Hartford Insurance Group (HIG) 10-K risk factor changes: FY2021 vs FY2020

In these markets, we may be compelled to underwrite significant amounts of business at lower than desired rates or accept additional risk not [added: contemplated in our existing rates, participate in the operating losses of residual market plans or pay assessments to fund operating deficits of state-sponsored funds, possibly leading to lower returns on equity.]

In all of our property and casualty and group benefits insurance product lines, there is a risk that the premium we charge may [removed: ultimately prove to be inadequate as reported losses emerge.]

Because of the highly competitive nature of the industries we compete in, there can be no assurance that we will continue to compete effectively with our industry rivals, or that competitive pressure will not [added: have a material adverse effect on our business and results of operations.]

[removed: Part] [added: Part] I - Item 1A.

Risk [removed: Factors][added: Factors]

Changes in industry practices and in legal, judicial, social and other environmental conditions, technological advances or fraudulent activities, may require us to pay claims we did not [added: intend to cover when we wrote the policies.]

Social, economic, political and environmental issues, including rising income inequality, climate change, prescription drug use and addiction, exposures to new substances or those [added: substances] previously considered to be [removed: safe,] [added: safe and found to have latent exposure,] along with the use of social media to proliferate messaging around such issues, has expanded the theories for reporting claims, which may increase our claims administration and/or litigation costs.

Some of these changes, advances or activities may not become apparent until some time after we have issued insurance contracts that are affected by the changes, advances or activities and/or we may be unable to compensate for such losses through future pricing [removed: and underwriting.]

[added: A downgrade or a potential downgrade of our credit ratings could make it more] difficult or costly to refinance maturing debt obligations, to support business growth at our insurance subsidiaries and to maintain or improve the financial strength ratings of our principal insurance subsidiaries.

In the United States, statutory accounting standards and statutory capital and reserve requirements for these entities are prescribed by the applicable [removed: insurance regulators and the NAIC.]

In addition, our Lloyd’s member company [removed: is required to] [added: must] maintain required Funds at [removed: Lloyd’s (“FAL”)] [added: Lloyd's ("FAL")] to meet the capital requirements of its syndicate.

In any particular year, statutory surplus amounts, RBC ratios, FAL and SCR may increase or decrease depending on a variety of factors, [removed: including (as applicable)][added: some of which are outside the Company's control, including:]

- the amount of statutory income or losses generated by our insurance [removed: subsidiaries,][added: subsidiaries;]

- the amount of additional capital our insurance subsidiaries must hold to support business [removed: growth,][added: growth;]

- the amount of dividends or distributions paid to the holding [removed: company,][added: company;]

- changes in equity market [removed: levels,][added: levels;]

- the value of certain fixed-income and equity securities in our investment [removed: portfolio,][added: portfolio;]

- the value of certain derivative [removed: instruments,][added: instruments;]

- changes in interest [removed: rates,][added: rates;]

- admissibility of deferred tax [removed: assets, and][added: assets;]

- changes to the regulatory capital [removed: formulas.][added: formulas; and]

Among other factors, rating agencies consider the level of statutory capital and surplus of our U.S. insurance subsidiaries as well as the level of a measure of [removed: GAAP] [added: Generally Accepted Accounting Principles ("GAAP")] capital held by the Company in determining the Company's financial strength and credit ratings.

[added: The inability or unwillingness of any reinsurer or retrocessionaire] to meet its financial obligations to us, including the impact of any insolvency or rehabilitation proceedings involving a reinsurer or retrocessionaire that could affect the Company's access to collateral held in trust, could have a material adverse effect on our financial condition, results of operations and liquidity.

Further, due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables will be 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 [removed: cash flows] [added: liquidity] in a particular quarterly or annual period.

[removed: Both proprietary] and third party models we use incorporate numerous assumptions and forecasts about the future level and variability of interest rates, capital requirements, loss frequency and severity, currency exchange rates, policyholder behavior, equity markets and inflation, among others.

Further, rapidly changing or unprecedented credit and equity market [added: conditions could materially impact the valuation of securities and the period-to-period changes in value could vary significantly.]

Similarly, management’s decision on whether to record an allowance for credit [removed: loss] [added: losses] is subject to significant judgments and assumptions regarding changes in general economic conditions, the issuer's financial condition or future recovery prospects, estimated future cash flows, the [removed: effects of changes in interest rates or credit spreads, the] expected recovery period and the accuracy of third party information used in internal assessments.

[added: In the event of a disaster such as a natural catastrophe, a pandemic, civil unrest, an] industrial accident, a cyber-attack, a blackout, a terrorist attack (including conventional, nuclear, biological, chemical or radiological) or war, systems upon which we rely may be inaccessible to our employees, customers or business partners for an extended period of time.

Our systems have been, and will likely continue to be, subject to viruses or other malicious codes, unauthorized access, [removed: cyber-attacks,] [added: cyber-attacks (such as ransomware and denial of service),] cyber frauds or other computer related penetrations.

Third parties, including third party administrators and cloud-based systems, are also subject to [removed: cyber-breaches] [added: cyber-attacks and breaches] of confidential information, along with the other risks outlined above, any one of which may result in our incurring substantial costs and other negative consequences, including a material adverse effect on our business, reputation, financial condition, results of operations and liquidity.

[added: If we are unable to reach] agreement in the negotiation of contracts or renewals with certain third-party providers, or if such third-party providers experience disruptions [added: in their processes] or [added: with relied upon vendors, or if they] do not perform as anticipated, we may be unable to meet our obligations to customers and claimants, incur higher costs and lose business which may have a material adverse effect on our business and results of operations.

We could be adversely affected by the acquisition due to unanticipated performance issues and additional expense, unforeseen liabilities, transaction-related charges, downgrades [removed: of] [added: by] third-party rating agencies, diversion of management time and resources to integration challenges, loss of key employees, regulatory requirements, exposure to tax liabilities, amortization of expenses related to intangibles and charges for impairment of long-term assets or goodwill.

In addition, we may be adversely impacted by uncertainties related to reserve estimates of the [added: acquired company and its design and operation of internal controls over financial reporting.]

Our continued ability to compete effectively in our businesses and to expand into new business areas depends on our ability to attract new employees and to [added: develop,] retain and motivate our existing employees.

The loss of [removed: any one or more] key employees, including executives, managers and employees with strong technological, analytical and other specialized skills, may adversely impact the execution of our business objectives or result in loss of important institutional knowledge.

Any such intellectual property claims and any resulting litigation could result in significant expense and liability for damages, and in some circumstances we could be enjoined from providing certain products or services to our customers, or [added: utilizing and benefiting from certain patent, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition.]

For example, further reforms to the Affordable Care Act, and potential modifications of the Dodd-Frank [removed: Act] [added: Act, including expansion of the role of the Federal Insurance Office ("FIO") or repeal of the McCarran-Ferguson Act,] could have unanticipated consequences for the Company and its businesses.

It is unclear whether and to what extent Congress will continue to [removed: make changes to the Dodd-Frank Act,] [added: pursue these types of reforms,] and how those changes might impact the Company, its business, financial conditions, results of operations and liquidity.

Our international insurance subsidiaries are subject to the laws and regulations of the relevant jurisdictions in which they operate, including the requirements of the Prudential Regulation Authority and the Financial Conduct Authority in the [removed: U.K; the National Bank of Belgium] [added: U.K] and the [removed: Financial Services and Markets] [added: Insurance] Authority in [removed: Belgium; and the Commissariat Aux Assurances in Luxembourg.][added: Hong Kong.]

