally cause fair values to decrease. For the year ended December 31, 2019, no significant adjustments were made by the Company to broker prices received.

Contingent Consideration

The acquisition of Lattice Strategies LLC ("Lattice") on July 29, 2016 requires the Company to make payments to former owners of Lattice of up to $60 contingent upon growth in ETP AUM over a period of four years beginning on the date of acquisition. The contingent consideration is measured at fair value on a quarterly basis by projecting future eligible ETP AUM over the contingency period to estimate the amount of expected payout. The future expected payout is discounted back to the valuation date using a risk-adjusted discount rate of 11.8%. The risk-adjusted discount rate is an internally generated and significant unobservable input to fair value.

The contingency period for ETP AUM growth ends July 29, 2020 and management adjusts the fair value of the contingent consideration when it revises its projection of ETP AUM for the

acquired business. Before discounting to fair value, the Company estimates a total contingent consideration payout of $43 , of which $20 was paid in the twelve months of 2019 with ETP AUM of $3.3 billion as of December 31, 2019. Accordingly, as of December 31, 2019, the fair value of $22 reflects remaining consideration payable of $23, assuming ETP AUM for the acquired business grows to approximately $4.1 billion over the contingency period.

Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs

The Company uses derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instrument may not be classified with the same fair value hierarchy level as the associated asset or liability. Therefore, the realized and unrealized gains and losses on derivatives reported in the Level 3 rollforward may be offset by realized and unrealized gains and losses of the associated assets and liabilities in other line items of the financial statements.

F-30

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the Year Ended December 31, 2019

					Total realized/unrealized gains (losses)
		Fair value as of January 1, 2019			Included in net income [1]			Included in OCI [2]			Purchases			Settlements			Sales			Transfers into Level 3 [3]			Transfers out of Level 3 [3]			Fair value as of December 31, 2019
Assets
Fixed Maturities, AFS
	ABS	$	10		$	—		$	—		$	20		$	(1	)	$	—		$	—		$	(14	)	$	15
	CLOs	100			—			—			329			(127		)	(6		)	—			(201		)	95
	CMBS	12			—			1			34			(4		)	—			—			(34		)	9
	Corporate	520			(4		)	16			354			(59		)	(88		)	61			(68		)	732
	Foreign Govt./Govt. Agencies	3			—			—			—			—			—			—			—			3
	RMBS	920			1			(8		)	134			(214		)	(35		)	—			(238		)	560
Total Fixed Maturities, AFS		1,565			(3		)	9			871			(405		)	(129		)	61			(555		)	1,414
Equity Securities, at fair value		77			—			—			9			—			(13		)	—			—			73
Derivatives, net [4]
	Interest rate	1			(1		)	—			—			—			—			—			—			—
Total Derivatives, net [4]		1			(1		)	—			—			—			—			—			—			—
Short-term investments		—			—			—			15			—			—			—			—			15
Total Assets		1,643			(4		)	9			895			(405		)	(142		)	61			(555		)	1,502
Liabilities
Derivatives, net [4]
	Equity	3			(18		)	—			—			—			—			—			—			(15		)
Total Derivatives, net [4]		3			(18		)	—			—			—			—			—			—			(15		)
Contingent Consideration		(35		)	(7		)	—			—			20			—			—			—			(22		)
Total Liabilities		$	(32	)	$	(25	)	$	—		$	—		$	20		$	—		$	—		$	—		$	(37	)

F-31

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the Year Ended December 31, 2018

					Total realized/unrealized gains (losses)
		Fair value as of January 1, 2018			Included in net income [1]			Included in OCI [2]			Purchases			Settlements			Sales			Transfers into Level 3 [3]			Transfers out of Level 3 [3]			Fair value as of December 31, 2018
Assets
Fixed Maturities, AFS
	ABS	$	19		$	—		$	—		$	90		$	(5	)	$	(4	)	$	12		$	(102	)	$	10
	CLOs	95			—			—			330			—			(13		)	—			(312		)	100
	CMBS	69			(1		)	—			25			(14		)	(8		)	—			(59		)	12
	Corporate	520			1			(18		)	197			(36		)	(52		)	31			(123		)	520
	Foreign Govt./Govt. Agencies	2			—			—			1			—			—			—			—			3
	Municipal	17			—			(1		)	—			—			(1		)	—			(15		)	—
	RMBS	1,230			—			(16		)	273			(319		)	(52		)	4			(200		)	920
Total Fixed Maturities, AFS		1,952			—			(35		)	916			(374		)	(130		)	47			(811		)	1,565
Equity Securities, at fair value		76			29			—			12			—			(40		)	—			—			77
Derivatives, net [4]
	Equity	1			3			—			1			—			(2		)	—			—			3
	Interest rate	1			—			—			—			—			—			—			—			1
Total Derivatives, net [4]		2			3			—			1			—			(2		)	—			—			4
Total Assets		2,030			32			(35		)	929			(374		)	(172		)	47			(811		)	1,646
Liabilities
Contingent Considerations		(29		)	(6		)	—			—			—			—			—			—			(35		)
Total Liabilities		$	(29	)	$	(6	)	$	—		$	—		$	—		$	—		$	—		$	—		$	(35	)

[1]	Amounts in these columns are generally reported in net realized capital gains (losses). All amounts are before income taxes.

[2]	All amounts are before income taxes.

[3]	Transfers in and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.

[4]	Derivative instruments are reported in this table on a net basis for asset (liability) positions and reported in the Consolidated Balance Sheets in other investments and other liabilities.

F-32

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Changes in Unrealized Gains (Losses) for Financial Instruments Classified as Level 3 Still Held at Year End

		December 31,
		2019						2018
		Changes in Unrealized Gain/(Loss) included in Net Income [1] [2]			Changes in Unrealized Gain/(Loss) included in OCI [3]			Changes in Unrealized Gain/(Loss) included in Net Income [1] [2]			Changes in Unrealized Gain/(Loss) included in OCI [3]
Assets
Fixed Maturities, AFS
	ABS	$	—		$	—		$	—		$	1
	CMBS	—			1			(1		)	28
	Corporate	(2		)	15			—			(42		)
	Foreign Govt./Govt. Agencies	—			1			—			—
	Municipal	—			—			—			24
	RMBS	—			(7		)	—			17
Total Fixed Maturities, AFS		(2		)	10			(1		)	28
Equity Securities, at fair value		1			—			—			—
Derivatives, net
	Equity	(18		)	—			1
	Interest rate	(1		)	—			—			—
Total Derivatives, net		(19		)	—			1			—
Total Assets		(20		)	10			—			28
Liabilities
Contingent Consideration		(7		)				(6		)
Total Liabilities		$	(7	)	$	—		$	(6	)	$	—

[1]	All amounts in these rows are reported in net realized capital gains (losses). All amounts are before income taxes.

[2]	Amounts presented are for Level 3 only and therefore may not agree to other disclosures included herein.

[3]	Changes in unrealized gain/(loss) on fixed maturities, AFS are reported in changes in net unrealized gain on securities in the Consolidated Statements of Comprehensive Income. Changes in interest rate derivatives are reported in changes in net gain on cash flow hedging instruments in the Consolidated Statements of Comprehensive Income.

Fair Value Option

The Company has elected the fair value option for certain RMBS that contain embedded credit derivatives with underlying credit risk. These securities are included within Fixed Maturities, FVO on the Consolidated Balance Sheets and changes in the fair value of these securities are reported in net realized capital gains and losses.

As of December 31, 2019 and December 31, 2018, the fair value of assets and liabilities using the fair value option was $11 and $22, respectively, within the residential real estate sector.

For the year-ended December 31, 2019, there were no realized capital gains (losses) related to the fair value of assets using the fair value option. For the year-ended December 31, 2018, the realized capital gains (losses) related to the fair value of assets using the fair value option were $(1) within the residential real estate sector. For the year-ended December 31, 2017, the income earned from FVO and the changes recorded in net realized capital gains (losses) were driven by corporate bond and equity securities of $(1) and $1, respectively.

F-33

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Financial Instruments Not Carried at Fair Value

Financial Assets and Liabilities Not Carried at Fair Value

	December 31, 2019								December 31, 2018
	Fair Value Hierarchy Level	Carrying Amount			Fair Value				Fair Value Hierarchy Level	Carrying Amount			Fair Value
Assets
Mortgage loans	Level 3	$	4,215		$	4,350			Level 3	$	3,704		$	3,746
Liabilities
Other policyholder funds and benefits payable	Level 3	$	763		$	765			Level 3	$	774		$	775
Senior notes [1]	Level 2	$	3,759		$	4,456			Level 2	$	3,589		$	3,887
Junior subordinated debentures [1]	Level 2	$	1,089		$	1,153			Level 2	$	1,089		$	1,052

[1]Included in long-term debt in the Consolidated Balance Sheets, except for current maturities, which are included in short-term debt.

6**.** INVESTMENTS

Net Investment Income

	For the years ended December 31,
(Before tax)	2019			2018			2017
Fixed maturities [1]	$	1,559		$	1,459		$	1,303
Equity securities	46			32			24
Mortgage loans	165			141			124
Limited partnerships and other alternative investments	232			205			174
Other investments [2]	32			20			49
Investment expenses	(83		)	(77		)	(71		)
Total net investment income	$	1,951		$	1,780		$	1,603

[1]	Includes net investment income on short-term investments.

[2]	Includes income from derivatives that hedge fixed maturities and qualify for hedge accounting.

Net Realized Capital Gains (Losses)

	For the years ended December 31,
(Before tax)	2019			2018			2017
Gross gains on sales	$	234		$	114		$	275
Gross losses on sales	(56		)	(172		)	(113		)
Equity securities [1]	254			(48		)	—
Net OTTI losses recognized in earnings	(3		)	(1		)	(8		)
Valuation allowances on mortgage loans	1			—			(1		)
Other, net [2]	(35		)	(5		)	12
Net realized capital gains (losses)	$	395		$	(112	)	$	165

[1]

The net unrealized gain (loss) on equity securities included in net realized capital gains (losses) related to equity securities still held as of December 31, 2019*, were* $164 for the year-ended December 31, 2019*. The net unrealized gain (loss) on equity securities included in net realized capital gains (losses) related to equity securities still held as of* December 31, 2018*, were* $(80) for the year-ended December 31, 2018*. Prior to January 1, 2018, changes in net unrealized gains (losses) on equity securities were included in AOCI.*

[2]	For the years ended December 31, 2019, 2018 and 2017, gains (losses) from transactional foreign currency revaluation were $(9), $1 and $14*, respectively. Also includes gains (losses) on non-qualifying derivatives of* $(24)**, $(12)**, and $(6) , respectively for 2019*,* 2018 and 2017*.*

F-34

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Sales of AFS Securities

	For the years ended December 31,
	2019			2018			2017
Fixed maturities, AFS
Sale proceeds	$	14,421		$	21,327		$	17,614
Gross gains	233			90			204
Gross losses	(56		)	(169		)	(90		)
Equity securities, AFS
Sale proceeds							$	607
Gross gains							69
Gross losses							(23		)

Sales of AFS securities in 2019 were primarily a result of duration and liquidity management as well as tactical changes to the portfolio as a result of changing market conditions.

Recognition and Presentation of Other-Than-Temporary Impairments

The Company will record an OTTI for fixed maturities if the Company intends to sell or it is more likely than not that the Company will be required to sell the security before a recovery in value. A corresponding charge is recorded in net realized capital losses equal to the difference between the fair value and amortized cost basis of the security.

The Company will also record an OTTI for those fixed maturities for which the Company does not expect to recover the entire amortized cost basis. For these securities, the excess of the amortized cost basis over its fair value is separated into the portion representing a credit OTTI, which is recorded in net realized capital losses, and the remaining non-credit amount, which is recorded in OCI. The credit OTTI amount is the excess of its amortized cost basis over the Company’s best estimate of discounted expected future cash flows. The non-credit amount is the excess of the best estimate of the discounted expected future cash flows over the fair value. The Company’s best estimate of discounted expected future cash flows becomes the new cost basis and accretes prospectively into net investment income over the estimated remaining life of the security.

Developing the Company’s best estimate of expected future cash flows is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions regarding the future performance. The Company's considerations include, but are not limited to, (a) changes in the financial condition of the issuer and the underlying collateral, (b) whether the issuer is current on contractually obligated interest and principal payments, (c) credit ratings, (d) payment structure of the security and (e) the extent to which the fair value has been less than the amortized cost of the security.

For non-structured securities, assumptions include, but are not limited to, economic and industry-specific trends and fundamentals, security-specific developments, industry earnings multiples and the issuer’s ability to restructure and execute asset sales.

For structured securities, assumptions include, but are not limited to, various performance indicators such as historical and projected default and recovery rates, credit ratings, current and projected delinquency rates, loan-to-value ("LTV") ratios, average cumulative collateral loss rates that vary by vintage year, prepayment speeds, and property value declines. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries which may include estimating the underlying collateral value.

Prior to January 1, 2018, the Company recorded an OTTI for certain equity securities with debt-like characteristics if the Company intended to sell or it was more likely than not that the Company was required to sell the security before a recovery in value as well as for those equity securities for which the Company did not expect to recover the entire amortized cost basis. The Company also recorded an OTTI for equity securities where the decline in the fair value was deemed to be other-than-temporary.

Impairments in Earnings by Type

	For the years ended December 31,
	2019			2018			2017
Credit impairments	$	3		$	1		$	2
Impairments on equity securities							6
Total impairments	$	3		$	1		$	8

Cumulative Credit Impairments

	For the years ended December 31,
(Before tax)	2019			2018			2017
Balance as of beginning of period	$	(19	)	$	(25	)	$	(110	)
Additions for credit impairments recognized on [1]:
Securities not previously impaired	(3		)	—			(1		)
Securities previously impaired	—			(1		)	(1		)
Reductions for credit impairments previously recognized on:
Securities that matured or were sold during the period	3			7			76
Securities due to an increase in expected cash flows	—			—			11
Balance as of end of period	$	(19	)	$	(19	)	$	(25	)

[1]	These additions are included in the net OTTI losses recognized in earnings in the Consolidated Statements of Operations.

F-35

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Available-for-Sale Securities

AFS Securities by Type

	December 31, 2019																December 31, 2018
	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value			Non- Credit OTTI [1]				Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value			Non- Credit OTTI [1]
ABS	$	1,461		$	18		$	(3	)	$	1,476		$	—			$	1,272		$	5		$	(1	)	$	1,276		$	—
CLOs	2,186			5			(8		)	2,183			—				1,455			2			(20		)	1,437			—
CMBS	4,210			141			(13		)	4,338			(4		)		3,581			35			(64		)	3,552			(5		)
Corporate	16,435			986			(25		)	17,396			—				13,696			148			(446		)	13,398			—
Foreign govt./govt. agencies	1,057			66			—			1,123			—				866			7			(26		)	847			—
Municipal	8,763			737			(2		)	9,498			—				9,972			421			(47		)	10,346			—
RMBS	4,775			97			(3		)	4,869			—				3,270			44			(35		)	3,279			—
U.S. Treasuries	1,191			75			(1		)	1,265			—				1,491			41			(15		)	1,517			—
Total fixed maturities, AFS	40,078			2,125			(55		)	42,148			(4		)		35,603			703			(654		)	35,652			(5		)

[1]	Represents the amount of cumulative non-credit OTTI losses recognized in OCI on securities that also had credit impairments. These losses are included in gross unrealized losses as of December 31, 2019 and 2018*.*

Fixed maturities, AFS, by Contractual Maturity Year

	December 31, 2019							December 31, 2018
	Amortized Cost			Fair Value				Amortized Cost			Fair Value
One year or less	$	1,082		$	1,090			$	999		$	1,002
Over one year through five years	7,200			7,401				5,786			5,791
Over five years through ten years	7,395			7,803				6,611			6,495
Over ten years	11,769			12,988				12,629			12,820
Subtotal	27,446			29,282				26,025			26,108
Mortgage-backed and asset-backed securities	12,632			12,866				9,578			9,544
Total fixed maturities, AFS	$	40,078		$	42,148			$	35,603		$	35,652

Estimated maturities may differ from contractual maturities due to security call or prepayment provisions. Due to the potential for variability in payment speeds (i.e. prepayments or extensions), mortgage-backed and asset-backed securities are not categorized by contractual maturity.

Concentration of Credit Risk

The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification, where applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk. The Company had no investment exposure to any credit concentration risk of a single issuer greater than 10% of the Company's stockholders' equity, other than the U.S. government and certain U.S. government agencies as of December 31, 2019 or December 31, 2018. As of December 31, 2019, other than U.S. government and certain U.S. government agencies, the Company’s three largest exposures by issuer were the Government of United Kingdom, New York State Dormitory Authority, and the Wells Fargo & Company each of which comprised less than 1% of total invested assets. As of December 31, 2018, other than U.S. government and certain U.S. government agencies, the Company’s three largest exposures by

issuer were New York State Dormitory Authority, Commonwealth of Massachusetts, and the New York City Transitional Finance Authority each of which comprised less than 1% of total invested assets. The Company’s three largest exposures by sector as of December 31, 2019 were the municipal, RMBS, and CMBS sectors which comprised approximately 18%, 9% and 8%, respectively, of total invested assets. The Company’s three largest exposures by sector as of December 31, 2018 were municipal securities, CMBS, and the financial services sectors which comprised approximately 22%, 8% and 7%, respectively, of total invested assets.

F-36

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Unrealized Losses on AFS Securities

Unrealized Loss Aging for AFS Securities by Type and Length of Time as of December 31, 2019

	Less Than 12 Months										12 Months or More										Total
	Amortized Cost			Fair Value			Unrealized Losses				Amortized Cost			Fair Value			Unrealized Losses				Amortized Cost			Fair Value			Unrealized Losses
ABS	$	401		$	398		$	(3	)		$	9		$	9		$	—			$	410		$	407		$	(3	)
CLOs	681			679			(2		)		929			923			(6		)		1,610			1,602			(8		)
CMBS	545			538			(7		)		26			20			(6		)		571			558			(13		)
Corporate	798			789			(9		)		344			328			(16		)		1,142			1,117			(25		)
Foreign govt./govt. agencies	101			101			—				29			29			—				130			130			—
Municipal	224			222			(2		)		—			—			—				224			222			(2		)
RMBS	617			614			(3		)		68			68			—				685			682			(3		)
U.S. Treasuries	88			88			—				35			34			(1		)		123			122			(1		)
Total fixed maturities, AFS in an unrealized loss position	$	3,455		$	3,429		$	(26	)		$	1,440		$	1,411		$	(29	)		$	4,895		$	4,840		$	(55	)

Unrealized Loss Aging for AFS Securities by Type and Length of Time as of December 31, 2018

	Less Than 12 Months										12 Months or More										Total
	Amortized Cost			Fair Value			Unrealized Losses				Amortized Cost			Fair Value			Unrealized Losses				Amortized Cost			Fair Value			Unrealized Losses
ABS	$	566		$	566		$	—			$	113		$	112		$	(1	)		$	679		$	678		$	(1	)
CLOs	1,358			1,338			(20		)		7			7			—				1,365			1,345			(20		)
CMBS	896			882			(14		)		1,129			1,079			(50		)		2,025			1,961			(64		)
Corporate	7,174			6,903			(271		)		2,541			2,366			(175		)		9,715			9,269			(446		)
Foreign govt./govt. agencies	407			391			(16		)		203			193			(10		)		610			584			(26		)
Municipal	1,643			1,613			(30		)		292			275			(17		)		1,935			1,888			(47		)
RMBS	1,344			1,329			(15		)		648			628			(20		)		1,992			1,957			(35		)
U.S. Treasuries	497			492			(5		)		339			329			(10		)		836			821			(15		)
Total fixed maturities, AFS in an unrealized loss position	13,885			13,514			(371		)		5,272			4,989			(283		)		19,157			18,503			(654		)

As of December 31, 2019, AFS securities in an unrealized loss position consisted of 871 securities, primarily in the corporate and CMBS sectors, which were depressed primarily due to widening of credit spreads since the securities were purchased. As of December 31, 2019, 96% of these securities were depressed less than 20% of cost or amortized cost. The decrease in unrealized losses during 2019 was primarily attributable to lower interest rates and tighter credit spreads.

Most of the securities depressed for twelve months or more relate to corporate, CMBS, and CLO securities. Corporate, CMBS, and CLO securities were primarily depressed because current market spreads are wider than at the securities' respective purchase dates. Certain other corporate securities were depressed because the securities have floating-rate coupons and have long-dated maturities, and current credit spreads are wider than when these securities were purchased. The Company neither has an intention to sell nor does it expect to be required to sell the securities outlined in the preceding discussion.

Mortgage Loans

Mortgage Loan Valuation Allowances

Mortgage loans are considered to be impaired when management estimates that, based upon current information and events, it is probable that the Company will be unable to collect amounts due according to the contractual terms of the loan agreement. The

Company reviews mortgage loans on a quarterly basis to identify potential credit losses. Among other factors, management reviews current and projected macroeconomic trends, such as unemployment rates and property-specific factors such as rental rates, occupancy levels, LTV ratios and debt service coverage ratios (“DSCR”). In addition, the Company considers historical, current and projected delinquency rates and property values. Estimates of collectibility require the use of significant management judgment and include the probability and timing of borrower default and loss severity estimates. In addition, cash flow projections may change based upon new information about the borrower's ability to pay and/or the value of underlying collateral such as changes in projected property value estimates.

For mortgage loans that are deemed impaired, a valuation allowance is established for the difference between the carrying amount and estimated fair value. The mortgage loan's estimated fair value is most frequently the Company's share of the fair value of the collateral but may also be the Company’s share of either (a) the present value of the expected future cash flows discounted at the loan’s effective interest rate or (b) the loan’s observable market price. A valuation allowance may be recorded for an individual loan or for a group of loans that have an LTV ratio of 90% or greater, a low DSCR or have other lower credit quality characteristics. Changes in valuation allowances are recorded in net realized capital gains and losses. Interest income on impaired loans is accrued to the extent it is deemed collectible and the borrowers continue to make payments under the original or

F-37

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

restructured loan terms. The Company stops accruing interest income on loans when it is probable that the Company will not receive interest and principal payments according to the contractual terms of the loan agreement. The Company resumes accruing interest income when it determines that sufficient collateral exists to satisfy the full amount of the loan principal and interest payments and when it is probable cash will be received in the foreseeable future. Interest income on defaulted loans is recognized when received.

As of December 31, 2019, mortgage loans had an amortized cost of $4.2 billion and carrying value of $4.2 billion, with no valuation allowance. As of December 31, 2018, mortgage loans had an amortized cost of $3.7 billion and carrying value of $3.7 billion, with a valuation allowance of $1.

As of December 31, 2019, there were no mortgage loans that had a valuation allowance. As of December 31, 2018, the carrying value of mortgage loans that had a valuation allowance was $23. There were no mortgage loans held-for-sale as of both December 31, 2019 and December 31, 2018. As of December 31, 2019, the Company had no mortgage loans that have had extensions or restructurings other than what is allowable under the original terms of the contract.

The following table presents the activity within the Company’s valuation allowance for mortgage loans. These loans have been evaluated both individually and collectively for impairment. Loans evaluated collectively for impairment are immaterial.

Valuation Allowance Activity

	For the years ended December 31,
	2019			2018			2017
Balance as of January 1	$	(1	)	$	(1	)	$	—
Reversals/(Additions)	1			—			(1		)
Deductions	—			—			—
Balance as of December 31	$	—		$	(1	)	$	(1	)

The weighted-average LTV ratio of the Company’s mortgage loan portfolio was 52% as of December 31, 2019, while the weighted-average LTV ratio at origination of these loans was 61%. LTV ratios compare the loan amount to the value of the underlying property collateralizing the loan. The loan collateral values are updated no less than annually through reviews of the underlying properties. Factors considered in estimating property values include, among other things, actual and expected property cash flows, geographic market data and the ratio of the property's net operating income to its value. DSCR compares a property’s net operating income to the borrower’s principal and interest payments. As of December 31, 2019 and December 31, 2018, the Company held no delinquent commercial mortgages loan past due by 90 days or more.

Mortgage Loans Credit Quality

	December 31, 2019					December 31, 2018
Loan-to-value	Carrying Value			Avg. Debt-Service Coverage Ratio		Carrying Value			Avg. Debt-Service Coverage Ratio
65% - 80%	376			1.53x		386			1.60x
Less than 65%	3,839			2.56x		3,318			2.59x
Total mortgage loans	$	4,215		2.46x		$	3,704		2.49x

Mortgage Loans by Region

	December 31, 2019						December 31, 2018
	Carrying Value			Percent of Total			Carrying Value			Percent of Total
East North Central	$	270		6.4	%		$	250		6.8	%
Middle Atlantic	319			7.5	%		270			7.3	%
Mountain	109			2.6	%		30			0.8	%
New England	344			8.2	%		330			8.9	%
Pacific	906			21.5	%		917			24.8	%
South Atlantic	944			22.4	%		712			19.2	%
West North Central	46			1.1	%		148			4.0	%
West South Central	439			10.4	%		420			11.3	%
Other [1]	838			19.9	%		627			16.9	%
Total mortgage loans	$	4,215		100.0	%		$	3,704		100.0	%

[1]	Primarily represents loans collateralized by multiple properties in various regions.

Mortgage Loans by Property Type

	December 31, 2019						December 31, 2018
	Carrying Value			Percent of Total			Carrying Value			Percent of Total
Commercial
Industrial	1,167			27.7	%		1,108			29.9	%
Multifamily	1,313			31.2	%		1,138			30.7	%
Office	723			17.2	%		708			19.1	%
Retail	735			17.4	%		392			10.6	%
Single Family	137			3.2	%		82			2.2	%
Other	140			3.3	%		276			7.5	%
Total mortgage loans	$	4,215		100.0	%		$	3,704		100.0	%

Mortgage Servicing

The Company originates, sells and services commercial mortgage loans on behalf of third parties and recognizes servicing fee income over the period that services are performed. As of December 31, 2019, under this program, the Company serviced mortgage loans with a total outstanding principal of $6.4 billion, of which $3.5 billion was serviced on behalf of third parties and $2.9 billion was retained and reported in total investments on the Company's Consolidated Balance Sheets. As of December 31, 2018, the Company serviced mortgage loans with a total outstanding principal balance of $6.0 billion, of which $3.6 billion

F-38

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

was serviced on behalf of third parties and $2.4 billion was retained and reported in total investments on the Company's Consolidated Balance Sheets. Servicing rights are carried at the lower of cost or fair value and were $0 as of December 31, 2019 and 2018, because servicing fees were market-level fees at origination and remain adequate to compensate the Company for servicing the loans.

Variable Interest Entities

The Company is engaged with various special purpose entities and other entities that are deemed to be VIEs primarily as an investor through normal investment activities but also as an investment manager.

A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest, such as simple majority kick-out rights, or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Consolidated Financial Statements.

Consolidated VIEs

As of December 31, 2019 and 2018, the Company did not hold any securities for which it is the primary beneficiary.

Non-Consolidated VIEs

The Company, through normal investment activities, makes passive investments in limited partnerships and other alternative investments. For these non-consolidated VIEs, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments. The Company’s maximum exposure to loss as of December 31, 2019 and 2018 is limited to the total carrying value of $1.1 billion and $1.0 billion, respectively, which are included in limited partnerships and other alternative investments in the Company's Consolidated Balance Sheets. As of December 31, 2019 and 2018, the Company has outstanding commitments totaling $851 and $718, respectively, whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. These investments are generally of a passive nature in that the Company does not take an active role in management.