For example, the NAIC and state insurance regulators are continually reexamining existing laws and regulations, specifically focusing on modifications to U.S. [added: statutory accounting principles, interpretations of existing laws and the development of new laws and regulations.]

effect on our business, financial condition, results of operations or liquidity.

Moreover, regulators may seek to prohibit or constrain the use of certain underwriting and rating factors, which may affect our ability to price risks.

ultimately prove to be inadequate as reported losses emerge.

Increased use of advanced analytics and automation in the workplace could potentially affect the demand for workers' compensation insurance products over time.

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and underwriting.

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Part I - Item 1A.

Risk Factors

insurance regulators and the NAIC.

- regulatory changes to accounting guidance for determining capital adequacy.

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Part I - Item 1A.

Risk Factors

Both proprietary

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Part I - Item 1A.

Risk Factors

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Part I - Item 1A.

Risk Factors

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Department to include in its biennial report on the effectiveness of the Program an evaluation of the availability and affordability of terrorism risk insurance for places of worship; and (2) Government Accountability Office report to analyze and address the vulnerabilities and potential costs of cyber terrorism, to assess adequacy of coverage under the Program, and to make recommendations for future legislative changes to address evolving cyber terrorism risks.

Further, the continued threat of terrorism and the occurrence of terrorist attacks, as well as heightened security measures and military action in response to these threats and attacks or other geopolitical or military crises, may cause significant volatility in global financial markets, disruptions to commerce and reduced economic activity.

These consequences could have an adverse effect on the value of the assets in our investment portfolio.

Terrorist attacks also could disrupt our operation centers.

In addition, TRIPRA 2019 expires on December 31, 2027 and if the U.S. Congress does not reauthorize the program or significantly reduces the government’s share of covered terrorism losses, the Company’s exposure to terrorism losses could increase materially unless it can purchase alternative terrorism reinsurance protection in the private markets at affordable prices or takes actions to materially reduce its exposure in lines of business subject to terrorism risk.

For a further discussion of TRIPRA, see Part II, Item 7, MD&A - Enterprise Risk Management - Insurance Risk Management, Reinsurance as a Risk Management Strategy.

As a result, it is possible that any, or a combination of all, of these factors related to a catastrophe, or multiple catastrophes, whether natural or man-made, can have a material adverse effect on our business, financial condition, results of operations or liquidity.

contemplated in our existing rates, participate in the operating losses of residual market plans or pay assessments to fund operating deficits of state-sponsored funds, possibly leading to lower returns on equity.

have a material adverse effect on our business and results of operations.

intend to cover when we wrote the policies.

A downgrade or a potential downgrade of our credit ratings could make it more

Most of these factors are outside of the Company's control.

The regulatory capital formulas could also be negatively affected if the NAIC, state insurance regulators or other insurance regulators change the accounting guidance for determining capital adequacy.

The inability or unwillingness of any reinsurer or retrocessionaire

conditions could materially impact the valuation of securities and the period-to-period changes in value could vary significantly.

In the event of a disaster such as a natural catastrophe, a pandemic, civil unrest, an

If we are unable to reach

The Company may not be able to achieve all the revenue increases, expense reductions and other synergies that it expects to realize as a result of acquisitions, divestitures or restructurings.

acquired company and its design and operation of internal controls over financial reporting.

We may also retain a position in securities of the acquirer that purchased the divested business, which subjects us to risks related to the price of the equity securities and our ability to monetize such securities.

utilizing and benefiting from certain patent, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations and financial condition.

statutory accounting principles, interpretations of existing laws and the development of new laws and regulations.

In addition, the Organization for Economic Co-operation and Development’s efforts around Global Pillars I and II dealing with possible new digital taxes and global minimum taxes, if enacted, could increase the Company’s overall tax burden, adversely affecting the Company’s business, financial condition and results of operation.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the "Tax Cuts and Jobs Act" ("TCJA").

There is a risk that Congress could enact future legislation that may change or eliminate the provisions of TCJA or affect how the provisions apply to the Company including a corporate tax rate increase or other changes that may affect the manner in which insurance companies are taxed.

Moreover we could continue to see states enact changes to their tax laws including the state impacts of TCJA, such as limitations on interest deductions and income earned by foreign affiliates, which, in turn, could adversely affect the Company's business and financial results.

Among other risks, there is risk that

these additional clarifications could increase taxes on the Company, further increase administrative costs, make the sale of our products more costly and/or make our products less competitive.

| | | | December 31, [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | | | | | | | December 31, [removed: 2019] [added: 2020] | | | | | | | | | | | | | | | [added: | | |]

| | | | Amortized Cost | | | [removed: ACL \[1\]] [added: ACL] | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Percent of Total Fair Value | | | | | | Amortized Cost | | | [added: ACL | | |] Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | | | Percent of Total Fair Value | | |

| Asset-backed securities ("ABS") | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | |]

| Consumer loans | | | $ | [removed: 1,396] [added: 959] | | $ | — | | $ | [removed: 35] [added: 11] | | $ | [removed: —] [added: (2)] | | $ | [removed: 1,431] [added: 968] | | [removed: 3.2] [added: 2.3] | | % | | | | $ | [removed: 1,350] [added: 1,396] | | $ | [removed: 16] [added: —] | | $ | [removed: (3)] [added: 35] | | $ | [removed: 1,363] [added: —] | | [added: $ | 1,431 | |] 3.2 | | % |

| Other | | | [removed: 129] [added: 166] | | | — | | | [removed: 4] [added: 2] | | | [removed: —] [added: (1)] | | | [removed: 133] [added: 167] | | | [removed: 0.3] [added: 0.4] | | % | | | | [removed: 111] [added: 129] | | | [removed: 2] [added: —] | | | [added: 4 | | |] — | | | [removed: 113] [added: 133] | | | 0.3 | | % |

| [removed: Collateralized] [added: Collateralized] loan obligations [removed: ("CLOs")] [added: ("CLOs")] | | | [removed: 2,780] [added: 3,019] | | | — | | | [removed: 7] [added: 8] | | | [removed: (7)] [added: (2)] | | | [removed: 2,780] [added: 3,025] | | | [removed: 6.2] [added: 7.1] | | % | | | | [removed: 2,186] [added: 2,780] | | | [removed: 5] [added: —] | | | [removed: (8)] [added: 7] | | | [removed: 2,183] [added: (7)] | | | [removed: 5.2] [added: 2,780] | | [added: | 6.2 | |] % |

| Agency [removed: \[2\]] [added: \[1\]] | | | [removed: 1,779] [added: 1,390] | | | — | | | [removed: 117] [added: 75] | | | [removed: (6)] [added: (5)] | | | [removed: 1,890] [added: 1,460] | | | [removed: 4.2] [added: 3.4] | | % | | | | [removed: 1,878] [added: 1,779] | | | [removed: 43] [added: —] | | | [removed: (7)] [added: 117] | | | [removed: 1,914] [added: (6)] | | | [removed: 4.5] [added: 1,890] | | [added: | 4.2 | |] % |