In addition, the Company makes passive investments in structured securities issued by VIEs for which the Company is not the manager. These investments are included in ABS, CLOs, CMBS and RMBS and are reported in fixed maturities, available-for-sale, and fixed maturities, FVO, in the Company’s Consolidated Balance Sheets. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the

principal amount of the structured securities issued by the VIEs, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits and the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment.

Securities Lending, Repurchase Agreements, and Other Collateral Transactions and Restricted Investments

The Company enters into securities financing transactions as a way to earn additional income or manage liquidity, primarily through securities lending and repurchase agreements.

Securities Lending and Repurchase Agreements
	December 31, 2019			December 31, 2018
	Fair Value			Fair Value
Securities Lending Transactions:
Gross amount of securities on loan	$	606		$	820
Gross amount of associated liability for collateral received [1]	$	621		$	840
Repurchase agreements:
Gross amount of recognized liabilities for repurchase agreements	$	—		$	72
Gross amount of collateral pledged related to repurchase agreements [2]	$	—		$	73
Gross amount of recognized receivables for reverse repurchase agreements	$	15		$	64

[1]	Cash collateral received is reinvested in fixed maturities, AFS and short term investments which are included in the Consolidated Balance Sheets. Amount includes additional securities collateral received of $34 and $3 which are excluded from the Company's Consolidated Balance Sheets as of December 31, 2019 and 2018*, respectively.*

[2]	Collateral pledged is included within fixed maturities, AFS and short term investments in the Company's Consolidated Balance Sheets.

Securities Lending

Under a securities lending program, the Company lends certain fixed maturities within the corporate, foreign government/government agencies, and municipal sectors as well as equity securities to qualifying third-party borrowers in return for collateral in the form of cash or securities. For domestic and non-domestic loaned securities, respectively, borrowers provide collateral of 102% and 105% of the fair value of the securities lent at the time of the loan. Borrowers will return the securities to the Company for cash or securities collateral at maturity dates generally of 90 days or less. Security collateral on deposit from counterparties in connection with securities lending transactions may not be sold or re-pledged, except in the event of default by the counterparty, and is not reflected on the Company’s Consolidated Balance Sheets. Additional collateral is obtained if the fair value of the collateral falls below 100% of the fair value of the loaned securities. The agreements are continuous and do not have stated maturity dates and provide the counterparty the

F-39

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

right to sell or re-pledge the securities loaned. If cash, rather than securities, is received as collateral, the cash is typically invested in short-term investments or fixed maturities and is reported as an asset on the Company's Consolidated Balance Sheets. Income associated with securities lending transactions is reported as a component of net investment income in the Company’s Consolidated Statements of Operations.

Repurchase Agreements

From time to time, the Company enters into repurchase agreements to manage liquidity or to earn incremental income. A repurchase agreement is a transaction in which one party (transferor) agrees to sell securities to another party (transferee) in return for cash (or securities), with a simultaneous agreement to repurchase the same securities at a specified price at a later date. The maturity of these transactions is generally ninety days or less. Repurchase agreements include master netting provisions that provide both parties the right to offset claims and apply securities held by them with respect to their obligations in the event of a default. Although the Company has the contractual right to offset claims, the Company's current positions do not meet the specific conditions for net presentation.

Under repurchase agreements, the Company transfers collateral of U.S. government and government agency securities and receives cash. For repurchase agreements, the Company obtains cash in an amount equal to at least 95% of the fair value of the securities transferred. The agreements require additional collateral to be transferred when necessary and provide the counterparty the right to sell or re-pledge the securities transferred. The cash received from the repurchase program is typically invested in short-term investments or fixed maturities and is reported as an asset on the Company's Consolidated Balance Sheets. The Company accounts for the repurchase agreements as collateralized borrowings. The securities transferred under repurchase agreements are included in fixed maturities, AFS with the obligation to repurchase those securities recorded in other liabilities on the Company's Consolidated Balance Sheets.

From time to time, the Company enters into reverse repurchase agreements where the Company purchases securities and simultaneously agrees to resell the same or substantially the same securities. The maturity of these transactions is generally within one year. The agreements require additional collateral to be transferred to the Company when necessary and the Company has the right to sell or re-pledge the securities received. The Company accounts for reverse repurchase agreements as collateralized financing. The receivable for reverse repurchase agreements is included within short-term investments in the Company's Consolidated Balance Sheets.

Other Collateral Transactions

As of December 31, 2019 and 2018, the Company pledged collateral of $37 and $47, respectively, of U.S. government securities and municipal securities or cash primarily related to certain bank loan participations committed to through a limited partnership agreement. These amounts also include collateral related to letters of credit.

For disclosure of collateral in support of derivative transactions, refer to the Derivative Collateral Arrangements section in Note 7 - Derivatives of Notes to Consolidated Financial Statements.

Other Restricted Investments

The Company is required by law to deposit securities with government agencies in certain states in which it conducts business. As of December 31, 2019 and 2018, the fair value of securities on deposit was $2.3 billion and $2.2 billion, respectively.

In addition, as of December 31, 2019, the Company held fixed maturities and short-term investments of $447 and $189, respectively, in a trust for the benefit of syndicate policyholders and other investments of $38 primarily consisting of overseas deposits in various countries with Lloyd's to support underwriting activities in those countries.

Equity Method Investments

The majority of the Company's investments in limited partnerships and other alternative investments, including hedge funds, real estate funds, and private equity funds (collectively, “limited partnerships”), are accounted for under the equity method of accounting. The remainder of investments in limited partnerships and other alternative investments consists of investments in insurer-owned life insurance accounted for at cash surrender value. The Company's investment in Hopmeadow Holdings LP is reported in other assets on the Company's Consolidated Balance Sheets and is accounted for under the equity method of accounting. For further discussion on Hopmeadow Holdings LP, see Note 21 - Business Dispositions and Discontinued Operations of Notes to the Consolidated Financial Statements.

The Company recognized total equity method income of $267, $214, and $168 for the periods ended December 31, 2019, 2018 and 2017, respectively. Equity method income is reported in net investment income, except amounts related to strategic investments classified in other assets which are reported in other revenues. For investments accounted for under the equity method, the Company’s maximum exposure to loss as of December 31, 2019 is limited to the total carrying value of $1.6 billion. In addition, the Company has outstanding commitments totaling $852 to fund limited partnership investments as of December 31, 2019. The Company’s investments accounted for under the equity method are generally of a passive nature in that the Company does not take an active role in the management.

In 2019, aggregate investment income from investments accounted for under the equity method exceeded 10% of the Company’s pre-tax consolidated net income (loss). Accordingly, the Company is disclosing aggregated, summarized financial data for the Company’s investments accounted for under the equity method. This aggregated, summarized financial data does not represent the Company’s proportionate share of investees' assets or earnings. Aggregate total assets of the investees totaled $329.4 billion and $311.0 billion as of December 31, 2019 and 2018, respectively. Aggregate total liabilities of the investees totaled $191.2 billion and $187.7 billion as of December 31, 2019 and 2018, respectively. Aggregate net investment income of the investees totaled $618, $773, and $1.9 billion for the periods ended December 31, 2019, 2018 and 2017, respectively. Aggregate net income excluding net investment income of the investees totaled $13.4 billion, $12.3 billion and $9.8 billion for the periods ended December 31, 2019, 2018 and 2017, respectively. As of, and for the period ended, December 31, 2019,

F-40

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

the aggregated summarized financial data reflects the latest available financial information.

7**.** DERIVATIVES

The Company utilizes a variety of OTC, OTC-cleared and exchange traded derivative instruments as a part of its overall risk management strategy as well as to enter into replication transactions. Derivative instruments are used to manage risk associated with interest rate, equity market, credit spread, issuer default, price, and currency exchange rate risk or volatility. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that are permissible investments under the Company’s investment policies.

Strategies that Qualify for Hedge Accounting

Some of the Company's derivatives satisfy hedge accounting requirements as outlined in Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements. Typically, these hedging instruments include interest rate swaps and, to a lesser extent, foreign currency swaps where the terms or expected cash flows of the hedged item closely match the terms of the swap. The interest rate swaps are typically used to manage interest rate duration of certain fixed maturity securities or debt instruments issued. The hedge strategies by hedge accounting designation include:

Cash Flow Hedges

Interest rate swaps are predominantly used to manage portfolio duration and better match cash receipts from assets with cash disbursements required to fund liabilities. These derivatives primarily convert interest receipts on floating-rate fixed maturity securities to fixed rates. The Company has also entered into interest rate swaps to convert the variable interest payments on 3 month LIBOR + 2.125% junior subordinated debt to fixed interest payments. For further information, see the Junior Subordinated Debentures section within Note 13 - Debt of Notes to Consolidated Financial Statements.

Foreign currency swaps are used to convert foreign currency-denominated cash flows related to certain investment receipts to U.S. dollars in order to reduce cash flow fluctuations due to changes in currency rates.

The Company also previously entered into forward starting swap agreements to hedge the interest rate exposure related to the future purchase of fixed-rate securities, primarily to hedge interest rate risk inherent in the assumptions used to price certain group benefits liabilities.

Non-qualifying Strategies

Derivative relationships that do not qualify for hedge accounting (“non-qualifying strategies”) primarily include hedging and replication strategies that utilize credit default swaps. In addition, hedges of interest rate, foreign currency and equity risk of certain fixed maturities and equities do not qualify for hedge accounting. The non-qualifying strategies include:

Credit Contracts

Credit default swaps are used to purchase credit protection on an individual entity or referenced index to economically hedge against default risk and credit-related changes in the value of fixed maturity securities. Credit default swaps are also used to assume credit risk related to an individual entity or referenced index as a part of replication transactions. These contracts require the Company to pay or receive a periodic fee in exchange for compensation from the counterparty should the referenced security issuers experience a credit event, as defined in the contract. In addition, the Company enters into credit default swaps to terminate existing credit default swaps, thereby offsetting the changes in value of the original swap going forward.

Interest Rate Swaps, Swaptions and Futures

The Company uses interest rate swaps, swaptions and futures to manage interest rate duration between assets and liabilities. In addition, the Company enters into interest rate swaps to terminate existing swaps, thereby offsetting the changes in value of the original swap going forward. As of December 31, 2019 and 2018, the notional amount of interest rate swaps in offsetting relationships was $7.6 billion and $7.1 billion, respectively.

Foreign Currency Swaps and Forwards

The Company enters into foreign currency swaps to convert the foreign currency exposures of certain foreign currency-denominated fixed maturity investments to U.S. dollars. The Company may at times enter into foreign currency forwards to hedge non-U.S. dollar denominated cash and, previously, equity securities. The Company previously entered into foreign currency forwards to hedge currency impacts on changes in equity of the U.K. property and casualty run-off subsidiaries that were sold in May 2017. For further information on the disposition, see Note 21 - Business Dispositions and Discontinued Operations of Notes to Consolidated Financial Statements.

Equity Index Options

The Company enters into equity index options to hedge the impact of a decline in the equity markets on the investment portfolio. The Company also enters into covered call options on equity securities to generate additional return.

Contingent Capital Facility Put Option

The Company previously entered into a put option agreement that provided the Company the right to require a third-party trust to purchase, at any time, The Hartford’s junior subordinated notes in a maximum aggregate principal amount of $500. On February 8, 2017, The Hartford exercised the put option resulting in the issuance of $500 in junior subordinated notes with proceeds received on February 15, 2017. Under the put option agreement, The Hartford had been paying premiums on a periodic basis and had agreed to reimburse the trust for certain fees and ordinary expenses.

F-41

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Derivative Balance Sheet Classification

For reporting purposes, the Company has elected to offset within assets or liabilities based upon the net of the fair value amounts, income accruals, and related cash collateral receivables and payables of OTC derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset. The following fair value amounts do not include income

accruals or related cash collateral receivables and payables, which are netted with derivative fair value amounts to determine balance sheet presentation. The Company’s derivative instruments are held for risk management purposes, unless otherwise noted in the following table. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and is presented in the table to quantify the volume of the Company’s derivative activity. Notional amounts are not necessarily reflective of credit risk.

Derivative Balance Sheet Presentation

	Net Derivatives												Asset Derivatives						Liability Derivatives
	Notional Amount						Fair Value						Fair Value						Fair Value
Hedge Designation/ Derivative Type	Dec 31, 2019			Dec 31, 2018			Dec 31, 2019			Dec 31, 2018			Dec 31, 2019			Dec 31, 2018			Dec 31, 2019			Dec 31, 2018
Cash flow hedges
Interest rate swaps	$	2,040		$	2,040		$	—		$	1		$	1		$	2		$	(1	)	$	(1	)
Foreign currency swaps	270			153			(1		)	(6		)	3			2			(4		)	(8		)
Total cash flow hedges	2,310			2,193			(1		)	(5		)	4			4			(5		)	(9		)
Non-qualifying strategies
Interest rate contracts
Interest rate swaps and futures	9,338			8,451			(59		)	(62		)	3			8			(62		)	(70		)
Foreign exchange contracts
Foreign currency swaps and forwards	464			287			(1		)	(1		)	—			—			(1		)	(1		)
Credit contracts
Credit derivatives that purchase credit protection	124			6			(3		)	—			—			—			(3		)	—
Credit derivatives that assume credit risk [1]	500			1,102			13			3			13			8			—			(5		)
Credit derivatives in offsetting positions	29			41			—			—			5			6			(5		)	(6		)
Equity contracts
Equity index swaps and options	941			211			(15		)	4			15			5			(30		)	(1		)
Total non-qualifying strategies	11,396			10,098			(65		)	(56		)	36			27			(101		)	(83		)
Total cash flow hedges and non-qualifying strategies	$	13,706		$	12,291		$	(66	)	$	(61	)	$	40		$	31		$	(106	)	$	(92	)
Balance Sheet Location
Fixed maturities, available-for-sale	$	244		$	153		$	—		$	—		$	—		$	—		$	—		$	—
Other investments	1,277			9,864			12			7			13			23			(1		)	(16		)
Other liabilities	12,185			2,274			(78		)	(68		)	27			8			(105		)	(76		)
Total derivatives	$	13,706		$	12,291		$	(66	)	$	(61	)	$	40		$	31		$	(106	)	$	(92	)

[1]	The derivative instruments related to this strategy are held for other investment purposes.

Offsetting of Derivative Assets/Liabilities

The following tables present the gross fair value amounts, the amounts offset, and net position of derivative instruments eligible for offset in the Company's Consolidated Balance Sheets. Amounts offset include fair value amounts, income accruals and related cash collateral receivables and payables associated with derivative instruments that are traded under a common master

netting agreement, as described in the preceding discussion. Also included in the tables are financial collateral receivables and payables, which are contractually permitted to be offset upon an event of default, although are disallowed for offsetting under U.S. GAAP.

F-42

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Offsetting Derivative Assets and Liabilities

	(i)			(ii)			(iii) = (i) - (ii)						(iv)			(v) = (iii) - (iv)
							Net Amounts Presented in the Statement of Financial Position						Collateral Disallowed for Offset in the Statement of Financial Position
	Gross Amounts of Recognized Assets (Liabilities)			Gross Amounts Offset in the Statement of Financial Position			Derivative Assets [1] (Liabilities) [2]			Accrued Interest and Cash Collateral (Received) [3] Pledged [2]			Financial Collateral (Received) Pledged [4]			Net Amount
As of December 31, 2019
Other investments	$	40		$	37		$	12		$	(9	)	$	1		$	2
Other liabilities	$	(106	)	$	(23	)	$	(78	)	$	(5	)	$	(73	)	$	(10	)
As of December 31, 2018
Other investments	$	31		$	26		$	7		$	(2	)	$	2		$	3
Other liabilities	$	(92	)	$	(20	)	$	(68	)	$	(4	)	$	(65	)	$	(7	)

[1]	Included in other investments in the Company's Consolidated Balance Sheets.

[2]	Included in other liabilities in the Company's Consolidated Balance Sheets and is limited to the net derivative payable associated with each counterparty.

[3]	Included in other investments in the Company's Consolidated Balance Sheets and is limited to the net derivative receivable associated with each counterparty.

[4]	Excludes collateral associated with exchange-traded derivative instruments.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a

component of OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Gain (Loss) Recognized in OCI
	Year Ended December 31,
	2019			2018			2017
Interest rate swaps	$	18		$	5		$	8
Foreign currency swaps	8			7			(14		)
Total	$	26		$	12		$	(6	)

Gain (Loss) Reclassified from AOCI into Income
	Year Ended December 31,
	2019										2018										2017
	Net Realized Capital Gain/(Loss)			Net Investment Income			Interest Expense				Net Realized Capital Gain/(Loss)			Net Investment Income			Interest Expense				Net Realized Capital Gain/(Loss)			Net Investment Income			Interest Expense
Interest rate swaps	$	2		$	4		$	1			$	6		$	30		$	—			$	5		$	37		$	—
Foreign currency swaps	—			3			—				—			—			—				—			—			—
Total	$	2		$	7		$	1			$	6		$	30		$	—			$	5		$	37		$	—
Total amounts presented on the Consolidated Statement of Operations	$	395		$	1,951		$	259			$	(112	)	$	1,780		$	298			$	165		$	1,603		$	316

As of December 31, 2019, the before tax deferred net gains on derivative instruments recorded in AOCI that are expected to be reclassified to earnings during the next twelve months are $16. This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities that will occur over the next twelve months, at which time the Company will recognize the deferred net gains (losses) as an adjustment to net investment income over the term of the investment cash flows.

During the years ended December 31, 2019, 2018, and 2017, the Company had no net reclassifications from AOCI to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring.

F-43

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Non-Qualifying Strategies

For non-qualifying strategies, including embedded derivatives that are required to be bifurcated from their host contracts and

accounted for as derivatives, the gain or loss on the derivative is recognized currently in earnings within net realized capital gains (losses).

Non-Qualifying Strategies Recognized within Net Realized Capital Gains (Losses)

	For the Year Ended December 31,
	2019			2018			2017
Interest rate contracts
Interest rate swaps, swaptions and futures	(35		)	(3		)	(5		)
Credit contracts
Credit derivatives that purchase credit protection	(5		)	—			28
Credit derivatives that assume credit risk	32			(14		)	(7		)
Equity contracts
Equity options	(17		)	2			(7		)
Foreign exchange contracts
Foreign currency swaps and forwards	1			3			(14		)
Other
Contingent capital facility put option	—			—			(1		)
Total [1]	$	(24	)	$	(12	)	$	(6	)

[1]	Excludes investments that contain an embedded credit derivative for which the Company has elected the fair value option. For further discussion, see the Fair Value Option section in Note 5 - Fair Value Measurements of Notes to Consolidated Financial Statements.

Credit Risk Assumed through Credit Derivatives

The Company enters into credit default swaps that assume credit risk of a single entity or referenced index in order to synthetically replicate investment transactions that are permissible under the Company's investment policies. The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event. A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security

issuer’s debt obligation after the occurrence of the credit event. A credit event is generally defined as a default on contractually obligated interest or principal payments or bankruptcy of the referenced entity. The credit default swaps in which the Company assumes credit risk primarily reference investment grade single corporate issuers and baskets, which include standard diversified portfolios of corporate and CMBS issuers. The diversified portfolios of corporate issuers are established within sector concentration limits and may be divided into tranches that possess different credit ratings.

F-44

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Credit Risk Assumed Derivatives by Type

									Underlying Referenced Credit Obligation(s) [1]
	Notional Amount [2]			Fair Value			Weighted Average Years to Maturity		Type	Average Credit Rating	Offsetting Notional Amount [3]			Offsetting Fair Value [3]
As of December 31, 2019
Single name credit default swaps
Investment grade risk exposure	$	100		$	3		5 years		Corporate Credit	A-	$	—		$	—
Basket credit default swaps [4]
Investment grade risk exposure	400			10			5 years		Corporate Credit	BBB+	—			—
Investment grade risk exposure	1			—			Less than 1 year		CMBS Credit	A	1			—
Below investment grade risk exposure	14			(5		)	Less than 1 year		CMBS Credit	CCC-	14			5
Total [5]	$	515		$	8						$	15		$	5
As of December 31, 2018
Single name credit default swaps
Investment grade risk exposure	$	169		$	2		4 years		Corporate Credit/ Foreign Gov.	A	$	—		$	—
Basket credit default swaps [4]
Investment grade risk exposure	799			(1		)	6 years		Corporate Credit	BBB+	—			—
Below investment grade risk exposure	125			2			5 years		Corporate Credit	B+	—			—
Investment grade risk exposure	11			—			5 years		CMBS Credit	A-	2			—
Below investment grade risk exposure	19			(6		)	Less than 1 year		CMBS Credit	CCC	19			6
Total [5]	$	1,123		$	(3	)					$	21		$	6

[1]	The average credit ratings are based on availability and are generally the midpoint of the available ratings among Moody’s, S&P, and Fitch. If no rating is available from a rating agency, then an internally developed rating is used.

[2]	Notional amount is equal to the maximum potential future loss amount. These derivatives are governed by agreements and applicable law which include collateral posting requirements. There is no additional specific collateral related to these contracts or recourse provisions included in the contracts to offset losses.

[3]	The Company has entered into offsetting credit default swaps to terminate certain existing credit default swaps, thereby offsetting the future changes in value of, or losses paid related to, the original swap.

[4]	Comprised of swaps of standard market indices of diversified portfolios of corporate and CMBS issuers referenced through credit default swaps. These swaps are subsequently valued based upon the observable standard market index.

[5]	Excludes investments that contain an embedded credit derivative for which the Company has elected the fair value option. For further discussion, see the Fair Value Option section in Note 5 - Fair Value Measurements*. of Notes to Consolidated Financial Statements.*

Derivative Collateral Arrangements

The Company enters into various collateral arrangements in connection with its derivative instruments, which require both the pledging and accepting of collateral. As of December 31, 2019 and 2018, the Company pledged cash collateral with a fair value of less than $1 and $4 associated with derivative instruments. The collateral receivable has been recorded in other assets or other liabilities on the Company's Consolidated Balance Sheets as determined by the Company's election to offset on the balance sheet. As of December 31, 2019 and 2018, the Company also pledged securities collateral associated with derivative instruments with a fair value of $78 and $67, respectively, which have been included in fixed maturities on the Consolidated Balance Sheets. The counterparties generally have the right to sell or re-pledge these securities.

In addition, as of December 31, 2019 and 2018 , the Company has pledged initial margin of securities related to OTC-cleared and exchange traded derivatives with a fair value of $88 and $89, respectively, which are included within fixed maturities on the Company's Consolidated Balance Sheets.

As of December 31, 2019 and 2018, the Company accepted cash collateral associated with derivative instruments of $16 and $9, respectively, which was invested and recorded in the Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other investments or other liabilities as determined by the Company's election to offset on the balance sheet. The Company also accepted securities collateral as of December 31, 2019 and 2018 with a fair value of $1 and $5, respectively, which the Company has the ability to sell or repledge. As of December 31, 2019 and 2018, the Company had no repledged securities and no securities held as collateral have been sold. In addition, as of December 31, 2019 and 2018, non-cash collateral accepted was held in separate

F-45

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

custodial accounts and was not included in the Company’s Consolidated Balance Sheets.

8**.** REINSURANCE

The Company cedes insurance risk to reinsurers to enable the Company to manage capital and risk exposure. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company's procedures include carefully selecting its reinsurers, structuring agreements to provide collateral funds where necessary, and regularly monitoring the financial condition and ratings of its reinsurers.

The Company has two adverse development cover (“ADC”) reinsurance agreements in place, both of which are accounted for as retroactive reinsurance. One agreement covers substantially all asbestos and environmental ("A&E") reserve development for 2016 and prior accident years ("A&E ADC") and the Navigators ADC covers substantially all reserve development of Navigators Insurance Company and certain of its affiliates for 2018 and prior accident years. For more information on ADC agreements, see Note 1 -Basis of Presentation and Significant Accounting Policies, and Note 11 -Reserve for Unpaid Losses and Loss Adjustment Expenses.

Property and Casualty ceded losses, which reduce losses and loss adjustment expenses incurred, were $826, $661 and $901 for the years ended December 31, 2019, 2018 and 2017, respectively.

Group Benefits ceded losses, which reduce losses and loss adjustment expenses incurred, were $73, $116 and $120 for the years ended December 31, 2019, 2018 and 2017, respectively.

Reinsurance Recoverables

Reinsurance recoverables include balances due from reinsurance companies and are presented net of an allowance for uncollectible reinsurance. Reinsurance recoverables include an estimate of the amount of gross losses and loss adjustment expense reserves that may be ceded under the terms of the reinsurance agreements, including incurred but not reported unpaid losses. The Company’s estimate of losses and loss adjustment expense reserves ceded to reinsurers is based on assumptions that are consistent with those used in establishing the gross reserves for amounts the Company owes to its claimants. The Company estimates its ceded reinsurance recoverables based on the terms of any applicable facultative and treaty reinsurance, including an estimate of how incurred but not reported losses will ultimately be ceded under reinsurance agreements. Accordingly, the Company’s estimate of reinsurance recoverables is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and loss adjustment expenses.

Reinsurance Recoverables

	As of
	December 31, 2019			December 31, 2018
Property and Casualty Insurance Products
Paid loss and loss adjustment expenses	$	249		$	127
Unpaid loss and loss adjustment expenses	4,819			3,773
Gross reinsurance recoverables	5,068			3,900
Allowance for uncollectible reinsurance	(114		)	(126		)
Net P&C reinsurance recoverables	4,954			3,774
Group Benefits net reinsurance recoverables [1]	253			251
Recoverable related to reserves in Corporate [1]	320			332
Reinsurance recoverables, net	$	5,527		$	4,357

[1]	No allowance for uncollectible reinsurance was required as of December 31, 2019 and 2018*.*

The allowance for uncollectible reinsurance reflects management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay. The Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between reinsurers and cedants and the overall credit quality of the Company’s reinsurers. Based on this analysis, the Company may adjust the allowance for uncollectible reinsurance or charge off reinsurer balances that are determined to be uncollectible. Where its contracts permit, the Company secures future claim

obligations with various forms of collateral, including irrevocable letters of credit, secured trusts, funds held accounts and group-wide offsets.

Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables become due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarter or annual period.

F-46

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Insurance Revenues

Property and Casualty Insurance Revenue

	For the years ended December 31,
Premiums Written	2019			2018			2017
Direct	$	12,190		$	10,784		$	10,865
Assumed	371			217			223
Ceded	(978		)	(593		)	(571		)
Net	$	11,583		$	10,408		$	10,517
Premiums Earned
Direct	$	12,010		$	10,824		$	10,923
Assumed	416			221			232
Ceded	(936		)	(599		)	(600		)
Net	$	11,490		$	10,446		$	10,555

Group Benefits Revenue

	For the years ended December 31,
	2019			2018			2017
Gross earned premiums, fees and other considerations	$	4,122		$	3,615		$	3,281
Reinsurance assumed	1,572			2,044			446
Reinsurance ceded	(91		)	(61		)	(50		)
Net earned premiums, fees and other considerations	$	5,603		$	5,598		$	3,677

For its group benefits products, the Company reinsures certain of its risks to other reinsurers under yearly renewable term and coinsurance arrangements and variations thereto. Yearly renewable term and coinsurance arrangements result in passing a portion of the risk to the reinsurer. Generally, the reinsurer receives a proportionate amount of the premiums less an allowance for commissions and expenses and is liable for a corresponding proportionate amount of all benefit payments. The increase in premiums assumed from 2017 to 2018 was primarily

due to premiums related to Aetna's U.S. group life and disability business acquired by the Company effective November 1, 2017 whereby Aetna is fronting the business for a period of time. As that business is re-written through Hartford writing companies, the amount of assumed reinsurance for Group Benefits will decrease and gross premium written on a direct basis will increase.