| Bonds | | | [removed: 2,160] [added: 2,327] | | | — | | | [removed: 159] [added: 92] | | | [removed: (13)] [added: (9)] | | | [removed: 2,306] [added: 2,410] | | | [removed: 5.1] [added: 5.6] | | % | | | | [removed: 2,108] [added: 2,160] | | | [removed: 86] [added: —] | | | [removed: (4)] [added: 159] | | | [removed: 2,190] [added: (13)] | | | [removed: 5.2] [added: 2,306] | | [added: | 5.1 | |] % |

| Interest only | | | [removed: 280] [added: 238] | | | — | | | [removed: 10] [added: 12] | | | [removed: (2)] [added: (1)] | | | [removed: 288] [added: 249] | | | 0.6 | | % | | | | [removed: 224] [added: 280] | | | [removed: 12] [added: —] | | | [added: 10 | | |] (2) | | | [removed: 234] [added: 288] | | | 0.6 | | % |

| Corporate | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | |]

| Basic industry | | | [removed: 727] [added: 761] | | | — | | | [removed: 69] [added: 34] | | | [removed: (1)] [added: (5)] | | | [removed: 795] [added: 790] | | | 1.8 | | % | | | | [removed: 539] [added: 727] | | | [removed: 31] [added: —] | | | [added: 69 | | |] (1) | | | [removed: 569] [added: 795] | | | [removed: 1.4] [added: 1.8] | | % |

| Capital goods | | | [removed: 1,488] [added: 1,442] | | | — | | | [removed: 148] [added: 84] | | | [removed: (11)] [added: (9)] | | | [removed: 1,625] [added: 1,517] | | | [removed: 3.6] [added: 3.5] | | % | | | | [removed: 1,495] [added: 1,488] | | | [removed: 72] [added: —] | | | [removed: (9)] [added: 148] | | | [removed: 1,558] [added: (11)] | | | [removed: 3.7] [added: 1,625] | | [added: | 3.6 | |] % |

| Consumer cyclical | | | [removed: 1,434] [added: 1,161] | | | (1) | | | [removed: 108] [added: 50] | | | [removed: (1)] [added: (5)] | | | [removed: 1,540] [added: 1,205] | | | [removed: 3.4] [added: 2.8] | | % | | | | [removed: 991] [added: 1,434] | | | [removed: 57] [added: (1)] | | | [added: 108 | | |] (1) | | | [removed: 1,047] [added: 1,540] | | | [removed: 2.5] [added: 3.4] | | % |

| Consumer non-cyclical | | | [removed: 2,878] [added: 2,473] | | | — | | | [removed: 314] [added: 134] | | | [removed: (4)] [added: (8)] | | | [removed: 3,188] [added: 2,599] | | | [removed: 7.1] [added: 6.1] | | % | | | | [removed: 2,372] [added: 2,878] | | | [removed: 137] [added: —] | | | [removed: (3)] [added: 314] | | | [removed: 2,506] [added: (4)] | | | [removed: 5.9] [added: 3,188] | | [added: | 7.1 | |] % |

| Energy | | | [removed: 1,474] [added: 1,405] | | | [removed: (1)] [added: —] | | | [removed: 147] [added: 99] | | | [removed: (4)] [added: (2)] | | | [removed: 1,616] [added: 1,502] | | | [removed: 3.6] [added: 3.5] | | % | | | | [removed: 1,550] [added: 1,474] | | | [removed: 96] [added: (1)] | | | [removed: (3)] [added: 147] | | | [removed: 1,643] [added: (4)] | | | [removed: 3.9] [added: 1,616] | | [added: | 3.6 | |] % |

| Financial services | | | [removed: 4,523] [added: 4,648] | | | [removed: (21)] [added: —] | | | [removed: 398] [added: 214] | | | [removed: (4)] [added: (20)] | | | [removed: 4,896] [added: 4,842] | | | [removed: 10.9] [added: 11.3] | | % | | | | [removed: 3,977] [added: 4,523] | | | [removed: 192] [added: (21)] | | | [added: 398 | | |] (4) | | | [removed: 4,165] [added: 4,896] | | | [removed: 9.9] [added: 10.9] | | % |

| Tech./comm. | | | [removed: 2,651] [added: 2,658] | | | — | | | [removed: 370] [added: 216] | | | [removed: (3)] [added: (11)] | | | [removed: 3,018] [added: 2,863] | | | 6.7 | | % | | | | [removed: 2,360] [added: 2,651] | | | [removed: 208] [added: —] | | | [removed: —] [added: 370] | | | [removed: 2,568] [added: (3)] | | | [removed: 6.1] [added: 3,018] | | [added: | 6.7 | |] % |

| Transportation | | | [removed: 747] [added: 744] | | | — | | | [removed: 85] [added: 43] | | | (3) | | | [removed: 829] [added: 784] | | | 1.8 | | % | | | | [removed: 743] [added: 747] | | | [removed: 44] [added: —] | | | [removed: —] [added: 85] | | | [removed: 787] [added: (3)] | | | [removed: 1.9] [added: 829] | | [added: | 1.8 | |] % |

| Other | | | [removed: 480] [added: 535] | | | — | | | [removed: 37] [added: 23] | | | [removed: —] [added: (3)] | | | [removed: 517] [added: 555] | | | [removed: 1.1] [added: 1.3] | | % | | | | [removed: 389] [added: 480] | | | [removed: 17] [added: —] | | | [added: 37 | | |] — | | | [removed: 406] [added: 517] | | | [removed: 1.0] [added: 1.1] | | % |

| Foreign govt./govt. agencies | | | [removed: 842] [added: 883] | | | — | | | [removed: 77] [added: 33] | | | [removed: —] [added: (6)] | | | [removed: 919] [added: 910] | | | [removed: 2.0] [added: 2.1] | | % | | | | [removed: 1,057] [added: 842] | | | [removed: 66] [added: —] | | | [added: 77 | | |] — | | | [removed: 1,123] [added: 919] | | | [removed: 2.7] [added: 2.0] | | % |

| Municipal bonds | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | |]

| Taxable | | | [removed: 1,084] [added: 1,079] | | | — | | | [removed: 109] [added: 83] | | | [removed: (1)] [added: (2)] | | | [removed: 1,192] [added: 1,160] | | | [removed: 2.6] [added: 2.7] | | % | | | | [removed: 815] [added: 1,084] | | | [removed: 45] [added: —] | | | [added: 109 | | |] (1) | | | [removed: 859] [added: 1,192] | | | [removed: 2.0] [added: 2.6] | | % |

| Tax-exempt | | | [removed: 7,480] [added: 6,394] | | | — | | | [removed: 831] [added: 704] | | | [removed: —] [added: (1)] | | | [removed: 8,311] [added: 7,097] | | | [removed: 18.5] [added: 16.6] | | % | | | | [removed: 7,948] [added: 7,480] | | | [removed: 692] [added: —] | | | [removed: (1)] [added: 831] | | | [removed: 8,639] [added: —] | | | [removed: 20.5] [added: 8,311] | | [added: | 18.5 | |] % |

| Agency | | | [removed: 1,829] [added: 1,337] | | | — | | | [removed: 92] [added: 44] | | | [removed: (2)] [added: (11)] | | | [removed: 1,919] [added: 1,370] | | | [removed: 4.3] [added: 3.2] | | % | | | | [removed: 2,409] [added: 1,829] | | | [removed: 57] [added: —] | | | [removed: (1)] [added: 92] | | | [removed: 2,465] [added: (2)] | | | [removed: 5.8] [added: 1,919] | | [added: | 4.3 | |] % |