9**.** DEFERRED POLICY ACQUISITION COSTS

Changes in DAC

	For the years ended December 31,
	2019			2018			2017
Balance, beginning of period	$	670		$	650		$	645
Deferred costs	1,635			1,404			1,377
Amortization — DAC	(1,622		)	(1,384		)	(1,372		)
Add back amortization of value of business acquired [1]	102			—			—
Balance, end of period	$	785		$	670		$	650

[1]	While the value of in-force contracts acquired from the Navigators Group acquisition is included in other intangible assets, the amortization of that asset is recorded as DAC amortization.

F-47

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

10**.** GOODWILL & OTHER INTANGIBLE ASSETS

Goodwill Carrying Value as of December 31, 2019

	Commercial Lines			Personal Lines			Hartford Funds			Group Benefits			Corporate [1]			Total
Balance at December 31, 2017	$	38		$	119		$	180		$	723		$	230		$	1,290
Goodwill related to acquisitions	—			—			—			—			—			—
Balance at December 31, 2018	$	38		$	119		$	180		$	723		$	230		$	1,290
Goodwill related to acquisitions [2]	623			—			—			—			—			623
Balance at December 31, 2019	$	661		$	119		$	180		$	723		$	230		$	1,913

[1]	The Corporate category includes goodwill that was acquired at a holding company level and not pushed down to a subsidiary within a reportable segment. Carrying value of goodwill within Corporate as of December 31, 2019, 2018, and 2017 includes $138 and $92 for the Group Benefits and Hartford Funds reporting units, respectively.

[2]	For further discussion on goodwill related to the acquisition of Navigators Group, refer to Note 2 - Business Acquisitions of Notes to Consolidated Financial Statements.

The annual goodwill assessment for The Hartford's reporting units was completed as of October 31, 2019, 2018, and 2017, which resulted in no write-downs of goodwill in the respective

years then ended. In 2019, all reporting units passed the first step of their annual impairment test with a significant margin.

Other Intangible Assets

	As of December 31, 2019										As of December 31, 2018
	Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount				Gross Carrying Amount			Accumulated Amortization			Net Carrying Amount
Amortized Intangible Assets:
Value of in-force contracts [1]	$	203		$	(125	)	$	78			$	23		$	(23	)	$	—
Customer relationships [2]	636			(92		)	544				636			(49		)	587
Marketing agreement with Aetna	16			(2		)	14				16			(1		)	15
Distribution Agreement	79			(61		)	18				79			(56		)	23
Distribution and Agency relationships & Other [3] [4]	340			(19		)	321				21			(3		)	18
Total Finite Life Intangibles	1,274			(299		)	975				775			(132		)	643
Total Indefinite Life Intangible Assets [5]	95			—			95				14			—			14
Total Other Intangible Assets	$	1,369		$	(299	)	$	1,070			$	789		$	(132	)	$	657

[1]	On May 23, 2019, the Company acquired Navigators Group and recorded a value of in-force-contracts intangible asset of $180 which will be amortized over 3 years*. For further discussion on the value of in-force-contracts related to the acquisition of Navigators Group, refer to Note* 2 - Business Acquisitions of Notes to Consolidated Financial Statements.

[2]	On February 16, 2018, The Company entered into a renewal rights agreement with Farmers Exchanges of the Farmers Group of Companies to acquire its Foremost-branded small commercial business sold through independent agents. In connection with the renewal rights agreement, the Company recorded a customer relationships intangible asset of $46 which will be amortized over 10 years.

[3]	On December 1, 2018, the Company acquired Y-Risk LLC and recorded an agency relationships intangible asset of $12 which will be amortized over 15 years.

[4]

On May 23, 2019, the Company acquired Navigators Group and recorded other intangible assets of $302 for distribution relationships and $17 for the trade name. The distribution relationships and trade name will be amortized over 15 years and 10 years*, respectively. For further discussion on the value of distribution relationships and trade name related to the acquisition of Navigators Group, refer to Note* 2 - Business Acquisitions of Notes to Consolidated Financial Statements.

[5]

On May 23, 2019, the Company acquired Navigators Group and recorded an indefinite life intangible asset of $66 related to the capacity to write business through its Lloyd's Syndicate and recorded an indefinite life intangible of $15 for licenses . For further discussion on the indefinite life intangible assets related to the acquisition of Navigators Group, refer to Note 2 - Business Acquisitions of Notes to Consolidated Financial Statements.

F-48

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Expected Pre-tax Amortization Expense [1] for Acquired Intangibles as of December 31, 2019

	Value of In-force Contracts			Other Intangible Assets
2020	$	47		$	74
2021	$	21		$	74
2022	$	10		$	74
2023	$	—		$	74
2024	$	—		$	74

[1]	In the Consolidated Statements of Operations, the amortization of value of in-force contracts is reported in amortization of deferred policy acquisition costs and the amortization of other intangible assets is reported in amortization of other intangible assets.

11**.** RESERVE FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

Property and Casualty Insurance Products

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

	For the years ended December 31,
	2019			2018			2017
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	24,584		$	23,775		$	22,545
Reinsurance and other recoverables	4,232			3,957			3,488
Beginning liabilities for unpaid losses and loss adjustment expenses, net	20,352			19,818			19,057
Navigators Group acquisition	2,001			—			—
Provision for unpaid losses and loss adjustment expenses
Current accident year	7,463			7,107			7,381
Prior accident year development [1]	(65		)	(167		)	(41		)
Total provision for unpaid losses and loss adjustment expenses	7,398			6,940			7,340
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	(16		)	—			—
Payments
Current accident year	(2,374		)	(2,452		)	(2,751		)
Prior accident years	(4,374		)	(3,954		)	(3,828		)
Total payments	(6,748		)	(6,406		)	(6,579		)
Foreign currency adjustment	(1		)	—			—
Ending liabilities for unpaid losses and loss adjustment expenses, net	22,986			20,352			19,818
Reinsurance and other recoverables	5,275			4,232			3,957
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	28,261		$	24,584		$	23,775

[1]	Prior accident year development does not include the benefit of a portion of losses ceded under the Navigators ADC which, under retroactive reinsurance accounting, is deferred and is recognized over the period the ceded losses are recovered in cash from NICO . For additional information regarding the Navigators ADC agreement, please refer to Adverse Development Covers discussion below.

F-49

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Property and Casualty Insurance Products Reserves, Net of Reinsurance, that are Discounted

	For the years ended December 31,
	2019						2018						2017
Liability for unpaid losses and loss adjustment expenses, at undiscounted amounts	$	1,331					$	1,331					$	1,387
Amount of discount	388						388						410
Carrying value of liability for unpaid losses and loss adjustment expenses	$	943					$	943					$	977
Discount accretion included in losses and loss adjustment expenses	$	33					$	40					$	30
Weighted average discount rate	2.91					%	2.98					%	3.06					%
Range of discount rates	1.76		%	-	14.03	%	1.77		%	-	14.15	%	1.77		%	-	14.15	%

The current accident year benefit from discounting property and casualty insurance product reserves was $33 in 2019, $12 in 2018 and $15 in 2017. Reserves are discounted at rates in effect at the time claims were incurred, ranging from 1.76% for accident year 2012 to 14.03% for accident year 1981.

The reserves recorded for the Company’s property and casualty insurance products at December 31, 2019 represent the Company’s best estimate of its ultimate liability for losses and loss adjustment expenses related to losses covered by policies written by the Company. However, because of the significant uncertainties surrounding reserves it is possible that management’s estimate of the ultimate liabilities for these claims may change and that the required adjustment to recorded reserves could exceed the currently recorded reserves by an amount that could be material to the Company’s results of operations or cash flows.

Losses and loss adjustment expenses are also impacted by trends including frequency and severity as well as changes in the legislative and regulatory environment. In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty in the ultimate settlement of the liabilities gross of reinsurance include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. In the case of the reserves for environmental exposures before reinsurance, factors contributing to the high degree of uncertainty in gross reserves include expanding theories of liabilities and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured.

(Favorable) Unfavorable Prior Accident Year Development

	For the years ended December 31,
	2019			2018			2017
Workers’ compensation	$	(120	)	$	(164	)	$	(79	)
Workers’ compensation discount accretion	33			40			28
General liability	61			52			11
Marine	8			—			—
Package business	(47		)	(26		)	(25		)
Commercial property	(11		)	(12		)	(8		)
Professional liability	29			(12		)	1
Bond	(3		)	2			32
Assumed Reinsurance	3			—			—
Automobile liability - Commercial Lines	27			(15		)	17
Automobile liability - Personal Lines	(38		)	(18		)	—
Homeowners	3			(25		)	(14		)
Net asbestos reserves	—			—			—
Net environmental reserves	—			—			—
Catastrophes	(42		)	(49		)	(16		)
Uncollectible reinsurance	(30		)	22			(15		)
Other reserve re-estimates, net	46			38			27
Total prior accident year development, including full benefit for the ADC cession	(81		)	(167		)	(41		)
Change in deferred gain on retroactive reinsurance included in other liabilities	16			—			—
Total prior accident year development	$	(65	)	$	(167	)	$	(41	)

2019 re-estimates of prior accident year reserves

Workers’ compensation reserves were reduced, principally in small commercial driven by lower than previously estimated claim severity for the 2014 through 2017 accident years and, to a lesser extent, in national accounts due to lower estimated claim severity, primarily for accident years 2013 and prior.

General liability reserves were increased, primarily due to reserve increases in small commercial for accident years 2017 and 2018 due to higher frequency of high-severity bodily injury

F-50

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

claims, reserve increases in middle & large commercial for accident years 2015 to 2018 due to higher estimated severity, as well as increased estimated severity on the acquired Navigators Group book of business related to U.S. construction, premises liability, products liability and excess casualty, mostly related to accident years 2014 to 2017. In addition, an increase in reserves for mass torts for 2009 and prior accident years was offset by a decrease in reserves for extra contractual liability claims for more recent accident years, including the 2018 accident year.

Marine reserves were increased, principally related to pollution exposure from the 1980s and 1990s related to the Navigators Group book of business.

Package business reserves were decreased, primarily due to favorable emergence on property claims related to accident years 2016 through 2018 and due to favorable development of loss adjustment expenses on general liability claims for 2017 and prior accident years.

Commercial property reserves were decreased, principally due to favorable emergence of reported losses, including on the acquired Navigators Group book of business, related to offshore energy in accident years 2017 to 2018 and construction engineering across accident years 2015 to 2018.

Professional liability reserves were increased, primarily due to increased securities litigation and large loss activity, including wrongful termination and discrimination claims, related to accident years 2017 and 2018 and increased estimated frequency and severity of directors’ and officers’ reserves on the Navigators Group book of business, principally for the 2014 to 2018 accident years. Partially offsetting the increase was a decrease in average severity on public company directors’ and officers’ claim reserves and errors and omissions claim reserves for accident years 2014 and prior.

Automobile liability reserves were decreased in Personal Lines and increased in Commercial Lines. The decrease in Personal Lines was due to the emergence of lower estimated severity in automobile liability for accident year 2017. The increase in Commercial Lines was due to higher estimated severity on national accounts, principally in accident years 2017 and 2018, and higher estimated severity for accident year 2018 in small commercial and middle market, partially offset by lower estimated severity for 2017 and prior accident years in small commercial and middle market.

Catastrophes reserves were reduced, primarily as a result of lower estimated net losses from 2017 hurricanes Harvey and Irma and the 2017 California wildfires. While gross loss reserve estimates for the 2018 California wildfires were also reduced, this was largely offset by a reduction in reinsurance recoverables resulting in very little change to estimated net losses from those wildfires.

In December, 2019, the judge overseeing the bankruptcy of PG&E Corporation and Pacific Gas and Electric Company (together, “PG&E”) approved an $11 billion settlement with insurers representing approximately 85 percent of insurance subrogation claims to resolve all such claims arising from the 2017 Northern California wildfires and 2018 Camp wildfire. The bankruptcy court has also approved PG&E’s settlement with individual wildfire claimants. Those settlements are subject to confirmation by the bankruptcy court of a chapter 11 plan of reorganization

("PG&E Plan") which implements the terms of the settlements. If the PG&E Plan is approved, certain of the Company’s insurance subsidiaries would be entitled to settlement payments of subrogation claims. Based on reserve estimates submitted with the subrogation request, the amount our subsidiaries could collect from PG&E, if any, would be approximately $300 to $325 but could be more or less than that amount depending on how the Company’s ultimate paid claims subject to subrogation compare to other insurers’ ultimate paid claims subject to subrogation. Confirmation of the PG&E Plan and amount of the Company’s ultimate subrogation recoveries from PG&E are subject to uncertainty, including but not limited to resolution of objections raised by the Governor of California and others.

Given the uncertainty about whether the PG&E Plan will be confirmed, the Company has not recognized a benefit from potential subrogation from PG&E and will evaluate in future periods when more information becomes known. In connection with the 2018 Camp wildfire, the Company has recognized a $12 reinsurance recoverable for losses incurred in excess of a $350 per occurrence retention. Under its 2018 property aggregate catastrophe treaty, the Company has recognized a reinsurance recoverable for aggregate catastrophe losses in excess of an $825 retention, with the recoverable currently estimated at $45. As such, the first $57 of subrogation recoveries would be offset by a $57 reduction in these reinsurance recoverables resulting in no net benefit to income.

Uncollectible reinsurance reserves were reduced due to higher than expected recoveries from reinsurers in older accident years.

Other reserve re-estimates, net, primarily represents an increase in unallocated loss adjustment expense ('ULAE") reserves in Property & Casualty Other Operations that was driven by an increase in gross asbestos and environmental reserves, as well as higher than anticipated ULAE costs in recent years, prompting an increase in the projected ULAE run rate.

2018 re-estimates of prior accident year reserves

Workers’ compensation reserves were reduced in small commercial and middle market, primarily for accident years 2014 and 2015, as claim severity has emerged favorably compared to previous reserve estimates. Also contributing was a reduction in estimated reserves for ULAE.

General liability reserves were increased, primarily due to an increase in reserves for higher hazard general liability exposures in middle market for accident years 2009 to 2017, partially offset by a decrease in reserves for other lines within middle market, including premises and operations, umbrella and products liability, principally for accident years 2015 and prior. Contributing to the increase in reserves for higher hazard general liability exposures was an increase in average claim severity, including from large losses and, in more recent accident years, an increase in claim frequency. Contributing to the reduction in reserves for other middle market lines were more favorable outcomes due to initiatives to reduce legal expenses. In addition, reserve increases for claims with lead paint exposure were offset by reserve decreases for other mass torts and extra-contractual liability claims.

F-51

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Package business reserves were reduced, primarily due to lower reserve estimates for both liability and property for accident years 2010 and prior, including a recovery of loss adjustment expenses for the 2005 accident year.

Commercial property reserves were reduced, driven by an increase in estimated reinsurance recoverables on middle market property losses from the 2017 accident year.

Professional liability reserves were reduced, principally for accident years 2014 and prior, for directors and officers liability claims principally due to a number of older claims closing with limited or no payment.

Automobile liability reserves were reduced, primarily driven by reduced estimates of loss adjustment expenses in small commercial for recent accident years and favorable development in personal automobile liability for accident years 2014 to 2017, principally due to lower severity, including with uninsured and underinsured motorist claims.

Homeowners reserves were reduced, primarily in accident years 2013 to 2017, driven by lower than expected severity across multiple perils.

Asbestos and environmental reserves were unchanged as $238 of adverse development arising from the fourth quarter 2018 comprehensive annual review was offset by a $238 recoverable from NICO. For additional information related to the adverse development cover with NICO, see Note 8 - Reinsurance and Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements.

Catastrophe reserves were reduced, primarily as a result of lower estimated net losses from 2017 catastrophes, principally related to hurricanes Harvey and Irma. Before reinsurance, estimated losses for 2017 catastrophe events decreased by $133, resulting in a decrease in reinsurance recoverables of $90 as the Company no longer expects to recover under the 2017 Property Aggregate reinsurance treaty as aggregate ultimate losses for 2017 catastrophe events are now projected to be less than $850.

Uncollectible reinsurance reserves were increased due to lower anticipated recoveries related to older accident years.

Other reserve re-estimates, net, primarily represents an increase in ULAE reserves in Property & Casualty Other Operations that was principally driven by an increase in expected claim handling costs associated with asbestos and environmental and mass tort claims.

2017 re-estimates of prior accident year reserves

Workers’ compensation reserves were reduced in small commercial and middle market, given the continued emergence of favorable frequency, primarily for accident years 2013 to 2015, as well as a reduction in estimated reserves for unallocated loss adjustment expenses, partially offset by strengthening reserves for captive programs within specialty commercial.

General liability reserves were increased for the 2013 to 2016 accident years on a class of business that insures service and maintenance contractors. This increase was partially offset by a decrease in recent accident year reserves for other middle market general liability reserves.

Package business reserves were reduced for accident years 2013 and prior largely due to reducing the Company’s estimate of allocated loss adjustment expenses incurred to settle the claims.

Bond business reserves increased for customs bonds written between 2000 and 2010 which was partly offset by a reduction in reserves for recent accident years as reported losses for commercial and contract surety have emerged favorably.

Automobile liability reserves within Commercial Lines were increased in small commercial and large national accounts for the 2013 to 2016 accident years, driven by higher frequency of more severe accidents, including litigated claims

Asbestos and environmental reserves were unchanged as $285 of adverse development arising from the fourth quarter 2017 comprehensive annual review was offset by a $285 recoverable from NICO. For additional information related to the adverse development cover with NICO, see Note 8 - Reinsurance and Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements.

Catastrophes reserves were reduced primarily due to lower estimates of 2016 wind and hail event losses and a decrease in losses on a 2015 wildfire.

Uncollectible reinsurance reserves decreased as a result of giving greater weight to favorable collectibility experience in recent calendar periods in estimating future collections.

Adverse Development Covers

The Company has an adverse development cover reinsurance agreement with NICO, a subsidiary of Berkshire Hathaway Inc., to reinsure loss development after 2016 on substantially all of the Company’s asbestos and environmental reserves (the “A&E ADC”). Under the A&E ADC, the Company paid a reinsurance premium of $650 for NICO to assume adverse net loss reserve development up to $1.5 billion above the Company’s existing net A&E reserves as of December 31, 2016 of approximately $1.7 billion including reserves for A&E exposure for accident years prior to 1986 that are reported in Property & Casualty Other Operations ("Run-off A&E") and reserves for A&E exposure for accident years 1986 and subsequent from policies underwritten prior to 2016 that are reported in ongoing Commercial Lines and Personal Lines. The $650 reinsurance premium was placed into a collateral trust account as security for NICO’s claim payment obligations to the Company. The Company has retained the risk of collection on amounts due from other third-party reinsurers and continues to be responsible for claims handling and other administrative services, subject to certain conditions. The A&E ADC covers substantially all the Company’s A&E reserve development up to the reinsurance limit.

Under retroactive reinsurance accounting, net adverse A&E reserve development after December 31, 2016 will result in an offsetting reinsurance recoverable up to the $1.5 billion limit. Cumulative ceded losses up to the $650 reinsurance premium

F-52

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

paid are recognized as a dollar-for-dollar offset to direct losses incurred. Cumulative ceded losses exceeding the $650 reinsurance premium paid would result in a deferred gain. The deferred gain would be recognized over the claim settlement period in the proportion of the amount of cumulative ceded losses collected from the reinsurer to the estimated ultimate reinsurance recoveries. Consequently, until periods when the deferred gain is recognized as a benefit to earnings, cumulative adverse development of asbestos and environmental claims after December 31, 2016 in excess of $650 may result in significant charges against earnings. As of December 31, 2019, the Company has incurred $640 in cumulative adverse development on asbestos and environmental reserves that have been ceded under the A&E ADC treaty with NICO.

Immediately after closing on the acquisition of Navigators Group, effective May 23, 2019, the Company purchased the Navigators ADC, an aggregate excess of loss reinsurance agreement covering adverse reserve development, from NICO on behalf of Navigators Insurers. Under the Navigators ADC, the Navigators Insurers paid

NICO a reinsurance premium of $91 in exchange for reinsurance coverage of $300 of adverse net loss reserve development that attaches $100 above the Navigators Insurers' existing net loss and allocated loss adjustment reserves as of December 31, 2018 subject to the treaty of $1.816 billion for accidents and losses prior to December 31, 2018.

As of December 31, 2019, the Company has recorded a reinsurance recoverable under the Navigators ADC of $107 as estimated ceded loss development on the 2018 and prior accident year reserves of $207 exceed the $100 deductible. While the reinsurance recoverable is $107, the Company has also recorded a $16 deferred gain within other liabilities since, under retroactive reinsurance accounting, ceded losses in excess of the $91 of ceded premium paid must be recognized as a deferred gain. As the Company has ceded $107 of the $300 available limit, there is $193 of remaining limit available as of December 31, 2019.

Reconciliation of Loss Development to Liability for Unpaid Losses and Loss Adjustment Expenses As of December 31, 2019

	Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance															Subtotal
Reserve Line	Cumulative Incurred for Accident Years Displayed in Triangles			Cumulative Paid for Accident Years Displayed in Triangles			Unpaid for Accident Years not Displayed in Triangles			Unpaid Unallocated Loss Adjustment Expenses, Net of Reinsurance			Discount			Unpaid Losses and Loss Adjustment Expenses, Net of Reinsurance			Reinsurance and Other Recoverables			Liability for Unpaid Losses and Loss Adjustment Expenses
Workers' compensation	$	18,990		$	(10,991	)	$	2,446		$	345		$	(372	)	$	10,418		$	2,093		$	12,511
General liability	5,711			(2,828		)	471			140			—			3,494			630			4,124
Marine	1,226			(974		)	19			8			—			279			135			414
Package business	6,817			(5,215		)	49			91			—			1,742			33			1,775
Commercial property	2,939			(2,520		)	29			13			—			461			162			623
Commercial automobile liability	3,698			(2,739		)	11			22			—			992			73			1,065
Commercial automobile physical damage	206			(194		)	3			—			—			15			(1		)	14
Professional liability	1,796			(863		)	86			31			—			1,050			549			1,599
Bond	637			(353		)	29			24			—			337			13			350
Assumed Reinsurance	1,005			(824		)	4			5			—			190			25			215
Personal automobile liability	11,985			(10,518		)	25			68			—			1,560			27			1,587
Personal automobile physical damage	1,531			(1,507		)	6			3			—			33			—			33
Homeowners	7,443			(6,958		)	4			38			—			527			41			568
Other ongoing business							231			—			(16		)	215			312			527
Asbestos and environmental [1]							1,147			—			—			1,147			1,219			2,366
Other operations [1]							375			151			—			526			(36		)	490
Total P&C	$	63,984		$	(46,484	)	$	4,935		$	939		$	(388	)	$	22,986		$	5,275		$	28,261

[1]

Asbestos and environmental and other operations include asbestos, environmental and other latent exposures not foreseen when coverages were written, including, but not limited to, potential liability for pharmaceutical products, silica, talcum powder, head injuries, lead paint, construction defects, molestation and other long-tail liabilities. These reserve lines do not have significant paid or incurred loss development for the most recent ten accident years and therefore do not have loss development displayed in triangles.

F-53

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The reserve lines in the above table and the loss triangles that follow represent the significant lines of business for which the Company regularly reviews the appropriateness of reserve levels. These reserve lines differ from the reserve lines reported on a statutory basis, as prescribed by the National Association of Insurance Commissioners ("NAIC"). The cumulative incurred losses displayed in the above table include the full reinsurance benefit of ceding $107 of losses to the Navigators ADC even though $16 of that benefit has been recorded as a deferred gain within other liabilities and recognized as a charge to earnings in 2019 within incurred loss and loss adjustment expenses included in the consolidated statement of operations. The $107 of Navigators Insurers losses ceded to the Navigators ADC included in the following triangles $28 for general liability, $25 for professional liability, $13 for assumed reinsurance, $12 for commercial auto, $9 for marine and $8 for commercial property and included $12 for older accident years and lines of business that are not in the following triangles.

The following loss triangles present historical loss development for incurred and paid claims by accident year, including loss development on Navigators Insurers reserves prior to and after the May 23, 2019 acquisition date. Because the loss triangles include pre-acquisition date changes in ultimate incurred loss estimates for Navigators Insurers’ reserves, changes in reserve development evident in the incurred loss triangles may differ from prior accident year development recorded by the Company as shown in the (Favorable) Unfavorable Prior Accident Year Development table above as that only includes changes in Navigators Insurers’ reserves post acquisition. In addition, the incurred losses triangles include reserve development on both catastrophe and non-catastrophe claims whereas the (Favorable) Unfavorable Prior Accident Year Development table above shows the total amount of catastrophe reserve development across all lines of business on a single line.

Triangles are limited to the number of years for which claims incurred typically remain outstanding, not exceeding ten years. Short-tail lines, which represent claims generally expected to be paid within a few years, have three years of claim development displayed. For marine, commercial property, professional liability and assumed reinsurance lines, the Company has provided eight years of claims development as data for earlier periods was not available for the Lloyds syndicate. IBNR reserves shown in loss triangles include reserve for incurred but not reported claims as well as reserves for expected development on reported claims. Incurred and cumulative paid losses in currencies other than the U.S. dollar have been converted into U.S. dollars using the exchange rates as of December 31, 2019.