| Non-agency | | | [removed: 1,755] [added: 2,101] | | | — | | | [removed: 41] [added: 11] | | | [removed: (1)] [added: (16)] | | | [removed: 1,795] [added: 2,096] | | | [removed: 4.0] [added: 4.9] | | % | | | | [removed: 1,786] [added: 1,755] | | | [removed: 17] [added: —] | | | [removed: (2)] [added: 41] | | | [removed: 1,801] [added: (1)] | | | [removed: 4.2] [added: 1,795] | | [added: | 4.0 | |] % |

| Alt-A | | | [removed: 27] [added: 12] | | | — | | | [removed: 2] [added: 1] | | | — | | | [removed: 29] [added: 13] | | | [removed: 0.1] [added: —] | | % | | | | [removed: 40] [added: 27] | | | [removed: 3] [added: —] | | | [added: 2 | | |] — | | | [removed: 43] [added: 29] | | | 0.1 | | % |

| Sub-prime | | | [removed: 355] [added: 160] | | | — | | | [removed: 9] [added: 4] | | | — | | | [removed: 364] [added: 164] | | | [removed: 0.8] [added: 0.4] | | % | | | | [removed: 540] [added: 355] | | | [removed: 20] [added: —] | | | [added: 9 | | |] — | | | [removed: 560] [added: 364] | | | [removed: 1.3] [added: 0.8] | | % |

| U.S. Treasuries | | | [removed: 1,264] [added: 2,979] | | | — | | | [removed: 141] [added: 86] | | | [removed: —] [added: (14)] | | | [removed: 1,405] [added: 3,051] | | | [removed: 3.1] [added: 7.1] | | % | | | | [removed: 1,191] [added: 1,264] | | | [removed: 75] [added: —] | | | [removed: (1)] [added: 141] | | | [removed: 1,265] [added: —] | | | [removed: 3.0] [added: 1,405] | | [added: | 3.1 | |] % |

| Total fixed maturities, AFS | | | $ | [removed: 41,561] [added: 40,788] | | $ | [removed: (23)] [added: (1)] | | $ | [removed: 3,560] [added: 2,204] | | $ | [removed: (63)] [added: (144)] | | $ | [removed: 45,035] [added: 42,847] | | 100.0 | | % | | | | $ | [removed: 40,078] [added: 41,561] | | $ | [removed: 2,125] [added: (23)] | | $ | [removed: (55)] [added: 3,560] | | $ | [removed: 42,148] [added: (63)] | | [added: $ | 45,035 | |] 100.0 | | % |

[removed: For] further [removed: information] [added: information,] refer to Note [removed: 1] [added: 6] - [removed: Basis of Presentation and Significant Accounting Policies] [added: Investments] of Notes to Consolidated Financial [removed: Statements.*][added: Statements.]

[removed: *\[2\]Includes] [added: *\[1\]Includes] securities with pools of loans issued by the Small Business Administration which are backed by the full faith and credit of the U.S. [removed: government.*][added: government..*]

The fair value of fixed maturities, AFS [removed: increased] [added: decreased] as compared with December 31, [removed: 2019,] [added: 2020,] primarily due to [removed: net additions of corporate securities and an increase in valuations as] a [removed: result of a decline] [added: decrease] in [added: valuations due to higher] interest [removed: rates.][added: rates, partially offset by tighter]

| [removed: [Table] [added: [Table] of [removed: Contents](#idc368d1f18534aebba67ca458a76381b_7)] [added: Contents](#i995c27a32a614cd39befb7ad103f3b7b_7)] | | | | | | [removed: [Index] [added: [Index] to [removed: MD&A](#idc368d1f18534aebba67ca458a76381b_97)] [added: MD&A](#i995c27a32a614cd39befb7ad103f3b7b_97)] | | |

[removed: Part] [added: Part] II - Item 7.

Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations][added: Operations]

| | | | December 31, [removed: 2020] [added: 2021] | | | | | | | | | [added: | | |] December 31, [removed: 2019] [added: 2020] | | | | | | [added: | | |]

| [added: Consecutive Months] | | | [added: Items | | |] Amortized Cost | | | [added: ACL | | | Unrealized Loss | | |] Fair Value | | | | | | [added: Items | | |] Amortized Cost | | | [added: ACL | | | Unrealized Loss | | |] Fair Value | | |

[removed: For additional details regarding the Company’s credit loss assessment process, see the] Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments [removed: section below.]

The following table presents the Company’s exposure to CMBS and RMBS by [removed: current] credit quality included in the preceding Fixed Maturities, AFS by Type table.

Exposure to CMBS and RMBS as of December 31, [removed: 2019][added: 2021]

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| Commercial Mortgage-Backed Securities ("CMBS") | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Utilities | | | 1,917 | | | — | | | 141 | | | (8) | | | 2,050 | | | 4.8 | | % | | | | 1,999 | | | — | | | 250 | | | — | | | 2,249 | | | 5.0 | | % |

| Residential Mortgage-Backed Securities ("RMBS") | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed maturities, FVO \[2\] | | | | | | | | | | | | | | | $ | 160 | | | | | | | | | | | | | | | | | | | | $ | — | | | | |

*\[2\]Included within other investments on the Consolidated Balance Sheets.*

credit spreads.

The decline was also due to the reinvestment into other asset classes.The Company primarily decreased holdings of tax-exempt municipal bonds, agency and sub-prime

|

RMBS, consumer cyclical and non-cyclical corporate bonds, consumer loans, and agency CMBS, while primarily increasing holdings in U.S. treasuries, non-agency RMBS, CLOs, and CMBS bonds.

| Agency \[1\] | | | $ | 1,380 | | $ | 1,450 | | $ | 10 | | $ | 10 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,390 | | $ | 1,460 | |

| Bonds | | | 950 | | | 995 | | | 571 | | | 593 | | | 439 | | | 453 | | | 182 | | | 186 | | | 185 | | | 183 | | | 2,327 | | | 2,410 | | |

| Interest Only | | | 134 | | | 141 | | | 92 | | | 96 | | | 1 | | | 1 | | | 10 | | | 10 | | | 1 | | | 1 | | | 238 | | | 249 | | |

| Total CMBS | | | 2,464 | | | 2,586 | | | 673 | | | 699 | | | 440 | | | 454 | | | 192 | | | 196 | | | 186 | | | 184 | | | 3,955 | | | 4,119 | | |

| Agency | | | 1,315 | | | 1,347 | | | 22 | | | 23 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,337 | | | 1,370 | | |

| Non-Agency | | | 840 | | | 845 | | | 554 | | | 552 | | | 477 | | | 473 | | | 199 | | | 196 | | | 31 | | | 30 | | | 2,101 | | | 2,096 | | |

| Sub-Prime | | | 6 | | | 7 | | | 34 | | | 35 | | | 47 | | | 48 | | | 24 | | | 24 | | | 49 | | | 50 | | | 160 | | | 164 | | |

| Total RMBS | | | 2,161 | | | 2,199 | | | 610 | | | 610 | | | 524 | | | 521 | | | 223 | | | 220 | | | 92 | | | 93 | | | 3,610 | | | 3,643 | | |

| Total CMBS & RMBS | | | $ | 4,625 | | $ | 4,785 | | $ | 1,283 | | $ | 1,309 | | $ | 964 | | $ | 975 | | $ | 415 | | $ | 416 | | $ | 278 | | $ | 277 | | $ | 7,565 | | $ | 7,762 | |

as a participant are governed by a participation agreement.

The decrease in the allowance is primarily attributable to improved economic scenarios, partially offset by an increase driven by net additions of new loans.

|

| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | [Index to MD&A](#i995c27a32a614cd39befb7ad103f3b7b_97) | | |

Part II - Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

While COVID-19 has had an impact on many municipal issuers, credit fundamentals in this sector have broadly stabilized due to an unprecedented influx of federal relief funds and a strong economic recovery.

|

| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | [Index to MD&A](#i995c27a32a614cd39befb7ad103f3b7b_97) | | |

Part II - Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

*\[1\]Yields calculated using annualized net investment income divided by the monthly average invested assets.*

*\[2\]Consists of an insurer-owned life insurance policy which is primarily invested in fixed income, private equity, and hedge funds.*

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| CMBS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Utilities | | | 1,999 | | | — | | | 250 | | | — | | | 2,249 | | | 5.0 | | % | | | | 2,019 | | | 132 | | | (4) | | | 2,147 | | | 5.1 | | % |

| RMBS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

*\[1\]Represents the ACL recorded following the adoption of accounting guidance for credit losses on January 1, 2020.

The Company increased holdings in consumer cyclical and non-cyclical, financial services and technology/communication corporate bonds as well as in CLOs and taxable municipal bonds, while reducing holdings in tax-exempt municipal bonds, RMBS, and foreign government/government agencies.

Energy Exposure

Oil prices came under significant pressure during the first half of

2020, particularly during March and April, largely due to the unprecedented reduction in demand stemming from the global pandemic as well as a decision by Saudi Arabia to raise production despite declining demand.

The uncertain outlook caused credit spreads to widen for corporate and sovereign issuers that participate in the exploration, production, transportation and refining of oil and gas.

Subsequently, OPEC Plus' agreement to reduce production in combination with recovering demand from economic re-openings has contributed to a strong recovery in oil prices to average levels for the post 2014 cycle.

With the stabilization of oil prices, credit spreads have recovered

meaningfully.

Ultimately, the impact of price volatility in the Company’s energy sector investments will be determined by the durability of the recovery in energy prices and the ability of issuers to maintain liquidity, manage indebtedness, and navigate changing regulations and growing consolidation trends within the industry.

The Company's direct exposure within its investment portfolio to

the energy sector totals approximately 3% of invested assets as of December 31, 2020 and is primarily comprised of investment grade corporate debt.

These investments are diversified by issuer and different sub-sectors of the energy market, with the highest exposure to the midstream industry and the lowest to refining services.

The following table summarizes the Company's exposure to the energy sector by security type and credit quality.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exposure to Energy | | | | | | | | | | | | | | | | | |

| Corporate securities, AFS and Equity securities, at fair value | | | | | | | | | | | | | | | | | |

| Investment grade | | | $ | 1,170 | | $ | 1,307 | | | | | $ | 1,425 | | $ | 1,516 | |

| Below investment grade | | | 304 | | | 309 | | | | | | 125 | | | 127 | | |

| Equity securities, at fair value | | | 21 | | | 21 | | | | | | 45 | | | 45 | | |

| Total corporate, AFS and equity securities, at fair value | | | 1,495 | | | 1,637 | | | | | | 1,595 | | | 1,688 | | |

| Foreign govt./govt agencies | | | | | | | | | | | | | | | | | |

| Investment grade | | | 189 | | | 214 | | | | | | 232 | | | 254 | | |

| Below investment grade | | | — | | | — | | | | | | 9 | | | 10 | | |

| Total foreign govt./govt. agencies, AFS | | | 189 | | | 214 | | | | | | 241 | | | 264 | | |

| Other | | | 5 | | | 6 | | | | | | 20 | | | 21 | | |

| Total energy exposure | | | $ | 1,689 | | $ | 1,857 | | | | | $ | 1,856 | | $ | 1,973 | |

The Company manages the credit risk associated with the energy sector within the investment portfolio on an on-going basis using macroeconomic analysis and issuer credit analysis.

The Company considers alternate scenarios including oil prices remaining at low levels for an extended period and/or declining significantly below current levels.

For additional details regarding the Company’s management of credit risks, see the Credit Risk Section of this MD&A.

The Company has evaluated available-for-sale securities with exposure to energy for a potential ACL as of December 31, 2020 and concluded that for all but one of the securities in an unrealized loss position, it is more likely than not that the Company will recover the entire amortized cost basis of the securities.

In addition, no other securities in the table above have been identified as intent-to-sell, nor is the Company required to sell.

| Agency \[1\] | | | $ | 1,878 | | $ | 1,914 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,878 | | $ | 1,914 | |

| Bonds | | | 1,013 | | | 1,055 | | | 561 | | | 576 | | | 416 | | | 438 | | | 118 | | | 121 | | | — | | | — | | | 2,108 | | | 2,190 | | |

[removed: Principal] [added: Principal] Products and [removed: Services][added: Services]

[removed: Marketing] [added: Marketing] and [removed: Distribution][added: Distribution]

Commercial Lines provides insurance products and services through the Company’s regional offices, branches and sales and policyholder service centers throughout the United States [removed: and] [added: and, to a lesser extent,] overseas, principally in [removed: Europe.][added: the United Kingdom.]

[removed: Part] [added: Part] I - Item 1.

[removed: Business][added: Business]

[added: The products are marketed and] distributed using independent retail agents and brokers, wholesale agents and global and specialty reinsurance [removed: brokers.][added: brokers, with business also sold direct-to-consumer.]

In the United States, [removed: the] independent [removed: agent] [added: agents, brokers] and [removed: broker distribution channel is] [added: wholesalers are] consolidating and this trend is expected to continue.

This will likely result in a larger proportion of written premium being concentrated among fewer [removed: agents] [added: agents, brokers] and [removed: brokers.][added: wholesalers.]

[removed: Competition][added: Competition]

Larger carriers such as The Hartford [added: are] continually [removed: advance] [added: advancing] their pricing sophistication and ease of doing business with agents and customers through the use of technology, analytics and other capabilities that improve the process of evaluating a risk, quoting new business and servicing customers.

Within this competitive environment, The Hartford is working to deepen its product and underwriting capabilities, leverage its sales and underwriting talent and expand its use of data analytics [added: and third party data] to make risk selection and pricing decisions.

[added: The Hartford’s middle & large commercial business will leverage the] investments in product, underwriting, and technology to better match price to individual risk as the firm pursues responsible growth strategies to deliver target returns.

Lloyd's Syndicate and London market business have been under financial stress in recent years due to a perceived lack of adequate [removed: premium] pricing and an excessive focus on growth at the expense of underwriting discipline in those markets, combined with a significant increase in the level of catastrophe activity.

As such, syndicates and London market carriers, including The Hartford, [removed: are taking] [added: have taken] pricing and underwriting actions to improve [removed: profitability.]

[removed: Additionally] [added: Additionally,] Lloyd’s [removed: have] [added: has] also introduced recent changes which require that members limit the amount of tier 2 capital (e.g. letters of credit) that can be used to meet syndicate solvency capital requirements.

| [removed: PERSONAL LINES] [added: \|PERSONAL LINES] | | |

[removed: 2020] [added: 2021] Earned Premiums of [removed: $3,008] [added: $2,954] by Line of Business

[removed: ][added: ]

[removed: 2020] [added: 2021] Earned Premiums of [removed: $3,008] [added: $2,954] by Product

[removed: ][added: ]

Business sold to AARP members, either direct or through independent agents, amounted to earned premiums of [removed: $2.8] [added: $2.7] billion, [removed: $2.9 billion and $3.0] [added: $2.8] billion [removed: in 2020, 2019] and [removed: 2018, respectively.]