F-54

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Workers' Compensation

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2010	$	1,560		$	1,775		$	1,814		$	1,858		$	1,857		$	1,882		$	1,881		$	1,878		$	1,892		$	1,888		$	221		156,802
2011				2,013			2,099			2,204			2,206			2,221			2,224			2,232			2,242			2,239			314			177,910
2012							2,185			2,207			2,207			2,181			2,168			2,169			2,154			2,146			350			171,341
2013										2,020			1,981			1,920			1,883			1,861			1,861			1,850			415			151,315
2014													1,869			1,838			1,789			1,761			1,713			1,692			477			126,104
2015																1,873			1,835			1,801			1,724			1,714			540			113,819
2016																			1,772			1,772			1,780			1,767			665			111,763
2017																						1,862			1,869			1,840			864			111,096
2018																									1,916			1,917			1,039			116,915
2019																												1,937			1,359			110,515
Total																												$	18,990

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019
2010	$	316		$	709		$	970		$	1,154		$	1,287		$	1,374		$	1,439		$	1,489		$	1,522		$	1,553
2011				371			841			1,156			1,368			1,518			1,622			1,690			1,746			1,786
2012							359			809			1,106			1,313			1,436			1,529			1,587			1,644
2013										304			675			917			1,071			1,175			1,260			1,304
2014													275			598			811			960			1,041			1,099
2015																261			576			778			909			1,004
2016																			255			579			779			908
2017																						261			575			778
2018																									283			624
2019																												291
Total																												$	10,991

F-55

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

General Liability

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2010	$	436		$	445		$	432		$	437		$	428		$	431		$	465		$	467		$	483		$	482		$	41		23,941
2011				431			420			408			405			404			416			417			426			420			48			22,310
2012							423			402			399			392			410			408			421			413			65			16,501
2013										455			442			456			484			488			502			505			77			13,643
2014													506			475			481			494			513			522			114			14,318
2015																556			560			554			594			633			141			15,088
2016																			613			583			607			633			254			15,984
2017																						626			614			613			359			15,039
2018																									692			669			516			15,368
2019																												821			744			11,628
Total																												$	5,711

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019
2010	$	20		$	68		$	149		$	230		$	284		$	327		$	387		$	409		$	418		$	427
2011				15			61			123			200			255			303			330			348			362
2012							13			55			101			170			233			280			305			323
2013										13			53			141			233			320			372			398
2014													15			42			130			214			304			358
2015																10			55			156			278			409
2016																			12			52			131			283
2017																						15			67			156
2018																									21			83
2019																												29
Total																												$	2,828

F-56

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Marine

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2012	$	195		$	219		$	179		$	168		$	163		$	163		$	167		$	163		$	—		6,766
2013				148			152			134			135			139			134			137			(2		)	6,601
2014							163			159			157			164			163			168			(1		)	7,093
2015										158			145			145			148			133			(8		)	10,038
2016													139			142			137			147			(3		)	12,959
2017																160			186			174			3			15,216
2018																			144			160			5			13,130
2019																						144			61			5,775
Total																						$	1,226

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012			2013			2014			2015			2016			2017			2018			2019
2012	$	50		$	101		$	125		$	139		$	148		$	152		$	154		$	158
2013				41			82			100			111			118			120			125
2014							40			80			116			130			150			156
2015										40			85			115			125			133
2016													35			80			106			122
2017																48			110			141
2018																			37			104
2019																						35
Total																						$	974

F-57

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Package Business

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2010	$	657		$	662		$	654		$	652		$	652		$	651		$	653		$	651		$	649		$	647		$	18		52,484
2011				810			792			790			800			808			814			813			812			807			26			61,045
2012							736			725			728			731			736			735			739			732			30			59,817
2013										579			565			573			585			586			592			586			32			43,556
2014													566			578			601			602			603			603			59			43,098
2015																582			588			585			583			588			69			41,965
2016																			655			638			632			625			118			43,672
2017																						695			702			692			192			45,836
2018																									719			724			241			43,026
2019																												813			392			36,824
Total																												$	6,817

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019
2010	$	270		$	414		$	487		$	539		$	570		$	601		$	613		$	618		$	625		$	627
2011				377			555			621			684			727			748			762			772			774
2012							286			486			560			616			652			673			687			694
2013										225			339			414			467			504			522			541
2014													226			345			416			468			507			525
2015																212			332			383			445			486
2016																			225			353			410			465
2017																						235			372			447
2018																									237			402
2019																												254
Total																												$	5,215

F-58

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Commercial Property

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2012	$	369		$	333		$	334		$	334		$	336		$	335		$	334		$	333		$	1		26,786
2013				268			252			253			252			249			248			247			—			21,601
2014							293			281			282			280			279			281			—			21,017
2015										298			301			302			301			305			1			21,005
2016													405			419			399			406			1			23,710
2017																577			515			455			21			24,235
2018																			450			436			38			21,460
2019																						476			93			18,634
Total																						$	2,939

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012			2013			2014			2015			2016			2017			2018			2019
2012	$	182		$	296		$	317		$	326		$	331		$	331		$	331		$	330
2013				161			223			238			243			242			244			245
2014							170			250			270			279			279			279
2015										179			257			284			296			301
2016													215			342			378			395
2017																229			378			412
2018																			188			344
2019																						214
Total																						$	2,520

F-59

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Commercial Automobile Liability

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2010	$	290		$	291		$	309		$	335		$	338		$	344		$	344		$	341		$	340		$	339		$	3		38,158
2011				272			310			356			356			366			365			363			362			363			6			39,298
2012							311			377			391			402			395			389			387			388			6			36,043
2013										311			318			334			341			340			339			335			11			32,228
2014													309			317			331			337			341			334			14			29,597
2015																308			358			372			356			356			18			28,487
2016																			385			393			390			391			44			29,036
2017																						372			383			379			76			26,089
2018																									349			396			153			24,016
2019																												417			291			22,455
Total																												$	3,698

Cumulative Paid Losses & Allocated Loss Adjustment Expense, Net of Reinsurance
	For the years ended December 31
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019
2010	$	60		$	132		$	199		$	266		$	305		$	315		$	324		$	330		$	334		$	335
2011				63			133			211			274			316			339			348			353			354
2012							65			143			234			307			346			359			372			376
2013										62			130			202			259			295			311			321
2014													59			131			197			252			299			309
2015																62			142			207			267			314
2016																			65			147			232			303
2017																						60			134			211
2018																									62			153
2019																												63
Total																												$	2,739

F-60

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Commercial Automobile Physical Damage

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2017			2018			2019			IBNR Reserves			Claims Reported
2017	$	85		$	81		$	81		$	3		24,325
2018				62			62			1			20,508
2019							63			2			18,626
Total							$	206

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2017			2018			2019
2017	$	74		$	79		$	78
2018				54			60
2019							56
Total							$	194

F-61

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Professional Liability

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Claims Made Year	2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2012	$	242		$	238		$	238		$	218		$	221		$	220		$	219		$	225		$	19		7,025
2013				207			195			187			174			173			173			171			24			5,970
2014							187			183			181			177			179			182			26			6,705
2015										164			174			179			190			213			51			7,171
2016													183			176			203			196			66			8,288
2017																205			203			231			103			9,224
2018																			247			280			155			9,517
2019																						298			252			7,396
Total																						$	1,796

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Claims Made Year	2012			2013			2014			2015			2016			2017			2018			2019
2012	$	17		$	67		$	100		$	139		$	154		$	168		$	172		$	175
2013				10			44			67			88			116			131			137
2014							7			38			74			107			130			135
2015										9			40			85			107			124
2016													8			51			88			111
2017																11			48			87
2018																			15			73
2019																						21
Total																						$	863

F-62

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Bond

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2010	$	72		$	76		$	82		$	81		$	75		$	71		$	72		$	92		$	73		$	72		$	6		2,674
2011				74			78			78			76			71			71			71			71			72			9			2,136
2012							71			70			61			55			49			49			45			48			13			1,723
2013										64			58			55			48			49			39			35			15			1,463
2014													71			67			66			67			59			59			12			1,383
2015																67			67			63			60			54			19			1,385
2016																			61			61			61			56			32			1,324
2017																						63			90			101			42			1,547
2018																									68			68			49			1,383
2019																												72			68			1,122
Total																												$	637

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019
2010	$	14		$	46		$	60		$	60		$	60		$	65		$	67		$	67		$	69		$	64
2011				12			40			52			57			58			60			60			60			61
2012							12			25			26			24			26			26			34			35
2013										3			9			17			19			19			19			20
2014													18			31			40			43			43			45
2015																9			20			24			31			34
2016																			2			12			15			20
2017																						5			46			55
2018																									6			16
2019																												3
Total																												$	353

F-63

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Assumed Reinsurance

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2012	$	107		$	99		$	93		$	88		$	115		$	120		$	119		$	121		$	—		1,424
2013				115			119			103			105			102			102			104			1			1,607
2014							119			142			122			118			115			116			1			1,654
2015										102			92			94			94			95			—			1,383
2016													88			91			98			100			3			1,434
2017																129			153			161			11			1,582
2018																			128			127			1			1,322
2019																						181			107			875
Total																						$	1,005

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2012			2013			2014			2015			2016			2017			2018			2019
2012	$	38		$	77		$	83		$	85		$	112		$	118		$	118		$	119
2013				53			83			91			98			100			101			103
2014							66			119			106			109			112			113
2015										42			64			77			83			91
2016													36			66			84			90
2017																44			116			135
2018																			25			111
2019																						62
Total																						$	824

F-64

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Personal Automobile Liability

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2010	$	1,346		$	1,321		$	1,293		$	1,287		$	1,282		$	1,275		$	1,265		$	1,265		$	1,264		$	1,265		$	3		248,948
2011				1,181			1,170			1,180			1,173			1,166			1,154			1,154			1,153			1,153			4			221,890
2012							1,141			1,149			1,146			1,142			1,133			1,130			1,130			1,130			6			210,757
2013										1,131			1,145			1,144			1,153			1,152			1,153			1,157			8			205,475
2014													1,146			1,153			1,198			1,200			1,199			1,202			11			208,983
2015																1,195			1,340			1,338			1,330			1,331			21			216,827
2016																			1,407			1,402			1,393			1,397			46			215,658
2017																						1,277			1,275			1,228			109			186,993
2018																									1,108			1,104			246			154,648
2019																												1,018			461			131,577
Total																												$	11,985

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019
2010	$	496		$	915		$	1,108		$	1,202		$	1,239		$	1,251		$	1,256		$	1,258		$	1,260		$	1,260
2011				447			826			1,006			1,088			1,126			1,140			1,145			1,146			1,146
2012							441			818			986			1,067			1,104			1,114			1,120			1,122
2013										442			816			1,002			1,091			1,121			1,135			1,142
2014													430			843			1,032			1,125			1,165			1,182
2015																475			935			1,142			1,243			1,292
2016																			505			968			1,188			1,308
2017																						441			836			1,033
2018																									359			710
2019																												323
Total																												$	10,518

F-65

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Personal Automobile Physical Damage

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2017			2018			2019			IBNR Reserves			Claims Reported
2017	$	598		$	588		$	588		$	(1	)	362,235
2018				509			498			7			305,031
2019							445			(11		)	262,866
Total							$	1,531

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2017			2018			2019
2017	$	574		$	591		$	589
2018				474			491
2019							427
Total							$	1,507

F-66

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Homeowners

Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2010	$	838		$	850		$	838		$	840		$	840		$	840		$	836		$	834		$	834		$	834		$	(1	)	161,597
2011				955			920			919			916			914			911			908			907			907			—			179,399
2012							774			741			741			741			739			738			738			738			1			142,845
2013										673			638			637			634			632			630			629			1			113,538
2014													710			707			702			700			698			698			(1		)	121,902
2015																690			703			690			684			684			2			119,944
2016																			669			673			663			658			4			119,646
2017																						866			889			884			41			124,189
2018																									903			910			60			101,985
2019																												501			107			78,068
Total																												$	7,443

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Accident Year	2010			2011			2012			2013			2014			2015			2016			2017			2018			2019
2010	$	599		$	789		$	815		$	825		$	829		$	832		$	833		$	833		$	834		$	835
2011				709			871			891			899			903			905			908			907			908
2012							547			696			719			727			731			734			735			736
2013										467			590			611			622			626			627			628
2014													526			663			684			691			695			697
2015																487			645			665			674			680
2016																			481			621			640			649
2017																						538			747			795
2018																									484			712
2019																												318
Total																												$	6,958

Property and casualty reserves, including IBNR reserves

The Company estimates ultimate losses and allocated loss adjustment expenses by accident year. IBNR represents the excess of estimated ultimate loss reserves over case reserves. The process to estimate ultimate losses and loss adjustment expenses is an integral part of the Company's reserve setting. Reserves for allocated and unallocated loss adjustment expenses are generally established separate from the reserves for losses.

Reserves for losses are set by line of business within the reporting segments. Case reserves are established by a claims handler on each individual claim and are adjusted as new information becomes known during the course of handling the claim. Lines of business for which reported losses emerge over a long period of time are referred to as long-tail lines of business. Lines of business for which reported losses emerge more quickly are

referred to as short-tail lines of business. The Company’s shortest tail lines of business are homeowners, commercial property and automobile physical damage. The longest tail lines of business include workers’ compensation, general liability and professional liability. For short-tail lines of business, emergence of paid loss and case reserves is credible and likely indicative of ultimate losses. For long-tail lines of business, emergence of paid losses and case reserves is less credible in the early periods after a given accident year and, accordingly, may not be indicative of ultimate losses.

The Company’s reserving actuaries regularly review reserves for both current and prior accident years using the most current claim data. A variety of actuarial methods and judgments are used for most lines of business to arrive at selections of estimated ultimate losses and loss adjustment expenses. The reserve selections incorporate input, as appropriate, from claims

F-67

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

personnel, pricing actuaries and operating management about reported loss cost trends and other factors that could affect the reserve estimates.

For both short-tail and long-tail lines of business, an expected loss ratio is used to record initial reserves. This expected loss ratio is determined by starting with the average loss ratio of recent prior accident years and adjusting that ratio for the effect of expected changes to earned pricing, loss frequency and severity, mix of business, ceded reinsurance and other factors. For short-tail lines, IBNR for the current accident year is initially recorded as the product of the expected loss ratio for the period, earned premium for the period and the proportion of losses expected to be reported in future calendar periods for the current accident period. For long-tailed lines, IBNR reserves for the current accident year are initially recorded as the product of the expected loss ratio for the period and the earned premium for the period, less reported losses for the period. For certain short-tailed lines of business, IBNR amounts in the above loss development triangles are negative due to anticipated salvage and subrogation recoveries on paid losses.

As losses for a given accident year emerge or develop in subsequent periods, reserving actuaries use other methods to estimate ultimate unpaid losses in addition to the expected loss ratio method. These primarily include paid and reported loss development methods, frequency/severity techniques and the Bornhuetter-Ferguson method (a combination of the expected loss ratio and paid development or reported development method). Within any one line of business, the methods that are given more weight vary based primarily on the maturity of the accident year, the mix of business and the particular internal and external influences impacting the claims experience or the methods. The output of the reserve reviews are reserve estimates that are referred to as the “actuarial indication”.

Paid development and reported development techniques are used for most lines of business though more weight is given to the reported development method for some of the long-tailed lines like general liability. In addition, for long-tailed lines of business, the Company relies on the expected loss ratio method for immature accident years. Frequency/severity techniques are used predominantly for professional liability and are also used for automobile liability. The Berquist-Sherman technique is also used

for automobile liability, marine and assumed reinsurance. For most lines, reserves for allocated loss adjustment expenses ("ALAE", or those expenses related to specific claims) are analyzed using paid development techniques and an analysis of the relationship between ALAE and loss payments. For most of the lines acquired through the Navigators Group book of business, loss and ALAE are reviewed on a combined basis. Reserves for ULAE are determined using the expected cost per claim year and the anticipated claim closure pattern as well as the ratio of paid ULAE to paid losses.

In the final step of the reserve review process, senior reserving actuaries and senior management apply their judgment to determine the appropriate level of reserves considering the actuarial indications and other factors not contemplated in the actuarial indications. Those factors include, but are not limited to, the assessed reliability of key loss trends and assumptions used in the current actuarial indications, the maturity of the accident year, pertinent trends observed over the recent past, the level of volatility within a particular line of business, and the improvement or deterioration of actuarial indications. The Company also considers the magnitude of the difference between the actuarial indication and the recorded reserves.

Cumulative number of reported claims

For most property and casualty lines, claim counts represent the number of claim features on a reported claim where a claim feature is each separate coverage for each claimant affected by the claim event. For example, one car accident that results in two bodily injury claims and one automobile damage liability claim would be counted as three claims within the personal automobile liability triangle. Similarly, a fire that impacts one commercial building may result in multiple claim features due to the potential for claims related to business interruption, structural damage, and loss of the physical contents of the building. Claim features that result in no paid losses are included in the reported claim counts. For some property and casualty lines, such as marine and assumed reinsurance, a claim count represents each reported claim regardless of the number of features. For assumed bordereau business and business written on binders, one claim count is posted for each bordereau received, which could account for multiple claims.

F-68

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
	(Unaudited)
Reserve Line	1st Year		2nd Year		3rd Year		4th Year		5th Year		6th Year		7th Year		8th Year		9th Year		10th Year
Workers' compensation	15.6	%	19.3	%	12.7	%	8.7	%	5.9	%	4.3	%	2.9	%	2.6	%	1.8	%	1.6	%
General liability	2.9	%	8.4	%	15.0	%	18.5	%	15.8	%	10.5	%	7.5	%	4.4	%	2.5	%	1.9	%
Marine	26.7	%	32.3	%	17.9	%	8.8	%	7.1	%	2.3	%	2.6	%	2.5	%
Package business	37.4	%	21.6	%	10.4	%	8.7	%	5.8	%	3.3	%	2.2	%	1.0	%	0.6	%	0.3	%
Commercial property	53.8	%	30.5	%	7.4	%	3.1	%	0.8	%	0.3	%	0.1	%	(0.2	%)
Commercial automobile liability	16.9	%	21.0	%	20.8	%	17.8	%	11.8	%	4.3	%	2.7	%	1.4	%	0.7	%	0.3	%
Commercial automobile physical damage	89.1	%	7.8	%	(0.4	)%
Professional liability	5.4	%	18.8	%	17.5	%	14.0	%	11.1	%	5.7	%	2.7	%	1.0	%
Bond	13.8	%	27.2	%	12.6	%	4.8	%	1.9	%	2.2	%	5.7	%	0.5	%	1.8	%	(6.2	%)
Assumed Reinsurance	37.7	%	39.0	%	7.4	%	4.7	%	8.8	%	2.3	%	0.9	%	0.7	%
Personal automobile liability	36.3	%	33.1	%	15.6	%	7.6	%	3.2	%	1.1	%	0.5	%	0.2	%	0.1	%	—	%
Personal automobile physical damage	96.3	%	3.0	%	(0.3	%)
Homeowners	69.6	%	21.5	%	3.3	%	1.2	%	0.6	%	0.3	%	0.1	%	0.1	%	—	%	0.1	%

Group Life, Disability and Accident Products

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

	For the years ended December 31,
	2019			2018			2017
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	8,445		$	8,512		$	5,772
Reinsurance recoverables	239			209			208
Beginning liabilities for unpaid losses and loss adjustment expenses, net	8,206			8,303			5,564
Aetna U.S. group life and disability business acquisition [1]	—			42			2,833
Provision for unpaid losses and loss adjustment expenses
Current incurral year	4,385			4,470			2,868
Prior year's discount accretion	219			227			202
Prior incurral year development [2]	(410		)	(324		)	(185		)
Total provision for unpaid losses and loss adjustment expenses [3]	4,194			4,373			2,885
Payments
Current incurral year	(2,277		)	(2,377		)	(1,528		)
Prior incurral years	(2,114		)	(2,135		)	(1,451		)
Total payments	(4,391		)	(4,512		)	(2,979		)
Ending liabilities for unpaid losses and loss adjustment expenses, net	8,009			8,206			8,303
Reinsurance recoverables	247			239			209
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	8,256		$	8,445		$	8,512

[1]	Amount recognized in 2018 represents an adjustment to Aetna U.S. group life and disability business reserves, net of reinsurance as of the acquisition date, upon finalization of the opening balance sheet.

[2]	Prior incurral year development represents the change in estimated ultimate incurred losses and loss adjustment expenses for prior incurral years on a discounted basis.

[3]	Includes unallocated loss adjustment expenses of $178, $194 and $111 for the years ended December 31, 2019, 2018 and 2017, respectively, that are recorded in insurance operating costs and other expenses in the Consolidated Statements of Operations.

F-69

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Group Life, Disability and Accident Products Reserves, Net of Reinsurance, that are Discounted

	For the years ended December 31,
	2019						2018						2017
Liability for unpaid losses and loss adjustment expenses, at undiscounted amounts	$	8,636					$	8,957					$	9,071
Amount of discount	(1,401					)	(1,505					)	(1,536					)
Carrying value of liability for unpaid losses and loss adjustment expenses	$	7,235					$	7,452					$	7,535
Weighted average discount rate	3.4					%	3.4					%	3.5					%
Range of discount rate	2.1		%	-	8.0	%	2.1		%	-	8.0	%	2.1		%	-	8.0	%

Reserves are discounted at rates in effect at the time claims were incurred, ranging from 2.1% for life and disability reserves acquired from Aetna based on interest rates in effect at the acquisition date of November 1, 2017, to 8.0% for the Company’s pre-acquisition reserves for incurral year 1990, and vary by product. Prior year's discount accretion has been calculated as the average reserve balance for the year times the weighted average discount rate.

Re-estimates of prior incurral years reserve in 2019

Group disability- Prior period reserve estimates decreased by approximately $340 largely driven by group long-term disability claim incidence lower than prior assumptions and strong recoveries on prior incurral year claims, including the impact of updating long-term disability ("LTD") recovery probabilities to be based on more recent experience. New York Paid Family Leave also experienced favorable claim emergence including an experience refund.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $60 largely driven by lower-than-previously expected claim incidence in group life premium waiver.

Re-estimates of prior incurral years reserves in 2018

Group disability- Prior period reserve estimates decreased by approximately $230 largely driven by group long-

term disability claim recoveries higher than prior reserve assumptions and, primarily for the 2017 incurral year, claim incidence lower than prior assumptions. Short-term disability also experienced favorable claim recoveries.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $90 largely driven by lower-than-previously expected claim incidence inclusive of group life, group life premium waiver, and group accidental death & dismemberment, principally for the 2017 incurral year.

Re-estimates of prior incurral years reserves in 2017

Group disability- Prior period estimates decreased by approximately $125 driven by group long-term disability favorable claim incidence for incurral year 2016 and claim recoveries higher than prior reserve assumptions.

Group life and accident (including group life premium waiver)- Contributing to an approximately $60 decrease in prior period reserve estimates was favorable claim incidence on group life premium waiver for incurral year 2016.

F-70

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Reconciliation of Loss Development to Liability for Unpaid Losses and Loss Adjustment Expenses as of December 31, 2019

	Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance															Subtotal
Reserve Line	Cumulative Incurred for Incurral Years Displayed in Triangles			Cumulative Paid for Incurral Years Displayed in Triangles			Unpaid for Incurral Years not Displayed in Triangles			Unpaid Unallocated Loss Adjustment Expenses, Net of Reinsurance			Discount			Unpaid Losses and Loss Adjustment Expenses, Net of Reinsurance			Reinsurance and Other Recoverables			Liability for Unpaid Losses and Loss Adjustment Expenses
Group long-term disability	$	13,157		$	(7,316	)	$	1,874		$	173		$	(1,272	)	$	6,616		$	236		$	6,852
Group life and accident, excluding premium waiver	5,793			(5,332		)	134			3			(18		)	580			1			581
Group short-term disability							114			4			—			118			—			118
Group life premium waiver							758			10			(111		)	657			2			659
Group supplemental health							38			—			—			38			8			46
Total Group Benefits	$	18,950		$	(12,648	)	$	2,918		$	190		$	(1,401	)	$	8,009		$	247		$	8,256

The following loss triangles present historical loss development for incurred and paid claims by the year the insured claim occurred, referred to as the incurral year. Triangles are limited to the number of years for which claims incurred typically remain outstanding. For group long-term disability, the Company has

provided nine incurral years of claims data as data for earlier periods was not available with respect to the U.S. group life and disability business acquired from Aetna. Short-tail lines, which represent claims generally expected to be paid within a few years, have three years of claim development displayed.

Group Long-Term Disability

Undiscounted Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
							For the years ended December 31,
							(Unaudited)
Incurral Year	2011			2012			2013			2014			2015			2016			2017			2018			2019			IBNR Reserves			Claims Reported
2011	$	1,917		$	1,761		$	1,660		$	1,659		$	1,669		$	1,660		$	1,649		$	1,638		$	1,631		$	—		39,246
2012				1,829			1,605			1,539			1,532			1,530			1,515			1,504			1,486			—			37,523
2013							1,660			1,479			1,429			1,429			1,416			1,413			1,399			1			31,946
2014										1,636			1,473			1,430			1,431			1,431			1,408			2			33,213
2015													1,595			1,442			1,422			1,420			1,401			3			33,820
2016																1,651			1,481			1,468			1,437			3			34,719
2017																			1,597			1,413			1,358			8			31,865
2018																						1,647			1,387			37			28,551
2019																									1,650			852			17,753
Total																									$	13,157

F-71

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
							For the years ended December 31,
							(Unaudited)
Incurral Year	2011			2012			2013			2014			2015			2016			2017			2018			2019
2011	$	118		$	508		$	743		$	886		$	996		$	1,087		$	1,167		$	1,231		$	1,286
2012				108			483			708			835			933			1,014			1,080			1,138
2013							102			443			664			791			881			954			1,016
2014										103			448			675			801			884			960
2015													108			460			687			806			891
2016																112			479			705			819
2017																			109			452			658
2018																						105			447
2019																									101
Total																									$	7,316

Group Life and Accident, excluding Premium Waiver

Undiscounted Incurred Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Incurral Year	2017			2018			2019			IBNR Reserves			Claims Reported
2017	$	1,999		$	1,953		$	1,951		$	4		45,139
2018				1,952			1,940			18			52,027
2019							1,902			373			45,825
Total							$	5,793

Cumulative Paid Losses & Allocated Loss Adjustment Expenses, Net of Reinsurance
	For the years ended December 31,
	(Unaudited)
Incurral Year	2017			2018			2019
2017	$	1,551		$	1,929		$	1,945
2018				1,532			1,916
2019							1,471
Total							$	5,332

Group life, disability and accident reserves, including IBNR

The majority of Group Benefits’ reserves are for LTD claimants who are known to be disabled and are currently receiving

benefits. A Disabled Life Reserve ("DLR") is calculated for each LTD claim. The DLR for each claim is the expected present value of all estimated future benefit payments and includes estimates of claim recovery, investment yield, and offsets from other income, including offsets from Social Security benefits and workers’ compensation. Estimated future benefit payments represent the monthly income benefit that is paid until recovery, death or expiration of benefits. Claim recoveries are estimated based on claim characteristics such as age and diagnosis and represent an estimate of benefits that will terminate, generally as a result of the claimant returning to work or being deemed able to return to work. The DLR also includes a liability for payments to claimants who have not yet been approved for LTD either because they have not yet satisfied the waiting (or elimination) period or because the approval or denial decision has not yet been made. In these cases, the present value of future benefits is reduced for the likelihood of claim denial based on Company experience. For claims recently closed due to recovery, a portion of the DLR is retained for the possibility that the claim reopens upon further evidence of disability. In addition, a reserve for estimated unpaid claim expenses is included in the DLR.

For incurral years with IBNR claims, estimates of ultimate losses are made by applying completion factors to the dollar amount of claims reported or expected depending on the market segment. IBNR represents estimated ultimate losses less both DLR and cumulative paid amounts for all reported claims. Completion factors are derived using standard actuarial techniques using triangles that display historical claim count emergence by incurral month. These estimates are reviewed for reasonableness and are adjusted for current trends and other factors expected to cause a change in claim emergence. The IBNR includes an estimate of unpaid claim expenses, including a provision for the cost of initial set-up of the claim once reported.

For all products, including LTD, there is a period generally ranging from two to twelve months, depending on the product and market segment, where emerged claim information for an incurral year is not yet credible enough to be a basis for an IBNR projection. In these cases, the ultimate losses and allocated loss adjustment

F-72

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

expenses are estimated using earned premium multiplied by an expected loss ratio.

The Company also records reserves for future death benefits under group term life policies that provide for premiums to be waived in the event the insured is unable to work due to disability and has satisfied an elimination period, which is typically nine months (premium waiver reserves). The death benefit reserve for these group life premium waiver claims is estimated for a known disabled claimant equal to the present value of expected future cash outflows (typically a lump sum face amount payable at death plus claim expenses) with separate estimates for claimant recovery (when no death benefit is payable) and for death before recovery or benefit expiry (when death benefit is payable). The IBNR for premium waiver death benefits is estimated with standard actuarial development methods.

In addition, the Company also records reserves for group term life, accidental death & dismemberment, short term disability, and

other group products that have short claim payout periods. For these products, reserves are determined using paid or reported actuarial development methods. The resulting claim triangles produce a completion pattern and estimate of ultimate loss. IBNR for these lines of business equals the estimated ultimate losses and loss adjustment expenses less the amount of paid or reported claims depending on whether the paid or reported development method was used. Estimates are reviewed for reasonableness and are adjusted for current trends or other factors that affect the development pattern.

Cumulative number of reported claims

For group life, disability and accident coverages, claim counts include claims that are approved, pending approval and terminated and exclude denied claims. Due to the nature of the claims, one claimant represents one event.

Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance
	(Unaudited)
	1st Year		2nd Year		3rd Year		4th Year		5th Year		6th Year		7th Year		8th Year		9th Year
Group long-term disability	7.4	%	24.8	%	15.5	%	8.6	%	6.3	%	5.4	%	4.6	%	3.9	%	3.4	%
Group life and accident, excluding premium waiver	78.6	%	19.6	%	0.9	%

12**.** RESERVE FOR FUTURE POLICY BENEFITS

Changes in Reserves for Future Policy Benefits [1]
Liability balance, as of January 1, 2019	$	642
Incurred	86
Paid	(102		)
Change in unrealized investment gains and losses	9
Liability balance, as of December 31, 2019	$	635
Reinsurance recoverable asset, as of January 1, 2019	$	27
Incurred	4
Paid	—
Reinsurance recoverable asset, as of December 31, 2019	$	31

Liability balance, as of January 1, 2018	$	713
Incurred	72
Paid	(101		)
Change in unrealized investment gains and losses	(42		)
Liability balance, as of December 31, 2018	$	642
Reinsurance recoverable asset, as of January 1, 2018	$	26
Incurred	1
Paid	—
Reinsurance recoverable asset, as of December 31, 2018	$	27

[1]	Reserves for future policy benefits includes paid-up life insurance and whole-life policies resulting from conversion from group life policies included within the Group Benefits segment and reserves for run-off structured settlement and terminal funding agreement liabilities which are in the Corporate category.

F-73

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13**.** DEBT

The Company’s long-term debt securities are issued by HFSG Holding Company, are unsecured obligations of HFSG Holding Company, and rank on a parity with all other unsecured and unsubordinated indebtedness of HFSG Holding Company.

Debt is carried net of discount and issuance cost.

Interest expense on debt is included in the corporate category for segment reporting.

Short-term and Long-term Debt by Issuance

	As of December 31,
	2019			2018
Revolving Credit Facilities	$	—		$	—
Senior Notes and Debentures
6.0% Notes, due 2019	—			413
5.5% Notes, due 2020	500			500
5.125% Notes, due 2022	—			800
2.8% Notes, due 2029	600			—
5.95% Notes, due 2036	300			300
6.625% Notes, due 2040	295			295
6.1% Notes, due 2041	409			409
6.625% Notes, due 2042	178			178
4.4% Notes, due 2048	500			500
3.6% Notes, due 2049	800			—
4.3% Notes, due 2043	300			300
Junior Subordinated Debentures
7.875% Notes, due 2042	600			600
3 Month LIBOR + 2.125% Notes, due 2067 [1]	500			500
Total Notes and Debentures	4,982			4,795
Unamortized discount and debt issuance cost [2]	(134		)	(117		)
Total Debt	4,848			4,678
Less: Current maturities	500			413
Long-Term Debt	$	4,348		$	4,265

[1]	In April 2017, the Company entered into an interest rate swap agreement expiring February 15, 2027 to effectively convert the variable interest payments for this debenture into fixed interest payments of approximately 4.39%**.

[2]	This amount includes unamortized discount of $76 and $78 as of December 31, 2019 and 2018*, respectively, on the* 6.1% Notes, due 2041.

The effective interest rate on the 6.1% senior notes due 2041 is 7.9%. The effective interest rate on the remaining notes does not differ materially from the stated rate. The Company incurred interest expense of $259, $298 and $316 on debt for the years ended December 31, 2019, 2018 and 2017, respectively.

Shelf Registrations

On May 17, 2019, the Company filed with the Securities and Exchange Commission an automatic shelf registration statement (Registration No. 333-231592) for the potential offering and sale of debt and equity securities. The registration statement allows for the following types of securities to be offered: debt securities, junior subordinated debt securities, guarantees, preferred stock,

common stock, depositary shares, warrants, stock purchase contracts, and stock purchase units. In that The Hartford is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act of 1933, the registration statement went effective immediately upon filing and The Hartford may offer and sell an unlimited amount of securities under the registration statement during the three-year life of the registration statement.

Senior Notes

On January 15, 2019, The Hartford repaid at maturity the $413 principal amount of its 6.0% senior notes.

In the Navigators Group acquisition, the Company assumed $265 par value 5.75% Senior notes due on October 15, 2023 with a fair value of $284 as of the acquisition date.

On August 19, 2019, The Hartford issued $600 of 2.8% senior notes (“2.8% Notes”) due August 19, 2029 and $800 of 3.6% senior notes (“3.6% Notes”) due August 19, 2049 for net proceeds of approximately $1.38 billion, after deducting underwriting discounts and expenses. Under both senior note issuances, interest is payable semi-annually in arrears on August 19 and February 19, commencing February 19, 2020. The Hartford, at its option, can redeem the 2.8% Notes and the 3.6% Notes at any time, in whole or part, at a redemption price equal to the greater of 100% of the principal amount being redeemed or a make-whole amount based on a comparable maturity US Treasury plus a basis point spread, plus any accrued and unpaid interest, except the make-whole amount is not applicable within the final three months of maturity for the 2.8% Notes and the final six months of maturity for the 3.6% Notes. The spread over the comparable maturity US Treasury for determining the make-whole amount is 20 and 25 basis points for the 2.8% Notes and 3.6% Notes, respectively.

After receiving proceeds from the issuance of the 2.8% Notes and 3.6% Notes, in third quarter 2019, The Hartford repaid $265 of 5.75% senior notes due 2023 that had been assumed in the Navigators Group acquisition and $800 of 5.125% senior notes due 2022 of the Hartford Financial Services Group, Inc., and recognized a loss on extinguishment of debt of $90.

F-74

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Junior Subordinated Debentures

Junior Subordinated Debentures by Issuance as of December 31, 2019

Issue	7.875% Debentures					3 Month LIBOR + 2.125%
Face Value	$	600				$	500
Interest Rate [1]	7.875		%	[2]		N/A		[3]
Call Date	April 15, 2022					February 15, 2022		[4]
Interest Rate Subsequent to Call Date [2]	3 Month LIBOR + 5.596%					3 Month LIBOR + 2.125%		[5]
Final Maturity	April 15, 2042					February 12, 2067

[1]	Interest rate in effect until call date.

[2]	Payable quarterly in arrears.

[3]	Debentures were issued on call date.

[4]	The original call date was February 15, 2017. Replacement Capital Covenant associated with the debenture prohibits the Company from redeeming all or any portion of the notes on or prior to February 15, 2022, unless consent from covered bondholders is obtained.

[5]	In April 2017, the company entered into an interest rate swap agreement expiring February 15, 2027 to effectively convert the interest payments for the 3 Month LIBOR + 2.125% debenture into fixed interest payments of approximately 4.39%**.

The debentures are unsecured, subordinated and junior in right of payment and upon liquidation to all of the Company’s existing and future senior indebtedness. In addition, the debentures are effectively subordinated to all of the Company’s subsidiaries’ existing and future indebtedness and other liabilities, including obligations to policyholders. The debentures do not limit the Company’s or the Company’s subsidiaries’ ability to incur additional debt, including debt that ranks senior in right of payment and upon liquidation to the debentures.

The Company has the right to defer interest payments for up to a consecutive ten years without giving rise to an event of default. Deferred interest will continue to accrue and will accrue additional interest at the then applicable interest rate. If the Company defers interest payments, the Company generally may not make payments on or redeem or purchase any shares of its capital stock or any of its debt securities or guarantees that rank upon liquidation, dissolution or winding up equally with or junior to the debentures, subject to certain limited exceptions.

The 7.875% and 3 Month LIBOR plus 2.125% debentures may be redeemed in whole prior to the call date upon certain tax or rating agency events, at a price equal to the greater of 100% of the principal amount being redeemed and the applicable make-whole amount plus any accrued and unpaid interest. The Company may elect to redeem the 7.875% and 3 Month LIBOR plus 2.125% debentures in whole or in part on or after the call date for the principal amount being redeemed plus accrued and unpaid interest to the date of redemption.

In connection with the offering of the 3 Month LIBOR plus 2.125% debenture, the Company entered into a Replacement Capital Covenant ("RCC") for the benefit of holders of one or more designated series of the Company's indebtedness, initially the Company's 4.3% notes due 2043. Under the terms of the

RCC, if the Company redeems the debenture any time prior to February 12, 2047 (or such earlier date on which the RCC terminates by its terms) it can only do so with the proceeds from the sale of certain qualifying replacement securities. The RCC also prohibits the Company from redeeming all or any portion of the notes on or prior to February 15, 2022.

In July 2017, the U.K. Financial Conduct Authority announced that, by the end of 2021, it intends to stop persuading or compelling banks to report information used to set LIBOR, which could result in LIBOR no longer being published after 2021 or a determination by regulators that LIBOR is no longer representative of its underlying market. The Company continues to monitor and assess the potential impacts of the discontinuation of LIBOR on its outstanding junior subordinated debentures.

Long-Term Debt

Long-term Debt Maturities (at par value) as of December 31, 2019

2020 - Current maturities	$	500
2021	$	—
2022	$	—
2023	$	—
2024	$	—
Thereafter	$	4,482

Revolving Credit Facilities

The Company has a senior unsecured five-year revolving credit facility (“Credit Facility”) that provides up to $750 of unsecured credit through March 29, 2023. Revolving loans from the Credit Facility may be in multiple currencies. U.S. dollar loans will bear interest at a floating rate equivalent to an indexed rate depending on the type of borrowing and a basis point spread based on The Hartford's credit rating and will mature no later than March 29, 2023. Letters of credit issued from the Credit Facility bear a fee based on The Hartford's credit rating and expire no later than March 29, 2024. The Credit Facility requires the Company to maintain a minimum consolidated net worth, excluding AOCI, of $9 billion, limit the ratio of senior debt to capitalization, excluding AOCI, at 35% and meet other customary covenants. The Credit Facility is for general corporate purposes.

As of December 31, 2019, no borrowings were outstanding, $5 in letters of credit were issued under the Credit Facility and the Company was in compliance with all financial covenants.

Lloyd's Letter of Credit

As a result of the acquisition of Navigators Group, The Hartford has two letter of credit facility agreements: the Club Facility and the Bilateral Facility, which are used to provide a portion of the capital requirements at Lloyd's. In November of 2019, the Company issued £11 million of letters of credit under the Bilateral Facility. As of December 31, 2019, uncollateralized letters of credit with an aggregate face amount of $165 and £60 million were outstanding under the Club Facility and £18 was outstanding under the Bilateral Facility. As of December 31, 2019, the Bilateral Facility has unused capacity of $1 for issuance of additional letters of credit. Among other covenants, the Club

F-75

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Facility and Bilateral Facility contain financial covenants regarding tangible net worth and Funds at Lloyd's ("FAL"). As of December 31, 2019, Navigators Group was in compliance with all financial covenants.

Commercial Paper

As of December 31, 2019, the Hartford's maximum borrowings available under its commercial paper program was $750 and there was no commercial paper outstanding. The Company is dependent upon market conditions to access short-term financing through the issuance of commercial paper to investors.

Collateralized Advances with Federal Home Loan Bank of Boston

The Company’s subsidiaries, Hartford Fire Insurance Company (“Hartford Fire”) and HLA, are members of the Federal Home Loan Bank of Boston (“FHLBB”). Membership allows these subsidiaries access to collateralized advances, which may be short- or long-term with fixed or variable rates. FHLBB membership required the purchase of member stock and requires additional member stock ownership of 3% or 4% of any amount

borrowed. Acceptable forms of collateral include real estate backed fixed maturities and mortgage loans and the amount of advances that can be taken is limited to a percentage of the fair value of the assets that ranges from a high of 97% for US government-backed fixed maturities maturing within 3 years to a low of 40% for A-rated commercial mortgage-backed fixed maturities maturing in 5 years or more. In its consolidated balance sheets, The Hartford presents the liability for advances taken based on use of the funds with advances for general corporate purposes presented in short- or long-term debt and advances to earn incremental investment income presented in other liabilities, consistent with other collateralized financing transactions such as securities lending and repurchase agreements. The Connecticut Department of Insurance permits Hartford Fire and HLA to pledge up to $1.2 billion and $0.6 billion in qualifying assets, respectively, without prior approval, to secure FHLBB advances in 2020. The pledge limit is determined annually based on statutory admitted assets and capital and surplus of Hartford Fire and HLA, respectively.

As of December 31, 2019, there were no advances outstanding under the FHLBB facility.

14**.** COMMITMENTS AND CONTINGENCIES

Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable. Management establishes liabilities for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more probable than any other, the Company records an estimated liability at the low end of the range of losses.

Litigation

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. Subject to the uncertainties in the following discussion under the caption “Asbestos and Environmental Claims,” management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. In addition to the matter described below, these actions include putative class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, underpayment of claims or improper sales or underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile, property, disability, life and inland marine. The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims or other allegedly unfair or improper business practices. Like many other insurers, The Hartford also has been joined in actions by asbestos plaintiffs

asserting, among other things, that insurers had a duty to protect the public from the dangers of asbestos and that insurers committed unfair trade practices by asserting defenses on behalf of their policyholders in the underlying asbestos cases. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the consolidated financial condition of The Hartford. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, the outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

Run-off Asbestos and Environmental Claims

The Company continues to receive A&E claims. Asbestos claims relate primarily to bodily injuries asserted by people who came in contact with asbestos or products containing asbestos. Environmental claims relate primarily to pollution and related clean-up costs.

The vast majority of the Company's exposure to A&E relates to Run-off A&E, reported within the P&C Other Operations segment. In addition, since 1986, the Company has written asbestos and environmental exposures under general liability policies and pollution liability under homeowners policies, which are reported in the Commercial Lines and Personal Lines segments.

Prior to 1986, the Company wrote several different categories of insurance contracts that may cover A&E claims. First, the Company wrote primary policies providing the first layer of coverage in an insured’s liability program. Second, the Company wrote excess and umbrella policies providing higher layers of coverage for losses that exhaust the limits of underlying coverage.

F-76

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Third, the Company acted as a reinsurer assuming a portion of those risks assumed by other insurers writing primary, excess, umbrella and reinsurance coverages.

Significant uncertainty limits the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid gross losses and expenses related to environmental and particularly asbestos claims. The degree of variability of gross reserve estimates for these exposures is significantly greater than for other more traditional exposures.

In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent emerging legal doctrines. Furthermore, over time, insurers, including the Company, have experienced significant changes in the rate at which asbestos claims are brought, the claims experience of particular insureds, and the value of claims, making predictions of future exposure from past experience uncertain. Plaintiffs and insureds also have sought to use bankruptcy proceedings, including “pre-packaged” bankruptcies, to accelerate and increase loss payments by insurers. In addition, some policyholders have asserted new classes of claims for coverages to which an aggregate limit of liability may not apply. Further uncertainties include insolvencies of other carriers and unanticipated developments pertaining to the Company’s ability to recover reinsurance for A&E claims. Management believes these issues are not likely to be resolved in the near future.

In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liability and damages, the risks inherent in major litigation, inconsistent decisions concerning the existence and scope of coverage for environmental claims, and uncertainty as to the monetary amount being sought by the claimant from the insured.

The reporting pattern for assumed reinsurance claims, including those related to A&E claims, is much longer than for direct claims. In many instances, it takes months or years to determine that the policyholder’s own obligations have been met and how the reinsurance in question may apply to such claims. The delay in reporting reinsurance claims and exposures adds to the uncertainty of estimating the related reserves.

It is also not possible to predict changes in the legal and legislative environment and their effect on the future development of A&E claims.

Given the factors described above, the Company believes the actuarial tools and other techniques it employs to estimate the ultimate cost of claims for more traditional kinds of insurance exposure are less precise in estimating reserves for A&E exposures. For this reason, the Company principally relies on exposure-based analysis to estimate the ultimate costs of these claims, both gross and net of reinsurance, and regularly evaluates new account information in assessing its potential A&E exposures. The Company supplements this exposure-based analysis with evaluations of the Company’s historical direct net loss and expense paid and reported experience, and net loss and expense paid and reported experience by calendar and/or report year, to assess any emerging trends, fluctuations or characteristics suggested by the aggregate paid and reported activity.

While the Company believes that its current A&E reserves are appropriate, significant uncertainties limit the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses. The ultimate liabilities, thus, could exceed the currently recorded reserves, and any such additional liability, while not estimable now, could be material to The Hartford’s consolidated operating results and liquidity.

For its Run-off A&E, as of December 31, 2019, the Company reported $874 of net asbestos reserves and $120 of net environmental reserves. While the Company believes that its current Run-off A&E reserves are appropriate, significant uncertainties limit our ability to estimate the ultimate reserves necessary for unpaid losses and related expenses. The ultimate liabilities, thus, could exceed the currently recorded reserves, and any such additional liability, while not reasonably estimable now, could be material to The Hartford's consolidated operating results and liquidity.

The Company’s A&E ADC reinsurance agreement with NICO reinsures substantially all A&E reserve development for 2016 and prior accident years, including Run-off A&E and A&E reserves included in Commercial Lines and Personal Lines. The A&E ADC has a coverage limit of $1.5 billion above the Company’s existing net A&E reserves as of December 31, 2016 of approximately $1.7 billion. As of December 31, 2019, the Company has incurred $640 in cumulative adverse development on A&E reserves that have been ceded under the A&E ADC treaty with NICO, leaving $860 of coverage available for future adverse net reserve development, if any. Cumulative adverse development of A&E claims for accident years 2016 and prior could ultimately exceed the $1.5 billion treaty limit in which case any adverse development in excess of the treaty limit would be absorbed as a charge to earnings by the Company. In these scenarios, the effect of these charges could be material to the Company’s consolidated operating results and liquidity. For more information on the A&E ADC, refer to Note 11, Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements.

Unfunded Commitments

As of December 31, 2019, the Company has outstanding commitments totaling $1,258, of which $852 is committed to fund limited partnership and other alternative investments, which may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. Additionally, $191 of the outstanding commitments relate to various funding obligations associated with private debt and equity securities. The remaining outstanding commitments of $215 relate to mortgage loans. Of the $1,258 in total outstanding commitments, $130 are related to mortgage loan commitments which the Company can cancel unconditionally.

Guaranty Funds and Other Insurance-Related Assessments

In all states, insurers licensed to transact certain classes of insurance are required to become members of a guaranty fund. In most states, in the event of the insolvency of an insurer writing any such class of insurance in the state, the guaranty funds may assess its members to pay covered claims of the insolvent

F-77

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

insurers. Assessments are based on each member's proportionate share of written premiums in the state for the classes of insurance in which the insolvent insurer was engaged. Assessments are generally limited for any year to one or two percent of the premiums written per year depending on the state. Some states permit member insurers to recover assessments paid through surcharges on policyholders or through full or partial premium tax offsets, while other states permit recovery of assessments through the rate filing process.

Liabilities for guaranty fund and other insurance-related assessments are accrued when an assessment is probable, when it can be reasonably estimated, and when the event obligating the Company to pay an imposed or probable assessment has occurred. Liabilities for guaranty funds and other insurance-related assessments are not discounted and are included as part of other liabilities in the Consolidated Balance Sheets. As of December 31, 2019 and 2018 the liability balance was $89 and $97, respectively. As of December 31, 2019 and 2018 amounts related to premium tax offsets of $2 and $2, respectively, were included in other assets.

Derivative Commitments

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings, as set by nationally recognized statistical agencies, of the individual legal entity that entered into the derivative agreement. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could demand immediate and ongoing full collateralization and, in certain instances, enable the counterparties to terminate the agreements and demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement. The settlement amount is determined by netting the derivative positions transacted under each agreement. If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of December 31, 2019 was $81. For this $81, the legal entities have

posted collateral of $77 in the normal course of business. Based on derivative market values as of December 31, 2019, a downgrade of one level below the current financial strength ratings by either Moody’s or S&P would not require additional assets to be posted as collateral. Based on derivative market values as of December 31, 2019, a downgrade of two levels below the current financial strength ratings by either Moody’s or S&P would require an additional $5 of assets to be posted as collateral. These collateral amounts could change as derivative market values change, as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated. The nature of the additional collateral that we would post, if required, would be primarily in the form of U.S. Treasury bills, U.S. Treasury notes and government agency securities.

Guarantees

In the ordinary course of selling businesses or entities to third parties, the Company has agreed to indemnify purchasers for losses arising subsequent to the closing due to breaches of representations and warranties with respect to the business or entity being sold or with respect to covenants and obligations of the Company and/or its subsidiaries. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable. The Company does not expect to make any payments on these guarantees and is not carrying any liabilities associated with these guarantees.

The Hartford has guaranteed the obligations of certain life, accident and health and annuity contracts of the life and annuity business written by Hartford Life Insurance Company between 1990 and 1997 and written by Hartford Life and Annuity Insurance Company between 1993 and 2009. After the sale of this business in May 2018, the purchaser indemnified the Company for any liability arising under the guarantees. The guarantees have no limitation as to maximum potential future payments. The Hartford has not recorded a liability and the likelihood for any payments under these guarantees is remote.

15**.** EQUITY

Capital Purchase Program ("CPP") Warrants

CPP warrants were issued in 2009 as part of a program established by the U.S. Department of the Treasury under the Emergency Economic Stabilization Act of 2008. The CPP warrants expired on June 26, 2019.

The declaration of common stock dividends by the Company in excess of a threshold triggered a provision in the Company's warrant agreement with The Bank of New York Mellon resulting in adjustments to the CPP warrant exercise price and the number of shares deliverable for each warrant exercised (“Warrant Share Number”). Accordingly, the CPP warrant exercise price was$8.836 and $8.999 and the Warrant Share Number was 1.1 and 1.0 as of December 31, 2018 and December 31, 2017, respectively. The exercise price was settled by the Company

withholding the number of common shares issuable upon exercise of the warrants equal to the value of the aggregate exercise price of the warrants so exercised determined by reference to the closing price of the Company's common stock on the trading day on which the warrants were exercised and notice was delivered to the warrant agent. CPP warrant exercises were 1.9 million, 0.3 million and 1.8 million during the years ended December 31, 2019, 2018 and 2017, respectively.

Equity Repurchase Program

In February, 2019, the Company announced a 1.0 billion share repurchase authorization by the Board of Directors which is effective through December 31, 2020. As of December 31, 2019, the Company had $800 remaining capacity under the equity repurchase program. Any repurchase of shares under the equity repurchase program is dependent on market conditions and other factors.

F-78

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the period January 1, 2020 to February 19, 2020, the Company repurchased approximately 1.4 million common shares for $82.

Preferred Stock

On November 6, 2018, the Company issued 13.8 million depositary shares each representing 1/1000th interest in a share of the Company’s 6.0% Series G non-cumulative perpetual preferred stock (“Preferred Stock”) with a liquidation preference of $25,000 per share (equivalent to $25.00 per depositary share), for net cash proceeds of $334. The Preferred Stock is perpetual and has no maturity date. Dividends are recorded when declared. Dividends are payable, if declared, quarterly in arrears on the 15th day of February, May, August and November of each year. If a dividend is not declared and paid or made payable on all outstanding shares of the Preferred Stock for the latest completed dividend period, no dividends may be paid or declared on The Hartford’s common stock and The Hartford may not purchase, redeem, or otherwise acquire its common stock.

The Preferred Stock is redeemable at the Company’s option in whole or in part, on or after November 15, 2023 at a redemption price of $25,000 per share, plus unpaid dividends attributable to the current dividend period. Prior to November 15, 2023, the Preferred Stock is redeemable at the Company’s option, in whole but not in part, within 90 days of the occurrence of (a) a rating agency event at a redemption price equal to $25,500 per share, plus unpaid dividends attributable to the current dividend period in circumstances where a rating agency changes its criteria used to assign equity credit to securities like the Preferred Stock; or (b) a regulatory capital event at a redemption price equal to $25,000 per share, plus unpaid dividends attributable to the current dividend period in circumstances where a capital regulator such as a state insurance regulator changes or proposes to change capital adequacy rules.

Statutory Results

The U.S. domestic insurance subsidiaries of The Hartford prepare their statutory financial statements in conformity with statutory accounting practices prescribed or permitted by the applicable state insurance department which vary materially from U.S. GAAP. Prescribed statutory accounting practices include publications of the NAIC, as well as state laws, regulations and general administrative rules. The differences between statutory financial statements and financial statements prepared in accordance with U.S. GAAP vary between domestic and foreign jurisdictions. The principal differences are that statutory financial statements do not reflect deferred policy acquisition costs and limit deferred income taxes, predominately use interest rate and mortality assumptions prescribed by the NAIC for life benefit reserves, generally carry bonds at amortized cost, and present reinsurance assets and liabilities net of reinsurance. For reporting purposes, statutory capital and surplus is referred to collectively as "statutory capital".

U.S. Statutory Net Income (Loss)

	For the years ended December 31,
	2019			2018			2017
Group Benefits Insurance Subsidiary	$	513		$	390		$	(1,066	)
Property and Casualty Insurance Subsidiaries	1,391			1,114			950
Life and annuity business sold in May, 2018	—			196			369
Total	$	1,904		$	1,700		$	253

U.S. Statutory Capital

	As of December 31,
	2019			2018
Group Benefits Insurance Subsidiary	$	2,644		$	2,407
Property and Casualty Insurance Subsidiaries	10,208			7,435
Total	$	12,852		$	9,842

Regulatory Capital Requirements

The Company's U.S. insurance companies' states of domicile impose risk-based capital (“RBC”) requirements. The requirements provide a means of measuring the minimum amount of statutory capital appropriate for an insurance company to support its overall business operations based on its size and risk profile. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. All of the Company's operating insurance subsidiaries had RBC ratios in excess of the minimum levels required by the applicable insurance regulations.

Similar to the RBC ratios that are employed by U.S. insurance regulators, regulatory authorities in the international jurisdictions in which the Company operates generally establish minimum solvency requirements for insurance companies. All of the Company's international insurance subsidiaries have capital levels in excess of the minimum levels required by the applicable regulatory authorities.

Dividend Restrictions

Dividends to HFSG Holding Company from its insurance subsidiaries are restricted by insurance regulation. Upon the acquisition of Navigators Group, the Company’s principal insurance subsidiaries are domiciled in the United States, the United Kingdom and Belgium.

The payment of dividends by Connecticut-domiciled insurers is limited under the insurance holding company laws of Connecticut. These laws require notice to and approval by the state insurance commissioner for the declaration or payment of any dividend, which, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (i) 10% of the insurer’s statutory policyholder surplus as of December 31 of the preceding year or (ii) net income (or net gain from operations, if such company is a life insurance

F-79

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

company) for the twelve-month period ending on the thirty-first day of December last preceding, in each case determined under statutory insurance accounting principles. In addition, if any dividend of a Connecticut-domiciled insurer exceeds the insurer’s earned surplus, it requires the prior approval of the Connecticut Insurance Commissioner.

Property casualty insurers domiciled in New York, including Navigators Insurance Company ("NIC") and Navigators Specialty Insurance Company ("NSIC"), generally may not, without notice to and approval by the state insurance commissioner, pay dividends out of earned surplus in any twelve‑month period that exceeds the lesser of (i) 10% of the insurer’s statutory policyholders’ surplus as of the most recent financial statement on file, or (ii) 100% of its adjusted net investment income, as defined, for the same twelve month period. As part of the New York state insurance commissioner's approval of the Navigators Group acquisition, and as is common practice, any dividend from NIC and NSIC before May 2021 will require prior approval from the state insurance commissioner.

Corporate members of Lloyd's Syndicates may pay dividends to its parent to the extent of available profits that have been distributed from the syndicate in excess of the FAL capital requirement. The FAL is determined based on the syndicate’s solvency capital requirement of the syndicate under the E.U.'s Solvency II capital adequacy model, plus a Lloyd’s specific economic capital assessment.