Among other things, overall rate levels, price segmentation, rating factors and underwriting procedures [removed: are being updated.]

Personal Lines works with carrier partners to provide risk protection options for [added: AARP members with needs beyond the company’s current product offering.]

Personal Lines has made significant investments in offering direct and agency-based customers the opportunity to interact with the company [removed: online,] [added: on-line,] including via mobile devices.

In addition, its technology platform for telephone sales centers enables sales representatives to provide an enhanced experience for direct-to-consumer customers, positioning the Company to offer unique [added: capabilities to AARP’s member base.]

[removed: In] [added: Prior to May 2021, in] most states, new business automobile and home policies [removed: have been] [added: were] issued to AARP members with a lifetime continuation agreement endorsement, providing that the policies will be renewed as long as certain terms are met, such as timely payment of premium and maintaining a driver’s license in good standing.

[removed: Beginning] [added: However, beginning] in [added: May] 2021, Personal Lines [removed: will] no longer [removed: offer] [added: offers] the lifetime continuation agreement [removed: on] [added: to] new business home and automobile [removed: policies, subject to regulatory approval on a state-by-state basis.][added: policies.]

[added: Personal lines insurance is written by insurance companies of varying sizes that compete] principally on the basis of price, product, service, including claims handling, the insurer's ratings and brand recognition.

In recent years, insurers have increased their advertising in the direct-to-consumer [removed: market,] [added: market] in an effort to gain new business and retain profitable business.

The growth of direct-to-consumer sales, including [removed: through] [added: by] new entrants to the marketplace, continues to outpace sales in the agency distribution channel.

| [removed: PROPERTY & CASUALTY] [added: \|P&C] OTHER [removed: OPERATIONS] [added: OPERATIONS] | | |

For a discussion of coverages provided under [removed: policies]

[added: policies] written with exposure to A&E prior to 1986, reported within the P&C Other Operations segment (“Run-off A&E”), run-off assumed reinsurance and all other non-A&E exposures, see Part II, Item 7, MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves.

| [removed: GROUP BENEFITS] [added: \|GROUP BENEFITS] | | |

[removed: 2020] [added: 2021] Premiums and Fee Income of [removed: $5,536][added: $5,687]

[removed: ][added: ]

| Group Disability | | | Typically comprised of short-term [removed: disability, long-term disability,] [added: disability] and [removed: family leave coverage] [added: long-term disability plans] that [removed: pays] [added: pay] a percentage of an employee’s salary for a period of time if they are ill or injured and cannot perform the duties of their [removed: job or absent from work to care for a family member.] [added: job.] Short-term and long-term disability policies have elimination periods that must be satisfied prior to benefit payments. The Company also earns fee income from leave management services [added: for federal, state] and [added: employer family and medical leave programs, as well as] the administration of [removed: underwriting, enrollment and claims processing for] employer self-funded [added: disability] plans. | | |

In addition, the segment offers a single-company leave management solution, which integrates work absence data from the insurer’s short-term and long-term group disability and [removed: workers’ compensation insurance business with its leave management administration services.]

[removed: Policies are typically] sold with one, two or three-year rate guarantees depending upon the product and market segment.

[removed: Top tier insurers in] the marketplace also offer on-line and self-service capabilities to third party distributors and consumers.

recent years, including due to lower claim frequency that occurred during the pandemic.

These distribution partners are leveraging data and analytics for bargaining power.

Carriers that can quote business in an automated way have a competitive advantage by shortening the time from quoting to issuance.

Through its ICON quoting tool, The Hartford quotes over 70% of its Spectrum package business and workers’ compensation new business policies without human intervention.

In addition, some larger brokers are now becoming competitors through acquisition of managing general agents or managing general underwriters.

Carriers in this marketplace seek to differentiate their product offerings, including by leveraging their umbrella and excess liability underwriting capacity to sell other lines of business.

Global specialty writes many surplus lines of business which are lines of business not written through standard products licensed or admitted in a state.

Since 2010, surplus lines has accounted for an increasing share of total commercial lines industry direct written premiums.

Customers served by the global specialty marketplace expect tailored policy language for their unique risks and, increasingly, are looking for a single insurance carrier to meet all their coverage needs.

The Company has been successful in cross-selling global specialty product lines acquired through the Navigators Insurance Group acquisition to customers of small commercial and of middle & large commercial and seeks to expand cross-sell opportunities in the future.

The Hartford competes on the basis of its underwriting capabilities where it uses data and actuarial insights to enhance risk selection.

The Company seeks to drive greater efficiency, shorten the quoting process and improve the customer’s experience through

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| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | | | |

expanded use of digital capabilities.

While global specialty benefitted from firm market conditions in 2020 and 2021, more capital has entered the specialty lines marketplace, increasing competition and putting downward pressure on rates.

profitability.

| | | | |

| --- | --- | --- | --- |

$2.9 billion in 2021, 2020 and 2019, respectively.

The AARP relationship provides The Company with a competitive advantage to capitalize on the continued growth of the over age-50 population.

During 2021, the Company began introducing its new product, Prevail, which is being rolled out for new business on a state-by-state basis through 2022 and into 2023 and was in seven states as of December, 2021.

Prevail is tailored to the mature market and includes digital service capabilities that provide real time transaction support.

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| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | | | |

Part I - Item 1.

Business

are being updated through the introduction of Prevail.

Marketing and Distribution

The direct-to-consumer channel continues to represent a larger share of the automobile insurance market, accounting for more than one-third of premiums.

New business premium growth partly depends on the rate that consumers shop for insurance and while shopping rates have generally rebounded since the depths of the pandemic, they have rebounded more slowly in the 50-plus age segment.

The endorsement will remain on renewal policies with original new business effective dates prior to May 2021.

Competition

Larger carriers have the advantage of economies of scale with the top ten personal lines insurers accounting for approximately 70% of market share.

Carriers, including The Hartford, have invested in telematics capabilities to enable better risk selection and pricing segmentation in response to changes in driving patterns.

In 43 states, the Hartford offers its telematics program, TrueLane, which offers discounts for good driving behavior based on such attributes as braking, speed, distracted driving, and acceleration.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Automobile | | | Covers damage to a business's fleet of vehicles due to collision or other perils (automobile physical damage). In addition to first party automobile physical damage, commercial automobile covers liability for bodily injuries and property damage suffered by third parties and losses caused by uninsured or under-insured motorists. | | |

| Property | | | Covers the building a business owns or leases as well as its personal property, including tools and equipment, inventory, and furniture. A commercial property insurance policy covers losses resulting from fire, wind, hail, earthquake, theft and other covered perils, including coverage for assets such as accounts receivable and valuable papers and records. Commercial property may include specialized equipment insurance, which provides coverage for loss or damage resulting from the mechanical breakdown of boilers and machinery. | | |

| General Liability | | | Covers a business in the event it is sued for causing harm to a person and/or damage to property. General liability insurance covers third-party claims arising from accidents occurring on the insured’s premises or arising out of their operations. General liability insurance may also cover losses arising from product liability and provides replacement of lost income due to an event that interrupts business operations. | | |