Insurers domiciled in the United Kingdom may pay dividends to its parent out of its statutory profits subject to restrictions imposed under U.K. Company law and European Insurance regulation (Solvency II). Belgium domiciled insurers may only pay dividends if, at the end of its previous fiscal year, the total amount of its assets, as reduced by its provisions and debts, are in excess of certain minimum capital thresholds calculated under Belgian law.

The insurance holding company laws of the other jurisdictions in which The Hartford’s insurance subsidiaries are incorporated (or deemed commercially domiciled) generally contain similar (although in certain instances more restrictive) limitations on the payment of dividends. In addition to statutory limitations on paying dividends, the Company also takes other items into consideration when determining dividends from subsidiaries. These considerations include, but are not limited to, expected earnings and capitalization of the subsidiaries, regulatory capital requirements and liquidity requirements of the individual operating company.

In 2019, the Company received $300 of dividends from HLA, $116 from Hartford Funds and $3 from a run-off HFSG subsidiary. In addition, the Company received $50 of ordinary P&C dividends that were subsequently contributed to a run-off P&C subsidiary. Excluding the dividends that were subsequently contributed to a P&C subsidiary, there were no net dividends paid by P&C subsidiaries to HFSG Holding Company in 2019.

The Company’s property and casualty insurance subsidiaries have dividend capacity of $1.6 billion for 2020, with $850 to $900 of net dividends expected in 2020.

HLA has dividend capacity of $534 in 2020 with $300 to $350 of dividends expected in 2020.

There are no current restrictions on HFSG Holding Company's ability to pay dividends to its stockholders.

Restricted Net Assets

The Company's insurance subsidiaries had net assets of $15.6 billion, determined in accordance with U.S. GAAP, that were restricted from payment to the HFSG Holding Company, without prior regulatory approval at December 31, 2019.

16**.** INCOME TAXES

Income Tax Expense

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions, as applicable. Income (loss) from continuing operations before income taxes included income from domestic operations of $2,644, $1,753 and $704 for the years ended December 31, 2019, 2018 and 2017, and income (losses) from foreign operations of $(84), $0 and $19 for the years ended December 31, 2019, 2018 and 2017.

Income Tax Expense

	For the years ended December 31,
	2019			2018			2017
Income Tax Expense (Benefit)
Current - U.S. Federal	$	8		$	(18	)	$	116
Foreign	—			—			1
Total current	8			(18		)	117
Deferred - U.S. Federal	476			286			866
Foreign	(9		)	—			2
Total deferred	467			286			868
Total income tax expense	$	475		$	268		$	985

F-80

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Income Tax Rate Reconciliation

	For the years ended December 31,
	2019			2018			2017
Tax provision at U.S. federal statutory rate	$	538		$	368		$	253
Tax-exempt interest	(56		)	(66		)	(123		)
Dividends received deduction	(6		)	(2		)	(3		)
Executive Compensation	7			11			—
Stock-based compensation	(7		)	(5		)	(15		)
Tax Reform	—			(39		)	877
Other	(1		)	1			(4		)
Provision for income taxes	$	475		$	268		$	985

Included in 2018 is a benefit of $39 related to Tax Reform, primarily due to the elimination of the sequestration fee on alternative minimum tax ("AMT") credits.

Included in 2017 is an expense of $877 due to the effects of Tax Reform, primarily due to the reduction in net deferred tax assets as a result of the reduction in the federal corporate income tax rate from 35% to 21%.

Deferred Taxes

Deferred tax assets and liabilities on the consolidated balance sheets represent the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. In lieu of recording a benefit of the tax capital loss on the sale of the life and annuity business, the Company elected to retain tax net operating loss carryovers with an estimated benefit of $477 as of December 31, 2018.

The Company predominantly pays non-income state taxes as a percentage of premiums written which are accounted for as policy acquisition costs. State income taxes were $5, $4 and $5 for the years ended December 31, 2019, 2018 and December 31, 2017, respectively, and are included in other expenses. The Hartford has not recorded state deferred taxes, including net deferred tax assets from state operating loss carryforwards because the Company does not expect to earn state taxable income to utilize such state tax benefits.

Deferred Tax Assets (Liabilities)

	As of December 31,
	2019			2018
Deferred Tax Assets
Loss reserves and tax discount	$	214		$	150
Unearned premium reserve and other underwriting related reserves	385			355
Investment-related items	130			183
Employee benefits	287			287
Net operating loss carryover	84			521
Other	27			1
Total Deferred Tax Assets	1,127			1,497
Valuation Allowance	(4		)	—
Deferred Tax Assets, Net of Valuation Allowance	1,123			1,497
Deferred Tax Liabilities
Deferred acquisition costs	(143		)	(104		)
Net unrealized gains on investments	(458		)	(7		)
Other depreciable and amortizable assets	(223		)	(135		)
Other	—			(3		)
Total Deferred Tax Liabilities	(824		)	(249		)
Net Deferred Tax Asset	$	299		$	1,248

The Company had net operating loss ("NOL") carryforwards in the United States and the United Kingdom for which future tax benefits of $77 and $3 , respectively, have been recognized and are included in the table above as a component of the net deferred tax asset for the year ended December 31, 2019. The Company also has NOLs of $4 in other foreign jurisdictions for which a full valuation allowance of $4 has been established. Although the Company projects there will be sufficient future taxable income to fully recover the remainder of the NOL carryover for which benefits have been recognized, the Company's estimate of the likely realization may change over time. The U.S. NOL carryovers, if unused, would expire between 2028 and 2036. The foreign NOLs do not expire.

With the exception of the foreign NOLs noted above, a deferred tax valuation allowance has not been recorded because the Company believes the deferred tax assets will more likely than not be realized. In assessing the need for a valuation allowance, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryovers, taxable income in open carry back years and other tax planning strategies. From time to time, tax planning strategies could include holding a portion of debt securities with market value losses until recovery, altering the level of tax exempt securities held, making investments which have specific tax characteristics, and business considerations such as asset-liability matching. Management views such tax planning strategies as prudent and feasible and would implement them, if necessary, to realize the deferred tax assets.

F-81

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Uncertain Tax Positions

Rollforward of Unrecognized Tax Benefits

	For the years ended December 31,
	2019			2018			2017
Balance, beginning of period	$	14		$	9		$	12
Gross increases - tax positions in prior period	—			5			3
Gross decreases - tax positions in prior period	—			—			—
Gross decreases - Tax Reform	—			—			(6		)
Balance, end of period	$	14		$	14		$	9

The entire amount of unrecognized tax benefits, if recognized, would affect the effective tax rate in the period of the release.

In addition, for the year ended December 31, 2018 the Company recorded a receivable of $5 related to a tax indemnification agreement associated with the life and annuity business sold in May 2018. The receivable is separate from the tax liability and is classified in other assets on the balance sheet.

Other Tax Matters

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as Tax Reform. Tax Reform establishes new tax laws effective January 1, 2018, including, but not limited to, (1) reduction of the U.S. federal corporate income tax rate from 35% to 21%; (2) elimination of the corporate alternative minimum tax AMT and changing how existing AMT credits can be realized, (3) limitations on the deductibility of certain executive compensation, (4) changes to the discounting of statutory reserves for tax purposes, and (5) limitations on NOLs generated after December 31, 2017 though there is no impact to the Company’s current NOL carryforwards.

Related to Tax Reform, the Company recorded a provisional net income tax expense of $877 in the period ending December 31, 2017. This net expense consisted of an $821 reduction of the Company’s deferred tax assets primarily due to the reduction in the U.S. federal corporate income tax rate and a $56 sequestration fee payable associated with refundable AMT credits.

During 2018, the Company recorded income tax expense of $17 as measurement period adjustments related to Tax Reform due to the filing of the Company's 2017 federal income tax return and completion of the Aetna Group Benefits acquisition. In addition, the Company recorded an income tax benefit of $56, reflecting the elimination of the sequestration fee payable. In total, the Company recorded a net income tax benefit from Tax Reform of $39 in 2018.

In July 2019, the Company received a $421 refund of alternative minimum tax AMT credits. As of December 31, 2019 the Company had remaining AMT credit carryovers of $410 which are reflected as a current income tax receivable within other assets in the accompanying Condensed Consolidated Balance Sheets. AMT credits may be used to offset a regular tax liability for any taxable year beginning after December 31, 2017, and are refundable at an amount equal to 50 percent of the excess of the minimum tax credit for the taxable year over the amount of credit allowable for the year against regular tax liability. Any remaining credits not used against regular tax liability are refundable in the 2021 tax year to be realized in 2022. For the twelve months ended December 31, 2019, the Company offset $11 of regular tax liability with AMT credits.

The federal audits for the Company have been completed through 2013, and the Company is not currently under federal examination for any open years. The statute of limitations is closed through the 2015 tax year with the exception of NOL carryforwards utilized in open tax years. Navigators Group is currently under federal audit for the 2016 year and has completed examinations through 2015. Management believes that adequate provision has been made in the Company's Condensed Consolidated Financial Statements for any potential adjustments that may result from tax examinations and other tax-related matters for all open tax years.

The Company classifies interest and penalties (if applicable) as income tax expense in the consolidated financial statements. The Company recognized net interest income of $1 for the year ended December 31, 2019, and $0 for the years ended 2018 and 2017. The Company had no interest payable as of December 31, 2019 and 2018. The Company does not believe it would be subject to any penalties in any open tax years and, therefore, has not recorded any accrual for penalties.

F-82

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

17**.** CHANGES IN AND RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in AOCI, Net of Tax for the Year Ended December 31, 2019

	Changes in
	Net Unrealized Gain on Securities			OTTI Losses in OCI			Net Gain (Loss) on Cash Flow Hedging Instruments			Foreign Currency Translation Adjustments			Pension and Other Postretirement Plan Adjustments			AOCI, net of tax
Beginning balance	$	24		$	(4	)	$	(5	)	$	30		$	(1,624	)	$	(1,579	)
OCI before reclassifications	1,797			1			22			4			(82		)	1,742
Amounts reclassified from AOCI	(137		)	—			(8		)	—			34			(111		)
OCI, net of tax	1,660			1			14			4			(48		)	1,631
Ending balance	$	1,684		$	(3	)	$	9		$	34		$	(1,672	)	$	52

Changes in AOCI, Net of Tax for the Year Ended December 31, 2018

	Changes in
	Net Unrealized Gain on Securities			OTTI Losses in OCI			Net Gain (Loss) on Cash Flow Hedging Instruments			Foreign Currency Translation Adjustments			Pension and Other Postretirement Plan Adjustments			AOCI, net of tax
Beginning balance	$	1,931		$	(3	)	$	18		$	34		$	(1,317	)	$	663
Cumulative effect of accounting changes, net of tax [1]	273			—			2			4			(284		)	(5		)
Adjusted balance, beginning of period	2,204			(3		)	20			38			(1,601		)	658
OCI before reclassifications [2]	(2,245		)	—			8			(8		)	(61		)	(2,306		)
Amounts reclassified from AOCI	65			(1		)	(33		)	—			38			69
OCI, net of tax	(2,180		)	(1		)	(25		)	(8		)	(23		)	(2,237		)
Ending balance	$	24		$	(4	)	$	(5	)	$	30		$	(1,624	)	$	(1,579	)

[1]	Includes reclassification to retained earnings of $88 of stranded tax effects and $93 of net unrealized gains, net of tax, related to equity securities. Refer to Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements for further information.

[2]	The reduction in AOCI included the effect of removing $758 of AOCI from the balance sheet when the life and annuity business was sold in May 2018.

Changes in AOCI, Net of Tax for the Year ended December 31, 2017

	Changes in
	Net Unrealized Gain on Securities			OTTI Losses in OCI			Net Gain on Cash Flow Hedging Instruments			Foreign Currency Translation Adjustments			Pension and Other Postretirement Plan Adjustments			AOCI, net of tax
Beginning balance	$	1,276		$	(3	)	$	76		$	6		$	(1,692	)	$	(337	)
OCI before reclassifications	857			—			(8		)	28			(146		)	731
Amounts reclassified from AOCI	(202		)	—			(50		)	—			521			269
OCI, net of tax	655			—			(58		)	28			375			1,000
Ending balance	$	1,931		$	(3	)	$	18		$	34		$	(1,317	)	$	663

F-83

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Reclassifications from AOCI

AOCI	Amount Reclassified from AOCI									Affected Line Item in the Consolidated Statement of Operations
	For the year ended December 31, 2019			For the year ended December 31, 2018			For the year ended December 31, 2017
Net Unrealized Gain on Securities
Available-for-sale securities	$	174		$	(80	)	$	152		Net realized capital gains (losses)
	174			(80		)	152			Total before tax
	37			(17		)	53			Income tax expense
	—			(2		)	103			Income (loss) from discontinued operations, net of tax
	$	137		$	(65	)	$	202		Net income (loss)
OTTI Losses in OCI
Other than temporary impairments	$	—		$	—		$	—		Net realized capital gains (losses)
	—			—			—			Total before tax
	—			—			—			Income tax expense
	—			1			—			Income (loss) from discontinued operations, net of tax
	—			1			—			Net income (loss)
Net Gains on Cash Flow Hedging Instruments
Interest rate swaps	$	2		$	6		$	5		Net realized capital gains (losses)
Interest rate swaps	4			30			37			Net investment income
Interest rate swaps	1			—			—			Interest expense
Foreign currency swaps	3			—			—			Net investment income
	10			36			42			Total before tax
	2			8			15			Income tax expense
	$	—		$	5		$	23		Income (loss) from discontinued operations, net of tax
	$	8		$	33		$	50		Net income (loss)
Pension and Other Postretirement Plan Adjustments
Amortization of prior service credit	$	7		$	7		$	7		Insurance operating costs and other expenses
Amortization of actuarial loss	(50		)	(55		)	(61		)	Insurance operating costs and other expenses
Settlement loss	—			—			(747		)	Insurance operating costs and other expenses
	(43		)	(48		)	(801		)	Total before tax
	(9		)	(10		)	(280		)	Income tax expense
	(34		)	(38		)	(521		)	Net income (loss)
Total amounts reclassified from AOCI	$	111		$	(69	)	$	(269	)	Net income (loss)

18**.** EMPLOYEE BENEFIT PLANS

Investment and Savings Plan

Substantially all U.S. employees of the Company are eligible to participate in The Hartford Investment and Savings Plan under which designated contributions may be invested in a variety of investments, including up to 10% in a fund consisting largely of common stock of The Hartford. The Company's contributions include a non-elective contribution of 2.0% of eligible

compensation and a dollar-for-dollar matching contribution of up to 6.0% of eligible compensation contributed by the employee each pay period. The Company also maintains a non-qualified savings plan, The Hartford Excess Savings Plan, with the dollar-for-dollar matching contributions of employee compensation in excess of the amount that can be contributed under the tax-qualified Investment and Savings Plan. An employee's eligible compensation includes overtime and bonuses but for the

F-84

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Investment and Savings Plan and Excess Savings Plan combined, is limited to $1 annually. The total cost to The Hartford for these plans was approximately $156, $134 and $113 for the years ended December 31, 2019, 2018 and 2017, respectively.

Additionally, The Hartford has established defined contribution pension plans for certain employees of the Company’s international subsidiaries. The cost to The Hartford for the years ended December 31, 2019, 2018 and 2017 for these plans was immaterial.

Post Retirement Benefit Plans

Defined Benefit Pension Plan- The Company maintains The Hartford Retirement Plan for U.S. Employees, a U.S. qualified defined benefit pension plan (“Pension Plan”) that covers substantially all U.S. employees hired prior to January 1, 2013. The Company also maintains non-qualified pension plans to provide retirement benefits previously accrued that are in excess of Internal Revenue Code limitations.

The Pension Plan includes two benefit formulas, both of which are frozen: a final average pay formula (for which all accruals ceased as of December 31, 2008) and a cash balance formula for which benefit accruals ceased as of December 31, 2012, although interest will continue to accrue to existing cash balance formula account balances. Employees who were participants as of December 31, 2012 continue to earn vesting credit with respect to their frozen accrued benefits if they continue to work. The interest crediting rate on the cash balance plan is the greater of the average annual yield on 10-year U.S. Treasury Securities or 3.3%. The Hartford Excess Pension Plan II, the Company's non-qualified excess pension benefit plan for certain highly compensated employees, is also frozen.

Group Retiree Health Plan- The Company provides certain health care and life insurance benefits for eligible retired employees. The Company’s contribution for health care benefits will depend upon the retiree’s date of retirement and years of service. In addition, the plan has a defined dollar cap for certain retirees which limits average Company contributions. The Hartford has prefunded a portion of the health care obligations through a trust fund where such prefunding can be accomplished on a tax effective basis. Beginning January 1, 2017, for retirees 65 and older who were participating in the Retiree PPO Medical Plan, the Company funds the cost of medical and dental health care benefits through contributions to a Health Reimbursement Account and covered individuals can access a variety of insurance plans from a health care exchange. Effective January 1, 2002, Company-subsidized retiree medical, retiree dental and retiree life insurance benefits were eliminated for employees with original hire dates with the Company on or after January 1, 2002. The Company also amended its postretirement medical, dental and life insurance coverage plans to no longer provide subsidized coverage for employees who retired on or after January 1, 2014.

Assumptions

Pursuant to accounting principles related to the Company’s pension and other postretirement obligations to employees under its various benefit plans, the Company is required to make a significant number of assumptions in order to calculate the related liabilities and expenses each period. The two economic assumptions that have the most impact on pension and other postretirement expense under the defined benefit pension plan and group retiree health plan are the discount rate and the

expected long-term rate of return on plan assets. The assumed discount rates and yield curve is based on high-quality fixed income investments consistent with the maturity profile of the expected liability cash flows. Based on all available market and industry information, it was determined that 3.33% and 3.15% were the appropriate discount rates as of December 31, 2019 to calculate the Company’s pension and other postretirement obligations, respectively.

The expected long-term rate of return considers the actual compound rates of return earned over various historical time periods. The Company also considers the investment volatility, duration and total returns for various time periods related to the characteristics of the pension obligation, which are influenced by the Company's workforce demographics. In addition, for the pension plan, the Company anticipates an allocation of approximately 60% in fixed income securities and 40% in non fixed income securities (global equities, hedge funds and private market alternatives) to derive an expected long-term rate of return. For the other post-retirement plans, the Company anticipates an allocation of approximately 70% in fixed income securities and 30% in non fixed income securities. Based upon these analyses, management determined the long-term rate of return assumption to be 6.45% and 6.00% for the Company's pension and other postretirement obligations, respectively, for the year ended December 31, 2019 and 6.60% for both pension and other postretirement obligations for the year ended December 31, 2018. To determine the Company's 2020 expense, the Company has assumed an expected long-term rate of return on plan assets of 6.00% and 5.60% for the Company's pension and other post retirement obligations, respectively.

Weighted Average Assumptions Used in Calculating the Benefit Obligations and the Net Amount Recognized

	Pension Benefits				Other Postretirement Benefits
	For the years ended December 31,
	2019		2018		2019		2018
Discount rate	3.33	%	4.35	%	3.15	%	4.23	%

Weighted Average Assumptions Used in Calculating the Net Periodic Benefit Cost for Pension Plans

	For the years ended December 31,
	2019		2018		2017
Discount rate	4.35	%	3.73	%	4.22	%
Expected long-term rate of return on plan assets	6.45	%	6.60	%	6.60	%

F-85

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Weighted Average Assumptions Used in Calculating the Net Periodic Benefit Cost for Other Postretirement Plans

	For the years ended December 31,
	2019		2018		2017
Discount rate	4.23	%	3.55	%	3.97	%
Expected long-term rate of return on plan assets	6.00	%	6.60	%	6.60	%

Assumed Health Care Cost Trend Rates

	For the years ended December 31,
	2019		2018		2017
Pre-65 health care cost trend rate	7.00	%	6.50	%	6.75	%
Post-65 health care cost trend rate	N/A		N/A		N/A
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.50	%	4.50	%	4.50	%
Year that the rate reaches the ultimate trend rate	2033		2028		2028

Obligations and Funded Status

The following tables set forth a reconciliation of beginning and ending balances of the benefit obligation and fair value of plan assets, as well as the funded status of the Company's defined benefit pension and postretirement health care and life insurance benefit plans. International plans represent an immaterial percentage of total pension assets, liabilities and expense and, for reporting purposes, are combined with domestic plans.

Change in Benefit Obligation

	Pension Benefits						Other Postretirement Benefits
	For the years ended December 31,
	2019			2018			2019			2018
Benefit obligation — beginning of year	$	4,000		$	4,376		$	220		$	256
Service cost	4			4			—			—
Interest cost	159			142			8			7
Plan participants’ contributions	—			—			13			11
Actuarial loss (gain)	48			(6		)	6			—
Amendments	—			—			(2		)	—
Changes in assumptions	488			(329		)	19			(11		)
Benefits and expenses paid	(201		)	(186		)	(41		)	(45		)
Retiree drug subsidy	—			—			—			2
Foreign exchange adjustment	—			(1		)	—			—
Benefit obligation — end of year	$	4,498		$	4,000		$	223		$	220

Changes in assumptions in 2019 primarily included a $508 increase in the benefit obligation for pension benefits as a result of a decrease in the discount rate from 4.35% as of the December 31, 2018 valuation to 3.33% as of the December 31, 2019 valuation. Changes in assumptions in 2018 included a $281 decrease in the benefit obligation for pension benefits as a result of an increase in the discount rate from 3.73% as of the December 31, 2017 valuation to 4.35% as of the December 31, 2018 valuation.

The cash balance plan pension benefit obligation was $420 and $412 as of December 31, 2019 and 2018, respectively. The interest crediting rate was 3.30% in 2019, 2018, and 2017.

On June 30, 2017, the Company transferred invested assets and cash from plan assets to purchase a group annuity contract that transferred approximately $1.6 billion of the Company's outstanding pension obligations related to certain U.S. retirees, terminated vested participants and beneficiaries. As a result of this transaction, the Company recognized a pre-tax settlement charge of $750. The settlement charge was included in the corporate category for segment reporting.

F-86

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Change in Plan Assets

	Pension Benefits						Other Postretirement Benefits
	For the years ended December 31,
	2019			2018			2019			2018
Fair value of plan assets — beginning of year	$	3,344		$	3,592		$	85		$	114
Actual return on plan assets	701			(172		)	12			(2		)
Employer contributions [1]	70			103			—			—
Benefits paid [2]	(176		)	(161		)	(22		)	(27		)
Expenses paid	(26		)	(17		)	—			—
Foreign exchange adjustment	1			(1		)	—			—
Fair value of plan assets — end of year	$	3,914		$	3,344		$	75		$	85
Funded status — end of year	$	(584	)	$	(656	)	$	(148	)	$	(135	)

[1]	Employer contributions in 2019 and 2018 to the U.S. qualified defined benefit pension plan were discretionary, made in cash, and did not include contributions of the Company’s common stock.

[2]	Other postretirement benefits paid represent non-key employee postretirement medical benefits paid from the Company's prefunded trust fund.

The fair value of assets for pension benefits, and hence the funded status, presented in the table above excludes assets of $161 and $139 as of December 31, 2019 and 2018, respectively, held in rabbi trusts and designated for the non-qualified pension plans. The assets do not qualify as plan assets; however, the assets are available to pay benefits for certain retired, terminated and active participants. Such assets are available to the Company’s general creditors in the event of insolvency. The rabbi trust assets consist of equity and fixed income investments. To the extent the fair value of these rabbi trusts were included in the table above, pension plan assets would have been $4,075 and $3,483 as of December 31, 2019 and 2018, respectively, and the funded status of pension benefits would have been $(423) and $(517) as of December 31, 2019 and 2018, respectively.

Defined Benefit Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets

	As of December 31,
	2019			2018
Projected benefit obligation	$	4,498		$	4,000
Accumulated benefit obligation	$	4,498		$	4,000
Fair value of plan assets	$	3,914		$	3,344

Amounts Recognized in the Consolidated Balance Sheets

	Pension Benefits						Other Postretirement Benefits
	As of December 31,
	2019			2018			2019			2018
Other liabilities	$	584		$	656		$	148		$	135

Components of Net Periodic Benefit Cost (Benefit) and Other Amounts Recognized in Other Comprehensive Income (Loss)

As a result of the pension settlement, in 2017, the Company recognized a pre-tax settlement charge of $750 ($488 net of tax) and a reduction to stockholders' equity of $144.

In connection with this transaction, the Company made a contribution of $280 in September 2017 to the U.S. qualified pension plan in order to maintain the plan's pre-transaction funded status.

Beginning with the first quarter of 2017, the Company adopted the full yield curve approach in the estimation of the interest cost component of net periodic benefit costs for its qualified and non-qualified pension plans and the postretirement benefit plan. The full yield curve approach applies the specific spot rates along the yield curve that are used in its determination of the projected benefit obligation at the beginning of the year. The change has been made to provide a better estimate of the interest cost component of net periodic benefit cost by better aligning projected benefit cash flows with corresponding spot rates on the yield curve rather than using a single weighted average discount rate derived from the yield curve as had been done historically.

This change does not affect the measurement of the Company's total benefit obligations as the change in the interest cost in net income is completely offset in the actuarial (gain) loss reported for the period in other comprehensive income. The change reduced the before tax interest cost component of net periodic benefit cost by $32 for the year ended December 31, 2017. The discount rate being used to measure interest cost was 3.58% for the period from January 1, 2017 to June 30, 2017 and 3.37% for the period from July 1, 2017 to December 31, 2017 for the qualified pension plan, 3.55% for the non-qualified pension plan, and 3.13% for the postretirement benefit plan. Under the Company's historical estimation approach, the weighted average discount rate for the interest cost component would have been 4.22% for the period from January 1, 2017 to June 30, 2017 and 3.92% for the period from July 1, 2017 to December 31, 2017 for the qualified pension plan, 4.19% for the non-qualified pension plan and 3.97% for the postretirement benefit plan. The Company accounted for this change as a change in estimate, and accordingly, has recognized the effect prospectively beginning in 2017.

F-87

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Net Periodic Cost (Benefit)

	Pension Benefits									Other Postretirement Benefits
	For the years ended December 31,
	2019			2018			2017			2019			2018			2017
Service cost	$	4		$	4		$	4		$	—		$	—		$	—
Interest cost	159			142			170			8			7			8
Expected return on plan assets	(226		)	(227		)	(267		)	(4		)	(7		)	(8		)
Amortization of prior service credit	—			—			—			(7		)	(7		)	(7		)
Amortization of actuarial loss	44			49			56			6			6			5
Settlements	—			—			750			—			—			—
Net periodic cost (benefit)	$	(19	)	$	(32	)	$	713		$	3		$	(1	)	$	(2	)

Amounts Recognized in Other Comprehensive Income (Loss)

	Pension Benefits									Other Postretirement Benefits
	For the years ended December 31,
	2019			2018			2017			2019			2018			2017
Amortization of actuarial loss	$	44		$	49		$	56		$	6		$	6		$	5
Settlement loss	—			—			750			—			—			—
Amortization of prior service credit	—			—			—			(7		)	(6		)	(7		)
Net loss arising during the year	(88		)	(91		)	(209		)	(18		)	3			(12		)
Prior service cost (credit)	—			—			—			2			—			—
Total	$	(44	)	$	(42	)	$	597		$	(17	)	$	3		$	(14	)

Amounts in Accumulated Other Comprehensive Income (Loss), Before Tax, not yet Recognized as Components of Net Periodic Benefit Cost

	Pension Benefits									Other Postretirement Benefits
	As of December 31,
	2019			2018			2017			2019			2018			2017
Net loss	$	(2,052	)	$	(2,008	)	$	(1,966	)	$	(132	)	$	(120	)	$	(129	)
Prior service credit	—			—			—			67			72			78
Total	$	(2,052	)	$	(2,008	)	$	(1,966	)	$	(65	)	$	(48	)	$	(51	)

The pension settlement transaction resulted in a decrease to unrecognized net loss of $750 in 2017.

Pension Plan Assets

Investment Strategy and Target Allocation

The overall investment strategy of the Pension Plan is to maximize total investment returns to provide sufficient funding for present and anticipated future benefit obligations within the constraints of a prudent level of portfolio risk and diversification. With respect to asset management, the oversight responsibility of the Pension Plan rests with The Hartford’s Pension Fund Trust and Investment Committee composed of individuals whose responsibilities include establishing overall objectives and the setting of investment policy; selecting appropriate investment options and ranges; reviewing the asset allocation mix and asset allocation targets on a regular basis; and monitoring performance to determine whether or not the rate of return objectives are being met and that policy and guidelines are being followed. The Company believes that the asset allocation decision will be the single most important factor determining the long-term performance of the Pension Plan.

Target Asset Allocation

	Pension Plans				Other Postretirement Plans
	Minimum		Maximum		Minimum		Maximum
Equity securities	5	%	35	%	15	%	45	%
Fixed income securities	50	%	70	%	55	%	85	%
Alternative assets	—	%	45	%	—	%	—	%

Divergent market performance among different asset classes may, from time to time, cause the asset allocation to deviate from the desired asset allocation ranges. The asset allocation mix is reviewed on a periodic basis. If it is determined that an asset allocation mix rebalancing is required, future portfolio additions and withdrawals will be used, as necessary, to bring the allocation within tactical ranges.

The Pension Plan invests in commingled funds and partnerships managed by unaffiliated managers to gain exposure to emerging

F-88

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

markets, equity, hedge funds and other alternative investments. These portfolios encompass multiple asset classes reflecting the current needs of the Pension Plan, the investment preferences and risk tolerance of the Pension Plan and the desired degree of diversification. These asset classes include publicly traded equities, bonds and alternative investments and are made up of individual investments in cash and cash equivalents, equity securities, debt securities, asset-backed securities, mortgage

loans and hedge funds. Hedge fund investments represent a diversified portfolio of partnership investments in a variety of strategies.

In addition, the Company uses U.S. Treasury bond futures contracts and U.S. Treasury STRIPS in a duration overlay program to adjust the duration of Pension Plan assets to better match the duration of the benefit obligation.

Pension Plan Assets at Fair Value

	As of December 31, 2019													As of December 31, 2018
Asset Category	Level 1			Level 2			Level 3			Total				Level 1			Level 2			Level 3			Total
Short-term investments:	$	34		$	54		$	—		$	88			$	50		$	60		$	—		$	110
Fixed Income Securities:
Corporate	—			2,058			27			2,085				—			1,663			14			1,677
RMBS	—			61			—			61				—			62			1			63
U.S. Treasuries	—			101			—			101				10			120			—			130
Foreign government	—			17			1			18				—			15			2			17
CMBS	—			32			—			32				—			22			—			22
Other fixed income [1]	—			96			1			97				—			52			1			53
Mortgage Loans	—			—			131			131				—			—			133			133
Equity Securities:
Domestic	429			1			—			430				376			3			—			379
International	261			—			—			261				303			—			—			303
Total pension plan assets at fair value, in the fair value hierarchy [2]	$	724		$	2,420		$	160		$	3,304			$	739		$	1,997		$	151		$	2,887
Other Investments, at net asset value [3]:
Private Market Alternatives										358													272
Hedge funds										212													186
Total pension plan assets at fair value.	$	724		$	2,420		$	160		$	3,874			$	739		$	1,997		$	151		$	3,345

[1]	Includes ABS, municipal bonds, and CDOs.

[2]	Excludes approximately $40 and $1 as of December 31, 2019 and 2018, respectively, of investment receivables net of investment payables that are excluded from this disclosure requirement because they are trade receivables in the ordinary course of business where the carrying amount approximates fair value.

[3]	Investments that are measured at net asset value per share or an equivalent and have not been classified in the fair value hierarchy.

The tables below provide fair value level 3 rollforwards for the Pension Plan Assets for which significant unobservable inputs ("Level 3") are used in the fair value measurement on a recurring basis. The Pension Plan classifies the fair value of financial instruments within Level 3 if there are no observable markets for

the instruments or, in the absence of active markets, if one or more of the significant inputs used to determine fair value are based on the Pension Plan’s own assumptions. Therefore, the gains and losses in the tables below include changes in fair value due to both observable and unobservable factors.

F-89

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Assets	Corporate			RMBS			Foreign government			Mortgage loans			Other [1]			Totals
Fair Value as of January 1, 2019	$	14		$	1		$	2		$	133		$	1		$	151
Realized gains,net	3			—			—			—			—			3
Changes in unrealized gains, net	2			—			—			4			—			6
Purchases	7			—			—			—			—			7
Settlements	—			—			—			—			—			—
Sales	(3		)	(1		)	(1		)	(6		)	—			(11		)
Transfers into Level 3	4			—			—			—			—			4
Transfers out of Level 3	—			—			—			—			—			—
Fair Value as of December 31, 2019	$	27		$	—		$	1		$	131		$	1		$	160
Fair Value as of January 1, 2018	$	14		$	2		$	1		$	140		$	4		$	161
Realized gains,net	—			—			—			—			—			—
Changes in unrealized (losses) gains, net	(1		)	—			—			(1		)	—			(2		)
Purchases	5			—			1			—			—			6
Settlements	—			—			—			—			—			—
Sales	(4		)	(1		)	—			(6		)	(3		)	(14		)
Transfers into Level 3	—			—			—			—			—			—
Transfers out of Level 3	—			—			—			—			—			—
Fair Value as of December 31, 2018	$	14		$	1		$	2		$	133		$	1		$	151

[1]	"Other" includes U.S. Treasuries, Other fixed income and CMBS investments.

During the year ended December 31, 2019, transfers into and (out) of Level 3 are primarily attributable to the appearance of or lack thereof of market observable information and the re-evaluation of the observability of pricing inputs.

During the year ended December 31, 2018, transfers in and/or (out) of Level 3 are primarily attributable to the availability of

market observable information and the re-evaluation of the observability of pricing inputs.

There was less than $1 in Company common stock included in the Pension Plan’s assets as of December 31, 2019 and 2018.

Other Postretirement Plan Assets at Fair Value

	As of December 31, 2019													As of December 31, 2018
Asset Category	Level 1			Level 2			Level 3			Total				Level 1			Level 2			Level 3			Total
Short-term investments	$	3		$	—		$	—		$	3			$	4		$	—		$	—		$	4
Fixed Income Securities:
Corporate	—			18			—			18				—			19			—			19
RMBS	—			12			—			12				—			15			—			15
U.S. Treasuries	—			20			—			20				6			13			—			19
Foreign government	—			—			—			—				—			1			—			1
CMBS	—			1			—			1				—			2			—			2
Other fixed income	—			2			—			2				—			2			—			2
Equity Securities:
Large-cap	19						—			19				23			—			—			23
Total other postretirement plan assets at fair value [1]	$	22		$	53		$	—		$	75			$	33		$	52		$	—		$	85

[1]	Excludes approximately $1 of investment payables net of investment receivables as of December 31, 2018 that are excluded from this disclosure requirement because they are trade receivables in the ordinary course of business where the carrying amount approximates fair value.

For other postretirement plan Level 3 assets, the fair value of corporate securities decreased from $1 as of December 31, 2017 to $0 as of December 31, 2018 due to $1 in sales.

There was no Company common stock included in the other postretirement benefit plan assets as of December 31, 2019 and 2018.

F-90

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Concentration of Risk

In order to minimize risk, the Pension Plan maintains a listing of permissible and prohibited investments. In addition, the Pension Plan has certain concentration limits and investment quality requirements imposed on permissible investment options. Permissible investments include U.S. equity, international equity, alternative asset and fixed income investments including derivative instruments. Permissible derivative instruments include futures contracts, options, swaps, currency forwards, caps or floors and may be used to control risk or enhance return but will not be used for leverage purposes.

Securities specifically prohibited from purchase include, but are not limited to: shares or fixed income instruments issued by The Hartford, short sales of any type within long-only portfolios, non-derivative securities involving the use of margin, leveraged floaters and inverse floaters, including money market obligations, natural resource real properties such as oil, gas or timber and precious metals.

Other than U.S. government and certain U.S. government agencies backed by the full faith and credit of the U.S. government, the Pension Plan does not have any material exposure to any concentration risk of a single issuer.

Expected Employer Contributions

The Company does not have a 2020 required minimum funding contribution for the U.S. qualified defined benefit pension plan.

The Company has not determined whether, and to what extent, contributions may be made to the U. S. qualified defined benefit pension plan in 2020. The Company will monitor the funded status of the U.S. qualified defined benefit pension plan during 2020 to make this determination.

Benefit Payments

Amounts of Benefits Expected to be Paid over the next Ten Years from Pension and other Postretirement Plans as of December 31, 2019

	Pension Benefits			Other Postretirement Benefits
2020	$	240		$	25
2021	248			23
2022	254			20
2023	256			18
2024	258			16
2025 - 2029	1,291			63
Total	$	2,547		$	165

19**.** STOCK COMPENSATION PLANS

The Company's stock-based compensation plans are described below. Shares issued in satisfaction of stock-based compensation may be made available from authorized but unissued shares, shares held by the Company in treasury or from shares purchased in the open market. In 2019, 2018 and 2017, the Company issued shares from treasury in satisfaction of stock-based compensation.

Stock-based compensation expense, included in insurance operating costs and other expenses in the consolidated statement of operations, was as follows:

Stock-Based Compensation Expense

	For the years ended December 31,
	2019			2018			2017
Stock-based compensation plans expense	$	125		$	130		$	116
Income tax benefit	(21		)	(27		)	(41		)
Excess tax benefit on awards vested, exercised and expired	(6		)	(5		)	(15		)
Total stock-based compensation plans expense, net of tax [1]	$	98		$	98		$	60

[1]	The increase in stock-based compensation plans expense, net of tax in 2018 is primarily related to the reduction of the U.S. federal corporate tax rate from 35% to 21%.

The Company did not capitalize any cost of stock-based compensation. As of December 31, 2019, the total compensation cost related to non-vested awards not yet recognized was $70, which is expected to be recognized over a weighted average period of 2 years.

In the second quarter of 2018, The Hartford modified the terms of the portion of its outstanding 2016 and 2017 performance share awards that are based on actual versus targeted return on equity over the performance period. The modification eliminated the benefit to return on equity that arose from the charge against earnings in 2017 driven by the effect of the lower corporate income tax rate on the carrying value of net deferred tax assets. This modification had no impact on compensation cost recognized over the vesting period since compensation cost based on the original performance share conditions is projected to be higher than what the cost would be based on the performance share conditions as modified.

Stock Plan

Future stock-based awards may be granted under The Hartford's 2014 Incentive Stock Plan (the "Incentive Stock Plan") other than the Subsidiary Stock Plan and the Employee Stock Purchase Plan described below. The Incentive Stock Plan provides for awards to be granted in the form of non-qualified or incentive stock options qualifying under Section 422 of the Internal Revenue Code, stock appreciation rights, performance shares, restricted stock or restricted stock units, or any other form of stock-based award. The maximum number of shares, subject to adjustments set forth in the Incentive Stock Plan, that may be issued to Company employees and third party service providers during the 10-year duration of the Incentive Stock Plan is 12,000,000 shares. If any award under an earlier incentive stock plan is forfeited, terminated, surrendered, exchanged, expires unexercised, or is settled in cash in lieu of stock (including to effect tax withholding) or for the net issuance of a lesser number of shares than the number subject to the award, the shares of stock subject to such award (or the relevant portion thereof) shall be available for

F-91

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

awards under the Incentive Stock Plan and such shares shall be added to the maximum limit. As of December 31, 2019, there were 5,268,108 shares available for future issuance.

The fair values of awards granted under the Incentive Stock Plan are measured as of the grant date and expensed ratably over the awards’ vesting periods, generally 3 years. For stock option awards to retirement-eligible employees the Company recognizes the expense over a period shorter than the stated vesting period because the employees receive accelerated vesting upon retirement and therefore the vesting period is considered non-substantive. Beginning with awards granted in 2017, employees with restricted stock units and performance shares receive accelerated vesting upon meeting certain retirement eligibility criteria.

Stock Option Awards

Under the Incentive Stock Plan, options granted have an exercise price at least equal to the market price of the Company’s common stock on the date of grant, and an option’s maximum term is not to exceed 10 years. Options generally become exercisable over a period of three years commencing one year from the date of grant. Certain other options become exercisable at the later of three years from the date of grant or upon specified market appreciation of the Company's common shares.

The Company uses a hybrid lattice/Monte-Carlo based option valuation model (the “Plan Valuation Model”) that incorporates the possibility of early exercise of options into the valuation. The Plan Valuation Model also incorporates the Company’s historical termination and exercise experience to determine the option value.

The Plan Valuation Model incorporates ranges of assumptions for inputs, and those ranges are disclosed below. The term structure of volatility is generally constructed utilizing implied volatilities from exchange-traded options, CPP warrants related to the Company’s stock, historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercise and employee termination within the Plan Valuation Model, and accommodates variations in employee preference and risk-tolerance by segregating the grantee pool into a series of behavioral cohorts and conducting a fair valuation for each cohort individually. The expected term of options granted is derived from the output of the option Plan Valuation Model and represents, in a mathematical sense, the period of time that options are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Constant Maturity Treasury yield curve in effect at the time of grant.

Stock Options Valuation Assumptions

	For the years ended December 31,
	2019				2018				2017
Expected dividend yield	2.5%				1.8%				1.9%
Expected annualized spot volatility	20.7	%	-	36.7%	20.8	%	-	36.5%	21.8	%	-	37.9%
Weighted average annualized volatility	29.3%				29.0%				29.5%
Risk-free spot rate	2.4	%	-	2.6%	1.5	%	-	2.9%	0.4	%	-	2.4%
Expected term	5.9 years				5.7 years				5.0 years

Non-qualified Stock Option Activity Under the Incentive Stock Plan

	Number of Options (in thousands)		Weighted Average Exercise Price			Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
	For the year ended December 31, 2019
Outstanding at beginning of year	5,490		$	40.84
Granted	1,089		$	49.01
Exercised	(733	)	$	32.29
Forfeited	—		$	—
Expired	—		$	—
Outstanding at end of year	5,846		$	43.43		6.3 years	$	101
Outstanding, fully vested and expected to vest	5,836		$	64.77		6.3 years	$	98
Exercisable at end of year	3,921		$	40.00		5.2 years	$	81

Aggregate intrinsic value represents the value of the Company's closing stock price on the last trading day of the period in excess of the exercise price multiplied by the number of options outstanding or exercisable. The aggregate intrinsic value excludes the effect of stock options that have a zero or negative intrinsic value. The weighted average grant-date fair value per share of options granted during the years ended December 31, 2019,

2018, and 2017 was $11.71, $14.04 and $12.38, respectively. The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 was $16, $14, and $8, respectively.

F-92

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Share Awards

Share awards granted under the Incentive Stock Plan and outstanding include restricted stock units and performance shares.

Restricted Stock and Restricted Stock Units

Restricted stock units are share equivalents that are credited with dividend equivalents. Dividend equivalents are accumulated and paid in incremental shares when the underlying units vest. Restricted stock are shares of The Hartford's common stock with restrictions as to transferability until vested. Restricted stock units and restricted stock awards are valued equal to the market price of the Company’s common stock on the date of grant. Generally, restricted stock units vest at the end of or over three years; certain restricted stock units vest at the end of five years. Beginning in 2017, restricted stock units vest at the earlier of an employee's retirement eligibility date or three years. Equity awards granted to non-employee directors generally vest in one year and were made in the form of restricted stock units in 2019, 2018 and 2017.

Performance Shares

Performance shares become payable within a range of 0% to 200% of the number of shares initially granted based upon the attainment of specific performance goals achieved at the end of

or over three years. While most performance shares vest at the end of or over three years, certain performance shares vest at the end of five years. Beginning in 2017, performance shares vest at the earlier of an employee's retirement eligibility date or three years.

Performance share awards that are not dependent on market conditions are valued equal to the market price of the Company's common stock on the date of grant less a discount for the absence of dividends. Stock-compensation expense for these performance share awards without market conditions is based on a current estimate of the number of awards expected to vest based on the performance level achieved and, therefore, may change during the performance period as new estimates of performance are available.

Other performance share awards or portions thereof have a market condition based upon the Company's total stockholder return relative to a group of peer companies within a period of three years from the date of grant. Stock compensation expense for these performance share awards is based on the number of awards expected to vest as estimated at the grant date and, therefore, does not change for changes in estimated performance. The Company uses a risk neutral Monte-Carlo Plan Valuation Model that incorporates time to maturity, implied volatilities of the Company and the peer companies, and correlations between the Company and the peer companies and interest rates.

Assumptions for Total Shareholder Return Performance Shares

	For the years ended December 31,
	2019				2018				2017
Volatility of common stock	19.4%				20.8%				20.3%
Average volatility of peer companies	16.0	%	-	27.0%	17.0	%	-	25.0%	15.0	%	-	25.0%
Average correlation coefficient of peer companies	50.0%				54.0%				60.0%
Risk-free spot rate	2.4%				2.4%				1.5%
Term	3.0 years				3.0 years				3.0 years

Total Share Awards

Non-vested Share Award Activity Under the Incentive Stock Plan

	Restricted Stock and Restricted Stock Units					Performance Shares
	Number of Shares (in thousands)		Weighted-Average Grant-Date Fair Value			Number of Shares (in thousands)		Weighted-Average Grant date Fair Value
Non-vested shares	For the year ended December 31, 2019
Non-vested at beginning of year	3,446		$	48.43		735		$	49.56
Granted	1,702		$	50.49		422		$	54.07
Performance based adjustment						391		$	48.89
Vested	(1,105	)	$	42.73		(739	)	$	48.89
Forfeited	(435	)	$	51.02		(49	)	$	50.12
Non-vested at end of year	3,608		$	50.85		760		$	52.34

The weighted average grant-date fair value per share of restricted stock units and restricted stock granted during the years ended December 31, 2019, 2018, and 2017 was $50.49, $53.11 and $48.90, respectively. The weighted average grant-date fair value per share of performance shares granted during

the years ended December 31, 2019, 2018, and 2017 was $54.07, $50.26 and $48.89, respectively.

The total fair value of shares vested during the years ended December 31, 2019, 2018 and 2017 was $102, $114 and $94,

F-93

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

respectively, based on actual or estimated performance factors. The Company did not make cash payments in settlement of stock compensation during the years ended December 31, 2019, 2018 and 2017.

Subsidiary Stock Plan

In 2013 the Company established a subsidiary stock-based compensation plan similar to The Hartford Incentive Stock Plan except that it awards non-public subsidiary stock as compensation. The Company recognized stock-based compensation plan expense of $11, $9 and $9 in the years ended December 31, 2019, 2018 and 2017, respectively, for the subsidiary stock plan. Upon employee vesting of subsidiary stock, the Company recognizes a noncontrolling equity interest. Employees are restricted from selling vested subsidiary stock to anyone other than the Company and the Company has discretion on the amount of stock to repurchase. Therefore, the subsidiary stock is classified as equity because it is not mandatorily redeemable. For the year ended December 31, 2019, the Company repurchased $8 in subsidiary stock.

Employee Stock Purchase Plan

The Company sponsors The Hartford Employee Stock Purchase Plan (“ESPP”). Under this plan, eligible employees of The Hartford purchase common stock of the Company at a discount rate of 5% of the market price per share on the last trading day of the offering period. Accordingly, the plan is a non-compensatory plan. Employees purchase a variable number of shares of stock through payroll deductions elected as of the beginning of the offering period. The Company may sell up to 15,400,000 shares of stock to eligible employees under the ESPP. As of December 31, 2019, there were 4,084,500 shares available for future issuance. During the years ended December 31, 2019, 2018 and 2017, 213,472 shares, 219,661 shares, and 204,533 shares were sold, respectively. The weighted average per share fair value of the discount under the ESPP was $2.82, $2.56 and $2.63 during the years ended December 31, 2019, 2018 and 2017, respectively. The fair value is estimated based on the 5% discount off the market price per share on the last trading day of the offering period.

20**.** LEASES

The Hartford has operating leases for real estate and equipment. The right-of-use asset as of December 31, 2019 was $191 and is included in property and equipment, net, in the Consolidated Balance Sheet. The lease liability as of December 31, 2019 was $201 and is included in other liabilities in the Consolidated Balance Sheet. Variable lease costs include changes in interest rates on variable rate leases primarily for automobiles.

Components of Lease Expense

	Year Ended December 31,
	2019
Operating lease cost	$	49
Short-term lease cost	2
Variable lease cost	1
Sublease income	(5		)
Total lease costs included in insurance operating costs and other expenses	$	47

The total rental expense recognized in accordance with prior lease guidance was $56 and $57 in 2018 and 2017, respectively, which excludes sublease rental income of $4 and $3 in 2018 and 2017, respectively.

Supplemental Operating Lease Information

	December 31, 2019
Operating cash flows for operating leases (for the twelve months ended)	$	50
Right-of-use asset obtained in exchange for new operating lease liabilities	42
Weighted-average remaining lease term in years for operating leases	6 years
Weighted-average discount rate for operating leases	3.5		%

Maturities of Operating Lease Liabilities as of December 31, 2019

	Operating Leases
2020	$	51
2021	40
2022	34
2023	31
2024	21
Thereafter	46
Total lease payments	223
Less: Discount on lease payments to present value	22
Total lease liability	$	201

During 2019, The Hartford entered into 5, 10, and 12 year operating leases for office space, which will result in additional right-of-use asset and lease liabilities of approximately $54. These leases commence in the first half of 2020.

F-94

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Future Minimum Lease Commitments as of December 31, 2018

	Operating Leases
2019	$	44
2020	36
2021	25
2022	18
2023	16
Thereafter	34
Total minimum lease payments [1]	$	173

[1]	Excludes expected future minimum sublease income of approximately $2*,* $1*,* $1 , $0 , $0 and $0 in 2019, 2020, 2021, 2022, 2023 and thereafter respectively.

The Company’s lease commitments consist primarily of lease agreements for office space, automobiles, and office equipment that expire at various dates.

21**.** BUSINESS DISPOSITIONS AND DISCONTINUED OPERATIONS

Sale of U.K. business

On May 10, 2017, the Company completed the sale of its U.K. property and casualty run-off subsidiaries, Hartford Financial Products International Limited and Downlands Liability Management Limited, in a cash transaction to Catalina Holdings U.K. Limited, for approximately $272, net of transaction costs. The Company's U.K. property and casualty run-off subsidiaries are included in the P&C Other Operations reporting segment. Revenues and earnings are not material to the Company's consolidated results of operations for the year ended December 31, 2017.

Major Classes of Assets and Liabilities Transferred by the Company to the Buyer in Connection with the Sale

	Carrying Value as of
	Closing
Assets
Cash and investments	$	669
Reinsurance recoverables and other	268
Total assets held for sale	937
Liabilities
Reserve for future policy benefits and unpaid loss and loss adjustment expenses	653
Other liabilities	12
Total liabilities held for sale	$	665

Sale of life and annuity business

On May 31, 2018, the Company’s wholly-owned subsidiary, Hartford Holdings, Inc, completed the sale of its life and annuity business to a group of investors led by Cornell Capital LLC, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial

Group, Pine Brook and J. Safra Group. Under the terms of the sale agreement signed December 3, 2017, the investor group formed a limited partnership, Hopmeadow Holdings LP, that acquired HLI, and its life and annuity operating subsidiaries, for cash of approximately $1.4 billion after a pre-closing dividend to The Hartford of $300. The Hartford received a 9.7% ownership interest in the limited partnership, valued at a cost of $164 as of the sale date. In addition, as part of the terms of the sale agreement, The Hartford reduced its long-term debt by $142 because the debt, which was issued by HLI, was included as part of the sale. Including cash proceeds and the retained equity interest and net of transaction costs, net proceeds for the sale were approximately $1.5 billion. The life and annuity operations met the criteria for reporting as discontinued operations and are reported in the Corporate category through the date of sale.

The Company recognized a loss on sale within discontinued operations of approximately $3.3 billion in 2017 and a reduction in loss on sale of $202 in 2018. The reduction in loss on sale in 2018 primarily resulted from the reclassification to retained earnings of $193 of tax effects stranded in AOCI due to the accounting for Tax Reform and a $141 increase in estimated retained tax benefits, primarily net operating loss carryovers, partially offset by $104 of operating income from discontinued operations during the period up until the closing date and a reclassification of $10 of net unrealized capital gains from AOCI to retained earnings. See Note 1 - Adoption of New Accounting Standards within Basis of Presentation and Significant Accounting Policies, for additional information about the reclassifications from AOCI to retained earnings. The estimated amount of retained net operating loss carryovers depends on the estimated tax basis of the business sold which increased subsequent to the date the Company entered into the sale agreement. At closing, stockholders’ equity was further reduced for the amount of AOCI of the life and annuity business, which was approximately $758, largely consisting of net unrealized gains on investments, net of shadow DAC. The AOCI balance was $1 billion as of December 31, 2017.

Cash inflows and outflows from and to the life and annuity business after closing were immaterial to the overall inflows and

F-95

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

outflows of the Company. Additionally, the revenues and expenses presented in continuing operations related to pre-disposal operations were immaterial.

The Company will continue to manage invested assets of the life and annuity business sold in May 2018 for an initial term of five years and provide transition services for up to 24 months.

The Hartford reported its 9.7% ownership interest in Hopmeadow Holdings LP, which is accounted for under the equity method, in other assets in the Consolidated Balance Sheet. The Hartford recognizes its share of income in other revenues in the Consolidated Statement of Operations on a three month delay, when financial information from the investee becomes available. The Company recognized $66, before tax, of income in 2019. Cash inflows for dividends received from Hopmeadow Holdings LP were $67 in 2019. Other cash inflows and outflows from and to the life and annuity business after closing were immaterial to the overall inflows and outflows of the Company.

Major Classes of Assets and Liabilities Transferred to the Buyer in Connection with the Sale

	Carrying Value as of
	Closing			December 31, 2017 [2]
Assets
Cash and investments	$	27,058		$	30,135
Reinsurance recoverables	20,718			20,785
Loss accrual [1]	(3,044		)	(3,257		)
Other assets	2,907			1,439
Separate account assets	110,773			115,834
Total assets held for sale	$	158,412		$	164,936
Liabilities
Reserve for future policy benefits and unpaid loss and loss adjustment expenses	$	14,308		$	14,482
Other policyholder funds and benefits payable	28,680			29,228
Long-term debt	142			142
Other liabilities	2,222			2,756
Separate account liabilities	110,773			115,834
Total liabilities held for sale	$	156,125		$	162,442

[1]	Represents the estimated accrued loss on sale of the Company's life and annuity business.

[2]	Classified as assets and liabilities held for sale.

Reconciliation of the Major Line Items Constituting Pretax Profit (Loss) of Discontinued Operations

	For the years ended December 31,
	2018			2017
Revenues
Earned premiums	$	39		$	106
Fee income and other	382			912
Net investment income	519			1,289
Net realized capital losses	(68		)	(53		)
Total revenues	872			2,254
Benefits, losses and expenses
Benefits, losses and loss adjustment expenses	535			1,416
Amortization of DAC	58			45
Insurance operating costs and other expenses [1]	157			368
Total benefits, losses and expenses	750			1,829
Income before income taxes	122			425
Income tax expense	2			37
Income from operations of discontinued operations, net of tax	120			388
Net realized capital gain (loss) on disposal, net of tax	202			(3,257		)
Income (loss) from discontinued operations, net of tax	$	322		$	(2,869	)

[1]Corporate allocated overhead has been included in continuing operations.