| Marine | | | Encompasses various ocean and inland marine coverages including cargo, craft, hull, specie, transport and liability, among others. | | |

| Package Business | | | Covers both property and general liability damages. | | |

| Workers' Compensation | | | Covers employers for losses incurred due to employees sustaining an injury, illness or disability in connection with their work. Benefits paid under workers’ compensation policies may include reimbursement of medical care costs, replacement income, compensation for permanent injuries and benefits to survivors. Workers’ compensation is provided under both guaranteed cost policies (coverage for a fixed premium) and loss sensitive policies where premiums are adjustable based on the loss experience of the employer. | | |

| Professional Liability | | | Covers liability arising from directors and officers acting in their official capacity and liability for errors and omissions committed by professionals and others. Coverage may also provide employment practices insurance relating to allegations of wrongful termination and discrimination. | | |

| Bond | | | Encompasses fidelity and surety insurance, including commercial surety, contract surety and fidelity bonds. Commercial surety includes bonds that insure non-performance by contractors, license and permit bonds to help meet government-mandated requirements and probate and judicial bonds for fiduciaries and civil court proceedings. Contract surety bonds may include payment and performance bonds for contractors. Fidelity bonds may include ERISA bonds related to the handling of retirement plan assets and bonds protecting against employee theft or fraud. The Company also provides credit and political risk insurance offered to clients with global operations. | | |

| Assumed Reinsurance | | | Includes assumed reinsurance of property, liability, surety, credit and political, agriculture, and marine risks throughout the world but principally in Europe and North America. | | |

Through its three lines of business of small commercial, middle & large commercial, and global specialty, Commercial Lines offers its products and services to businesses in the United States ("U.S.") and internationally.

Commercial Lines generally consists of products written for small businesses and middle market companies as well as national and multi-national accounts, largely distributed through retail agents and brokers, wholesale agents and global and specialty reinsurance brokers.

The majority of Commercial Lines written premium is generated by small commercial and middle market, which provide coverage options and customized pricing based on the policyholder’s individual risk characteristics.

Small commercial and middle market lines within middle & large commercial are generally referred to as standard commercial lines.

Small commercial provides coverages for small businesses, which the Company generally considers to be businesses with an annual payroll under $12, revenues under $25 and property values less than $20 per location.

Within small commercial, both property and general liability coverages are offered under a single package policy, marketed under the Spectrum name.

Small commercial also provides excess and surplus lines coverage to small businesses including umbrella, general liability, property and other coverages.

Middle & large commercial business provides insurance coverages to medium-sized and national accounts businesses, which are companies whose payroll, revenue and property values exceed the small business definition.

In addition to offering standard commercial lines products, middle & large commercial

includes program business which provides tailored programs, primarily to customers with common risk characteristics.

On national accounts, a significant portion of the business is written through large deductible programs.

Other programs written within middle & large commercial are retrospectively-rated where the premiums are adjustable based on loss experience.

Also within middle & large commercial, the Company writes captive programs business, which provides tailored programs to those seeking a loss sensitive solution where premiums are adjustable based on loss experience.

On May 23, 2019, the Company acquired Navigators Group, a global specialty insurer.

Revenues and earnings of the Navigators Group business are included in operating results of the Company's Commercial Lines segment since the acquisition date.

For discussion of this transaction, see Note 2- Business Acquisitions of Notes to Consolidated Financial Statements.

The products are marketed and

The Hartford’s middle & large commercial business will leverage the

Under a retrospectively-rated contract, the ultimate premium collected from the insured is adjusted based on how incurred losses for the policy year develop over time, subject to a minimum and maximum premium.

Global specialty also includes property coverages written through Maxum Specialty Insurance Group ("Maxum").

Due to adverse loss experience over the past couple of years, particularly in ocean marine, property, excess casualty and international professional liability lines, pricing has increased across the industry in response to those loss cost trends.

Nonetheless, the market continues to be highly competitive.

In the bond business, favorable underwriting results in recent years has led to increased competition for market share.

Management and professional lines in both the U.S. and international continue to witness significant firming in price, terms and conditions.

Private company market rates remain strong in reflecting the increased employment practices liability insurance ("EPLI") exposure.

| | | |

| --- | --- | --- |

The Company is in the process of transforming its automobile and homeowners products to regain competitive advantage with the state-by-state rollout of a new automobile product beginning in March of 2021 and the rollout of a new homeowners product beginning in the second quarter of 2021.

AARP members with needs beyond the company’s current product offering.

For a discussion regarding The Hartford’s legal proceedings, see the information contained under “Litigation,” including “COVID-19 Pandemic Business Income Insurance [removed: Coverage Litigation”] [added: Litigation ”] and [removed: “Asbestos] [added: “Run-off Asbestos] and Environmental Claims,” in Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements.

[removed: Market] [added: Part II - Item 5. Market] for the Hartford's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities][added: Securities]

LEGAL PROCEEDINGS

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| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Part II - Item 5.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

[removed: ][added: ]

The aggregate market value of the shares of Common Stock held by non-affiliates of the registrant as of June 30, [removed: 2020] [added: 2021] was approximately [removed: $14] [added: $22] billion, based on the closing price of [removed: $38.55] [added: $61.97] per share of the Common Stock on the New York Stock Exchange on June 30, [removed: 2020.][added: 2021.]

As of February [removed: 18, 2021,] [added: 17, 2022,] there were outstanding [removed: 357,514,315] [added: 331,646,836] shares of Common Stock, $0.01 par value per share, of the registrant.

Portions of the registrant’s definitive proxy statement for its [removed: 2021] [added: 2022] annual meeting of stockholders are incorporated by reference in Part III of this Form 10-K.

[removed: | 1 | | | [BUSINESS](#idc368d1f18534aebba67ca458a76381b_16) | | | [6](#idc368d1f18534aebba67ca458a76381b_16) | | |][added: Business]

| 1A. | | | [RISK [removed: FACTORS](#idc368d1f18534aebba67ca458a76381b_76)] [added: FACTORS](#i995c27a32a614cd39befb7ad103f3b7b_76)] | | | [removed: [21](#idc368d1f18534aebba67ca458a76381b_76)] [added: [22](#i995c27a32a614cd39befb7ad103f3b7b_76)] | | |

| 3 | | | [LEGAL [removed: PROCEEDINGS](#idc368d1f18534aebba67ca458a76381b_82)] [added: PROCEEDINGS](#i995c27a32a614cd39befb7ad103f3b7b_82)] | | | [removed: [35](#idc368d1f18534aebba67ca458a76381b_82)] [added: [36](#i995c27a32a614cd39befb7ad103f3b7b_82)] | | |

| 5 | | | [MARKET FOR THE HARTFORD'S COMMON EQUITY, RELATED STOCKHOLDER [removed: MATTER AND] [added: MATTER](#i995c27a32a614cd39befb7ad103f3b7b_88)[S](#i995c27a32a614cd39befb7ad103f3b7b_88) [AND] ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#idc368d1f18534aebba67ca458a76381b_88)] [added: SECURITIES](#i995c27a32a614cd39befb7ad103f3b7b_88)] | | | [removed: [36](#idc368d1f18534aebba67ca458a76381b_88)] [added: [37](#i995c27a32a614cd39befb7ad103f3b7b_88)] | | |