Cash Flows from Discontinued Operations included in the Consolidated Statement of Cash Flows

	Year Ended December 31,
	2018			2017
Net cash provided by operating activities from discontinued operations	$	603		$	797
Net cash provided by investing activities from discontinued operations	$	463		$	1,466
Net cash used in financing activities from discontinued operations [1]	$	(737	)	$	(884	)
Cash paid for interest	$	—		$	11

[1]	Excludes return of capital to parent of $619 and $1,396 for 2018 and 2017*, respectively.*

F-96

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

22**.** QUARTERLY RESULTS (UNAUDITED)

Current and Historical Quarterly Results of the Company

	Three months ended
	March 31,							June 30,							September 30,							December 31,
	2019			2018				2019			2018				2019			2018				2019			2018
Revenues	$	4,940		$	4,691			$	5,092		$	4,789			$	5,347		$	4,842			$	5,361		$	4,633
Benefits, losses and expenses	4,165			4,172				4,636			4,252				4,694			4,312				4,685			4,466
Income from continuing operations, net of tax	630			428				372			434				535			427				548			196
Income from discontinued operations, net of tax	—			169				—			148				—			5				—			—
Net income	$	630		$	597			$	372		$	582			$	535		$	432			$	548		$	196
Less: Preferred stock dividends	5			—				—			—				11			—				5			6
Net income available to common stockholders	$	625		$	597			$	372		$	582			$	524		$	432			$	543		$	190
Basic
Income from continuing operations, net of tax, available to common stockholders per share [1]	$	1.74		$	1.20			$	1.03		$	1.21			$	1.45		$	1.19			$	1.51		$	0.53
Income from discontinued operations, net of tax per share	$	—		$	0.47			$	—		$	0.41			$	—		$	0.01			$	—		$	—
Net income per common share available to common stockholders	$	1.74		$	1.67			$	1.03		$	1.62			$	1.45		$	1.20			$	1.51		$	0.53
Diluted
Income from continuing operations, net of tax available to common stockholders per share [1]	$	1.71		$	1.18			$	1.02		$	1.19			$	1.43		$	1.17			$	1.49		$	0.52
Income from discontinued operations, net of tax per share	$	—		$	0.46			$	—		$	0.41			$	—		$	0.02			$	—		$	—
Net income per common share available to common stockholders	$	1.71		$	1.64			$	1.02		$	1.60			$	1.43		$	1.19			$	1.49		$	0.52

[1]	Income from continuing operations, net of tax, available to common stockholders includes the impact of preferred stock dividends.

F-97

Part IV - Schedule I. Summary of Investments - Other Investments in Affiliates

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE I

SUMMARY OF INVESTMENTS — OTHER THAN INVESTMENTS IN AFFILIATES

(in millions)

	As of December 31, 2019
Type of Investment	Cost			Fair Value			Amount at which shown on Balance Sheet
Fixed Maturities
Bonds and notes
U.S. government and government agencies and authorities (guaranteed and sponsored)	$	5,478		$	5,644		$	5,644
States, municipalities and political subdivisions	8,763			9,498			9,498
Foreign governments	1,057			1,123			1,123
Public utilities	2,019			2,147			2,147
All other corporate bonds	14,416			15,249			15,249
All other mortgage-backed and asset-backed securities	8,345			8,487			8,487
Total fixed maturities, available-for-sale	40,078			42,148			42,148
Fixed maturities, at fair value using fair value option	11			11			11
Total fixed maturities	40,089			42,159			42,159
Equity Securities
Common stocks
Industrial, miscellaneous and all other	1,471			1,471			1,471
Non-redeemable preferred stocks	186			186			186
Total equity securities, at fair value	1,657			1,657			1,657
Mortgage loans	4,215			4,350			4,215
Futures, options and miscellaneous	376			320			320
Short-term investments	2,917			2,921			2,921
Investments in partnerships and trusts	1,758						1,758
Total investments	$	51,012					$	53,030

S-1

Part IV - Schedule II. Condensed Financial Information of the Hartford Financial Services, Inc.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF THE HARTFORD FINANCIAL SERVICES GROUP, INC.

(Registrant)

(in millions)

	As of December 31,
Condensed Balance Sheets	2019			2018
Assets
Fixed maturities, available-for-sale, at fair value	$	294		$	785
Equity securities, at fair value	31			30
Other investments	159			103
Short-term investments	874			2,603
Cash	—			3
Investment in affiliates	21,243			15,074
Deferred income taxes	561			992
Unamortized issue costs	2			3
Other assets	71			78
Total assets	$	23,235		$	19,671
Liabilities and Stockholders’ Equity
Net payable to affiliates	$	1,602		$	1,530
Short-term debt (includes current maturities of long-term debt)	500			413
Long-term debt	4,348			4,265
Other liabilities	515			362
Total liabilities	6,965			6,570
Total stockholders’ equity	16,270			13,101
Total liabilities and stockholders’ equity	$	23,235		$	19,671

S-2

Part IV - Schedule II. Condensed Financial Information of the Hartford Financial Services, Inc.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. (continued)

(Registrant)

(In millions)

	For the years ended December 31,
Condensed Statements of Operations and Comprehensive Income	2019			2018			2017
Net investment income	$	50		$	41		$	15
Net realized capital gains (losses)	3			37			(1		)
Total revenues	53			78			14
Interest expense	255			298			316
Loss on extinguishment of debt	68			6			—
Pension settlement	—			—			750
Other expense (income)	15			(6		)	1
Total expenses	338			298			1,067
Loss before income taxes and earnings of subsidiaries	(285		)	(220		)	(1,053		)
Income tax expense (benefit)	(60		)	(630		)	106
Income (loss) before earnings of subsidiaries	(225		)	410			(1,159		)
Earnings (losses) of subsidiaries [1]	2,310			1,397			(1,972		)
Net income (loss)	2,085			1,807			(3,131		)
Other comprehensive income (loss) - parent company:
Change in net gain or loss on cash-flow hedging instruments	(24		)	8			2
Change in net unrealized gain or loss on securities	5			(271		)	280
Change in pension and other postretirement plan adjustments	(35		)	(26		)	107
Other comprehensive income (loss), net of taxes before other comprehensive income of subsidiaries	(54		)	(289		)	389
Other comprehensive income (loss) of subsidiaries	1,685			(1,948		)	611
Total other comprehensive income (loss)	1,631			(2,237		)	1,000
Total comprehensive income (loss)	$	3,716		$	(430	)	$	(2,131	)

[1]2017 includes amounts for the life and annuity business accounted for as held for sale and operating results for that business included in discontinued operations in the Consolidated Financial Statements. See Note 21 – Business Dispositions and Discontinued Operations of Notes to Consolidated Financial Statements.

S-3

Part IV - Schedule II. Condensed Financial Information of the Hartford Financial Services, Inc.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE II

CONDENSED FINANCIAL INFORMATION OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. (continued)

(Registrant)

(In millions)

	For the years ended December 31,
Condensed Statements of Cash Flows	2019			2018			2017
Operating Activities
Net income (loss)	$	2,085		$	1,807		$	(3,131	)
Loss on extinguishment of debt	68			6			—
Dividends received from subsidiaries	18			3,115			2,142
Equity in net loss (income) of subsidiaries	(2,310		)	(1,397		)	1,972
Net realized capital losses (gains)	3			(37		)	2
Change in operating assets and liabilities	640			(716		)	1,076
Cash provided by operating activities	504			2,778			2,061
Investing Activities
Net proceeds from (payments for) short-term investments	1,731			(2,161		)	(121		)
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	478			—			—
Net proceeds from (payments for) derivatives	(33		)	—			—
Net additions to property and equipment	—			(69		)	—
Amount paid for business acquired	(2,098		)	—			—
Capital contributions to subsidiaries	(20		)	(148		)	(633		)
Cash provided by (used for) investing activities	58			(2,378		)	(754		)
Financing Activities
Proceeds from issuance of debt	1,376			490			500
Repayments of debt	(1,278		)	(826		)	(416		)
Preferred stock issued, net of issuance costs	—			334			—
Treasury stock acquired	(200		)	—			(1,028		)
Net issuance (return of) shares under incentive and stock compensation plans	(6		)	(18		)	(20		)
Dividends paid on common shares	(436		)	(379		)	(341		)
Dividends paid on preferred shares	(21		)	—			—
Cash used for financing activities	(565		)	(399		)	(1,305		)
Net increase (decrease) in cash	(3		)	1			2
Cash — beginning of period	3			2			—
Cash — end of period	$	—		$	3		$	2
Supplemental Disclosure of Cash Flow Information
Interest Paid	$	255		$	290		$	312

S-4

Part IV - Schedule III. Supplementary Insurance Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE III

SUPPLEMENTARY INSURANCE INFORMATION

(in millions)

	Segment	Deferred Policy Acquisition Costs			Unpaid Losses and Loss Adjustment Expenses			Reserve for Future Policy Benefits			Unearned Premiums			Other Policyholder Funds and Benefits Payable
	As of December 31, 2019
	Commercial Lines	$	615		$	23,363		$	—		$	5,015		$	—
	Personal Lines	111			2,201			—			1,578			—
	Property & Casualty Other Operations	—			2,697			—			3			—
	Group Benefits	51			8,256			411			39			459
	Hartford Funds	8			—			—			—			—
	Corporate	—			—			224			—			296
	Consolidated	$	785		$	36,517		$	635		$	6,635		$	755
	As of December 31, 2018
	Commercial Lines	$	495		$	19,455		$	—		$	3,589		$	—
	Personal Lines	117			2,456			—			1,643			—
	Property & Casualty Other Operations	—			2,673			—			7			—
	Group Benefits	52			8,445			427			43			455
	Hartford Funds	6			—			—			—			—
	Corporate	—			—			215			—			312
	Consolidated	$	670		$	33,029		$	642		$	5,282		$	767

S-5

Part IV - Schedule III. Supplementary Insurance Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE III

SUPPLEMENTARY INSURANCE INFORMATION

(In millions)

Segment	Earned Premiums, Fee Income and Other			Net Investment Income			Benefits, Losses and Loss Adjustment Expenses			Amortization of Deferred Policy Acquisition Costs [1]			Insurance Operating Costs and Other Expenses [2]			Net Written Premiums [3]
For the year December 31, 2019
Commercial Lines	$	8,326		$	1,129		$	5,192		$	1,296		$	1,776		$	8,452
Personal Lines	3,318			179			2,185			259			702			3,131
Property & Casualty Other Operations	2			84			21			—			12			—
Group Benefits	5,603			486			4,055			54			1,352			—
Hartford Funds	999			7			—			12			813			—
Corporate	146			66			19			1			431			12
Consolidated	$	18,394		$	1,951		$	11,472		$	1,622		$	5,086		$	11,595
For the year December 31, 2018
Commercial Lines	$	7,081		$	997		$	4,112		$	1,048		$	1,396		$	7,136
Personal Lines	3,523			155			2,763			275			684			3,276
Property & Casualty Other Operations	—			90			65			—			13			(4		)
Group Benefits	5,598			474			4,214			45			1,342			—
Hartford Funds	1,032			5			—			16			831			—
Corporate	53			59			11			—			387			—
Consolidated	$	17,287		$	1,780		$	11,165		$	1,384		$	4,653		$	10,408
For the year December 31, 2017
Commercial Lines	$	6,902		$	949		$	4,322		$	1,009		$	1,381		$	6,956
Personal Lines	3,819			141			3,000			309			649			3,561
Property & Casualty Other Operations	—			106			18			—			9			—
Group Benefits	3,677			381			2,803			33			924			—
Hartford Funds	992			3			—			21			805			—
Corporate	4			23			31			—			1,125			—
Consolidated	$	15,394		$	1,603		$	10,174		$	1,372		$	4,893		$	10,517

[1] For the year ended December 31, 2019, the amortization of the value of in-force contracts acquired from the Navigators Group acquisition is recorded as DAC amortization.

[2] Includes interest expense, loss on extinguishment of debt, restructuring and other costs, loss on reinsurance transaction and amortization of intangible assets.

[3]Excludes life insurance pursuant to Regulation S-X.

S-6

Part IV - Schedule IV. Reinsurance

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE IV

REINSURANCE

(in millions)

	Gross Amount			Ceded Amount			Assumed From Other Companies			Net Amount			Percentage of Amount Assumed to Net
For the year ended December 31, 2019
Life insurance in-force	$	879,496		$	18,483		$	254,739		$	1,115,752		23	%
Insurance revenues
Property and casualty insurance	$	12,010		$	936		$	416		$	11,490		4	%
Life insurance and annuities	1,739			25			807			2,521			32	%
Accident and health insurance	2,383			66			765			3,082			25	%
Total insurance revenues	$	16,132		$	1,027		$	1,988		$	17,093		12	%
For the year ended December 31, 2018
Life insurance in-force	$	722,048		$	16,674		$	442,817		$	1,148,191		39	%
Insurance revenues
Property and casualty insurance	$	10,824		$	599		$	221		$	10,446		2	%
Life insurance and annuities	1,551			22			1,082			2,611			41	%
Accident and health insurance	2,064			39			962			2,987			32	%
Total insurance revenues	$	14,439		$	660		$	2,265		$	16,044		14	%
For the year ended December 31, 2017
Life insurance in-force	$	700,860		$	9,493		$	301,573		$	992,940		30	%
Insurance revenues
Property and casualty insurance	$	10,923		$	600		$	232		$	10,555		2	%
Life insurance and annuities	1,526			14			232			1,744			13	%
Accident and health insurance	1,755			36			214			1,933			11	%
Total insurance revenues	$	14,204		$	650		$	678		$	14,232		5	%

S-7

Part IV - Schedule V. Valuation and Qualifying Accounts

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE V

VALUATION AND QUALIFYING ACCOUNTS

(in millions)

	Balance January 1,			Increase (decrease) in Costs and Expenses			Write-offs/ Payments/ Other			Balance December 31,
2019
Allowance for doubtful accounts and other	$	135		$	42		$	(32	)	$	145
Allowance for uncollectible reinsurance	126			2			(14		)	114
Valuation allowance on mortgage loans	1			(1		)	—			—
Valuation allowance for deferred taxes	—			—			4			4
2018
Allowance for doubtful accounts and other	$	132		$	40		$	(37	)	$	135
Allowance for uncollectible reinsurance	104			3			19			126
Valuation allowance on mortgage loans	1			—			—			1
Valuation allowance for deferred taxes	—			—			—			—
2017
Allowance for doubtful accounts and other	$	137		$	42		$	(47	)	$	132
Allowance for uncollectible reinsurance	165			4			(65		)	104
Valuation allowance on mortgage loans	—			1			—			1
Valuation allowance for deferred taxes	—			—			—			—

S-8

Part IV - Schedule VI. Supplementary Information Concerning Property and Casualty Insurance Operations

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

SCHEDULE VI

SUPPLEMENTAL INFORMATION CONCERNING

PROPERTY AND CASUALTY INSURANCE OPERATIONS

(in millions)

	Discount Deducted From Liabilities [1]			Losses and Loss Adjustment Expenses Incurred Related to:						Paid Losses and Loss Adjustment Expenses
	Current Year			Prior Year
Years ended December 31,
2019	$	388		$	7,463		$	(65	)	$	(6,748	)
2018	$	388		$	7,107		$	(167	)	$	(6,406	)
2017	$	410		$	7,381		$	(41	)	$	(6,579	)

[1]	Indemnity reserves for a portion of workers’ compensation claims that have a fixed and determinable payment stream have been discounted using the weighted average interest rates of 2.91%**, 2.98%**, and 3.06% for the years ended December 31, 2019*,* 2018*, and* 2017*, respectively.*

S-9

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2019

FORM 10-K

EXHIBITS INDEX

The exhibits attached to this Form 10-K are those that are required by Item 601 of Regulation S-K.

		Incorporated by Reference
Exhibit No.	Description	Form	File No.	Exhibit No.	Filing Date
2.01	Purchase and Sale Agreement by and among Massachusetts Mutual Life Insurance Company, Hartford Life, Inc. and The Hartford Financial Services Group, Inc. ("The Hartford") dated as of September 4, 2012.	10-Q	001-13958	2.01	11/01/2012
2.02	Purchase and Sale Agreement by and among Hartford Life, Inc., Prudential Financial, Inc. and The Hartford dated as of September 27, 2012.	10-Q	001-13958	2.02	11/01/2012
2.03	Stock and Asset Purchase Agreement dated December 3, 2017 by and between The Hartford Financial Services Group, Inc., Hartford Holdings, Inc. Hopmeadow Acquisition, Inc. Hopmeadow Holdings, LP and Hopmeadow Holdings GP LLC.	8-K	001-13958	2.01	12/04/2017
2.04	Master Transaction Agreement by and between Hartford Life & Accident Insurance Company, a subsidiary of The Hartford Financial Services Group, Inc., and Aetna Inc. dated as of October 22, 2017.	8-K	001-13958	2.01	10/23/2017
2.05	Commitment Agreement by and between The Hartford Financial Services Group, Inc., The Prudential Insurance Company of America and State Street Global Advisors Trust Company, as the Independent Fiduciary of The Hartford Retirement Plan for U.S. Employees, dated as of June 23, 2017.†	10-Q	001-13958	2.01	07/27/2017
2.06	Agreement and Plan of Merger, dated as of August 22, 2018, by and among The Navigators Group, Inc., The Hartford Financial Services Group, Inc. and Renato Acquisition Co.	8-K/A	001-13958	2.1	08/22/2018
3.01	Restated Certificate of Incorporation of The Hartford, as filed with the Delaware Secretary of State on October 20, 2014.	8-K	001-13958	3.01	10/20/2014
3.02	Amended and Restated By-Laws of The Hartford, amended effective July 21, 2016.	8-K	001-13958	3.01	07/21/2016
3.03	Certificate of Designations with respect to the Series G Preferred Stock of the Company, dated October 30, 2018.	8-K	001-13958	3.1	11/05/2018
4.01	Senior Indenture, dated as of March 9, 2004, between The Hartford and JPMorgan Chase Bank, as Trustee.	8-K	001-13958	4.01	03/12/2004
4.02	Junior Subordinated Indenture, dated as of February 12, 2007, between The Hartford Financial Services Group, Inc., and Wilmington Trust Company (as successor to LaSalle Bank, National Association), as Trustee.	8-K	001-13958	4.01	02/16/2007
4.03	Senior Indenture, dated as of April 11, 2007, between The Hartford and The Bank of New York Trust Company, N.A., as Trustee.	S-3ASR	333-142044	4.03	04/11/2007
4.04	Junior Subordinated Indenture, dated as of June 6, 2008, between The Hartford and The Bank of New York Trust Company, N.A., as Trustee.	8-K	001-13958	4.01	06/06/2008
4.05	First Supplemental Indenture, dated as of June 6, 2008, between The Hartford and The Bank of New York Trust Company, N.A., as Trustee.	8-K	001-13958	4.02	06/06/2008
4.06	Third Supplemental Indenture, dated as of April 5, 2012, between The Hartford and The Bank of New York Mellon Trust Company, N.A., as Trustee.	8-K/A	001-13958	4.03	04/06/2012
4.07	First Supplemental Indenture, dated as of August 9, 2013, between The Hartford and The Bank of New York Mellon Trust Company, N.A., as Trustee.	S-3ASR	333-190506	4.07	08/09/2013
4.08	Replacement Capital Covenant dated as of February 15, 2017.	8-K	001-13958	4.01	02/15/2017
4.09	Form of Series G Preferred Stock Certificate (included as Exhibit A to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on November 5, 2018).	8-K	001-13958	3.1	11/05/2018
4.10	Deposit Agreement, dated November 6, 2018, among the Company, Computershare Inc. and Computershare Trust Company, N.A., collectively as depositary, and the holders from time to time of the depositary receipts described therein.	8-K	001-13958	4.2	11/06/2018

I-1

		Incorporated by Reference
Exhibit No.	Description	Form	File No.	Exhibit No.	Filing Date
4.11	Form of Depositary Receipt (included as Exhibit A to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on November 6, 2018)	8-K	001-13958	4.3	11/06/2018
4.12	Second Supplemental Indenture, dated as of August 19, 2019, between The Hartford Financial Services Group, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee	8-K	001-13958	4.3	08/19/2019
4.13	Description of Securities**
10.01	Form of Commercial Paper Dealer Agreement between The Hartford Financial Services Group, Inc. as Issuer, and the Dealer party thereto.	8-K	001-13958	10.01	12/29/2014
10.02	Aggregate Excess of Loss Reinsurance Agreement by and between Hartford Fire Insurance Company, First State Insurance Company, New England Insurance Company, New England Reinsurance Corporation, Hartford Accident and Indemnity Company, Hartford Casualty Insurance Company, Hartford Fire Insurance Company, Hartford Insurance Company of Illinois, Hartford Insurance Company of the Midwest, Hartford Insurance Company of the Southeast, Hartford Lloyd’s Insurance Company, Hartford Underwriters Insurance Company, Nutmeg Insurance Company, Pacific Insurance Company, Limited, Property and Casualty Insurance Company of Hartford, Sentinel Insurance Company, Ltd., Trumbull Insurance Company, Twin City Fire Insurance Company (collectively, the "Reinsured") and National Indemnity Company (the "Reinsurer") dated as of December 30, 2016. ††	10-K	001-13958	10.01	02/24/2017
10.03	Amendment dated March 29, 2018 to the Existing Credit Agreement, dated as of October 31, 2014, among The Hartford Financial Services Group, Inc. as borrower, Bank of America, N.A., as administrative agent and the other parties signatory thereto.	8-K	001-13958	10.01	03/30/2018
10.04	Amended and Restated Credit Agreement dated as of the Extension Date (as defined therein), among The Hartford Financial Services Group, Inc. as borrower, Bank of America, N.A., as administrative agent and the other parties signatory thereto.	8-K	001-13958	10.02	03/30/2018
*10.05	The Hartford Senior Executive Officer Severance Pay Plan, as amended and restated, effective October 1, 2014.	10-K	001-13958	10.04	02/27/2015
*10.06	The Hartford Senior Executive Severance Pay Plan, as amended and restated, effective October 1, 2014.	10-K	001-13958	10.05	02/27/2015
*10.07	The Hartford 2014 Incentive Stock Plan Administrative Rules Relating to Awards for Non-Employee Directors.	10-K	001-13958	10.06	02/27/2015
*10.08	The Hartford 2010 Incentive Stock Plan, as amended and restated, effective February 25, 2014.	10-K	001-13958	10.05	02/28/2014
*10.09	The Hartford 2014 Incentive Stock Plan, effective May 21, 2014.	S-8	333-197671	4.03	07/28/2014
*10.10	The Hartford Protection Agreement between The Hartford and Christopher Swift, effective June 9, 2014.	10-Q	001-13958	10.03	07/30/2014
*10.11	The Hartford 2014 Incentive Stock Plan Form of Non-Employee Directors Award Agreement.	10-Q	001-13958	10.01	07/27/2015
*10.12	The Hartford 2010 Incentive Stock Plan Administrative Rules Related to Awards for Key Employees, as amended effective December 15, 2010.	10-K	001-13958	10.10	02/25/2011
*10.13	The Hartford 2010 Incentive Stock Plan Forms of Individual Award Agreements.	10-Q	001-13958	10.04	08/04/2010
*10.14	The Hartford 2005 Incentive Stock Plan, as amended for the fiscal year ended 2009.	10-K	001-13958	10.10	02/23/2010
*10.15	The Hartford 2005 Incentive Stock Plan Forms of Individual Award Agreements.	8-K	001-13958	10.02	05/24/2005
*10.17	Form of Key Executive Employment Protection Agreement between The Hartford and certain executive officers of The Hartford, as amended.	10-K	001-13958	10.06	02/12/2009
*10.18	The Hartford Deferred Restricted Stock Unit Plan, as amended.	10-K	001-13958	10.12	02/24/2006
*10.19	The Hartford Excess Savings Plan IA, as amended effective May 28, 2013.	8-K	001-13958	10.01	07/29/2013
*10.20	The Hartford Deferred Compensation Plan, as amended December 20, 2012.	10-K	001-13958	10.18	03/01/2013
*10.21	The Hartford Excess Pension Plan II, as amended January 1, 2013.	10-K	001-13958	10.19	03/01/2013

I-2

		Incorporated by Reference
Exhibit No.	Description	Form	File No.	Exhibit No.	Filing Date
*10.22	The Hartford 2014 Incentive Stock Plan Forms of Individual Award Agreements	10-Q	001-13958	10.02	04/26/2018
*10.23	The Hartford Financial Services Group, Inc. Annual Incentive Plan	8-K	001-13958	10.01	02/21/2019
*10.24	Amendment to The Hartford Excess Savings Plan IA	10-Q	001-13958	10.01	11/04/2019
21.01	Subsidiaries of The Hartford Financial Services Group, Inc. **
23.01	Consent of Deloitte & Touche LLP to the incorporation by reference into The Hartford’s Registration Statements on Form S-8 and Form S-3 of the report of Deloitte & Touche LLP contained in this Form 10-K regarding the audited financial statements is filed herewith. **
24.01	Power of Attorney. **
31.01	Certification of Christopher J. Swift pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **
31.02	Certification of Beth A. Costello pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. **
32.01	Certification of Christopher J. Swift pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
32.02	Certification of Beth A. Costello pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. **
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase.**
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase.**
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase.**
104.01	Cover Page Interactive Data File - formatted in Inline XBRL and included as Exhibit 101

*		Management contract, compensatory plan or arrangement.
**		Filed with the Securities and Exchange Commission as an exhibit to this report.
†		Certain portions of this exhibit have been omitted pursuant to the Securities and Exchange Commission Order Granting Confidential Treatment Under the Securities Exchange Act of 1934, dated August 7, 2017
††		Certain portions of this exhibit have been omitted pursuant to the Securities and Exchange Commission Order Granting Confidential Treatment Under the Securities Exchange Act of 1934, dated March 17, 2017

I-3

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	THE HARTFORD FINANCIAL SERVICES GROUP, INC.
	By:	/s/ Scott R. Lewis
		Scott R. Lewis
		Senior Vice President and Controller
		(Chief accounting officer and duly authorized signatory)

Date: February 21, 2020

I-4

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

		Signature		Title		Date
		/s/ Christopher J. Swift		Chairman, Chief Executive Officer and Director		February 21, 2020
		Christopher J. Swift		(Principal Executive Officer)
		/s/ Beth A. Costello		Executive Vice President and Chief Financial Officer		February 21, 2020
		Beth A. Costello		(Principal Financial Officer)
		/s/ Scott R. Lewis		Senior Vice President and Controller		February 21, 2020
		Scott R. Lewis		(Principal Accounting Officer)
		*		Director		February 21, 2020
		Robert B. Allardice III
		*		Director		February 21, 2020
		Larry De Shon
		*		Director		February 21, 2020
		Carols Dominguez
		*		Director		February 21, 2020
		Trevor Fetter
		*		Director		February 21, 2020
		Kathryn A. Mikells
		*		Director		February 21, 2020
		Michael G. Morris
		*		Director		February 21, 2020
		Julie G. Richardson
		*		Director		February 21, 2020
		Teresa W. Roseborough
		*		Director		February 21, 2020
		Virginia P. Ruesterholz
		*		Director		February 21, 2020
		Greig Woodring
*By:		/s/ David C. Robinson
		David C. Robinson
		As Attorney-in-Fact

I-5