| 7 | | | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#idc368d1f18534aebba67ca458a76381b_97)] [added: OPERATIONS](#i995c27a32a614cd39befb7ad103f3b7b_97)] | | | [removed: [38](#idc368d1f18534aebba67ca458a76381b_97)] [added: [39](#i995c27a32a614cd39befb7ad103f3b7b_97)] | | |

| 7A. | | | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | | | [removed: \[b\]] [added: \[a\]] | | |

| 8 | | | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | | | [removed: \[c\]] [added: \[b\]] | | |

| 9A. | | | [CONTROLS AND [removed: PROCEDURES](#idc368d1f18534aebba67ca458a76381b_259)] [added: PROCEDURES](#i995c27a32a614cd39befb7ad103f3b7b_265)] | | | [removed: [121](#idc368d1f18534aebba67ca458a76381b_259)] [added: [122](#i995c27a32a614cd39befb7ad103f3b7b_265)] | | |

| 10 | | | [DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE [removed: HARTFORD](#idc368d1f18534aebba67ca458a76381b_265)] [added: HARTFORD](#i995c27a32a614cd39befb7ad103f3b7b_271)] | | | [removed: [123](#idc368d1f18534aebba67ca458a76381b_265)] [added: [124](#i995c27a32a614cd39befb7ad103f3b7b_271)] | | |

| 11 | | | EXECUTIVE COMPENSATION | | | [removed: \[d\]] [added: \[c\]] | | |

| 12 | | | [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER [removed: MATTERS](#idc368d1f18534aebba67ca458a76381b_268)] [added: MATTERS](#i995c27a32a614cd39befb7ad103f3b7b_274)] | | | [removed: [124](#idc368d1f18534aebba67ca458a76381b_268)] [added: [125](#i995c27a32a614cd39befb7ad103f3b7b_274)] | | |

| 13 | | | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | | | [removed: \[e\]] [added: \[d\]] | | |

| 14 | | | PRINCIPAL ACCOUNTING FEES AND SERVICES | | | [removed: \[f\]] [added: \[e\]] | | |

| 15 | | | [EXHIBITS, FINANCIAL STATEMENT [removed: SCHEDULES](#idc368d1f18534aebba67ca458a76381b_274)] [added: SCHEDULES](#i995c27a32a614cd39befb7ad103f3b7b_280)] | | | [removed: [125](#idc368d1f18534aebba67ca458a76381b_274)] [added: [126](#i995c27a32a614cd39befb7ad103f3b7b_280)] | | |

*\[a\] The information [removed: formerly] required by [removed: Item 301 regarding material trend disclosure will be] [added: this item is] set forth in [added: the Enterprise Risk Management section of] Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.*

[removed: *\[c\]] [added: *\[b\]] See Index to Consolidated Financial Statements and Schedules elsewhere herein.*

[removed: *\[d\]] [added: *\[c\]] The information called for by Item 11 will be set forth in the Proxy Statement under the subcaptions "Compensation Discussion and Analysis", "Executive Compensation", "Director Compensation", "Report of the Compensation and Management Development Committee", and "Compensation and Management Development Committee Interlocks and Insider Participation" and is incorporated herein by reference.*

[removed: *\[e\]] [added: *\[d\]] Any information called for by Item 13 will be set forth in the Proxy Statement under the caption and subcaption "Board and Governance Matters" and "Director Independence" and is incorporated herein by reference.*

[removed: *\[f\]] [added: *\[e\]] The information called for by Item 14 will be set forth in the Proxy Statement under the caption "Audit Matters" and is incorporated herein by reference.*

Actual results could differ materially from [removed: expectations,] [added: expectations] depending on the evolution of various factors, including the risks and uncertainties identified below, as well as factors described in such forward-looking statements; or in Part I, Item 1A, Risk Factors, in Part II, Item 7.

- Risks relating to the [removed: pandemic caused by the spread of the novel strain of coronavirus, specifically identified as the Coronavirus Disease 2019 (“COVID-19”)] [added: continued COVID-19 pandemic,] including impacts to the Company's insurance and product-related, regulatory/legal, recessionary and other global economic, capital and liquidity and operational risks

◦weather and other natural physical events, including the intensity and frequency of [removed: storms,] [added: thunderstorms, tornadoes,] hail, wildfires, flooding, winter storms, hurricanes and tropical storms, as well as climate change and its potential impact on weather patterns;

◦the potential for [removed: further] impairments of our goodwill;

◦the risks, challenges and uncertainties associated with capital management plans, expense reduction initiatives and other [removed: actions, which may include acquisitions, divestitures or restructurings;][added: actions;]

[removed: Part] [added: Part] I - Item 1.

[removed: Business][added: Business]

Item [removed: 1.][added: 1.]

The Hartford Financial Services Group, Inc. (together with its subsidiaries, “The Hartford”, the “Company”, “we”, or “our”) is a holding company for a group of subsidiaries that provide property and casualty ("P&C") insurance, group benefits insurance and services, and mutual funds and exchange-traded products to individual and business customers in the United States as well as in the United [removed: Kingdom, continental Europe] [added: Kingdom] and other international locations.

At December 31, [removed: 2020,] [added: 2021,] total assets and total stockholders’ equity of The Hartford were [removed: $74.1] [added: $76.6] billion and [removed: $18.6] [added: $17.8] billion, respectively.

[removed: STRATEGIC] [added: PURPOSE and STRATEGIC] PRIORITIES

[removed: ][added: ]

As we enter [removed: 2021,] [added: 2022,] our strategy remains consistent and we are focused on the following [removed: priorities:][added: priorities across our businesses:]

[removed: - Commercial] [added: Commercial] Lines

[removed: –Benefiting] [added: - Benefiting] from a firm pricing environment in most property and liability lines while navigating continued pricing pressure in workers’ compensation by staying disciplined in our underwriting;

[removed: - Personal] [added: Personal] Lines

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021

| | | | [Part I](#i995c27a32a614cd39befb7ad103f3b7b_13) | | | | | |

| 1 | | | [BUSINESS](#i995c27a32a614cd39befb7ad103f3b7b_16) | | | [6](#i995c27a32a614cd39befb7ad103f3b7b_16) | | |

| 2 | | | [PROPERTIES](#i995c27a32a614cd39befb7ad103f3b7b_79) | | | [36](#i995c27a32a614cd39befb7ad103f3b7b_79) | | |

| | | | [Part II](#i995c27a32a614cd39befb7ad103f3b7b_85) | | | | | |

| 6 | | | RESERVED | | | None | | |

| | | | [Part III](#i995c27a32a614cd39befb7ad103f3b7b_268) | | | | | |

| | | | [Part IV](#i995c27a32a614cd39befb7ad103f3b7b_277) | | | | | |

| | | | [EXHIBITS INDEX](#i995c27a32a614cd39befb7ad103f3b7b_424) | | | [233](#i995c27a32a614cd39befb7ad103f3b7b_424) | | |

| | | | [SIGNATURES](#i995c27a32a614cd39befb7ad103f3b7b_427) | | | [236](#i995c27a32a614cd39befb7ad103f3b7b_427) | | |

|

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| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The Hartford’s mission is to provide people with the support and protection they need to pursue their unique ambitions, seize opportunity, and prevail through unexpected challenge.

Our strategy to maximize value creation for all stakeholders focuses on advancing underwriting excellence, emphasizing digital capabilities, maximizing distribution channels, optimizing organizational efficiency, and advancing environmental, social and governance ("ESG") leadership.

We endeavor to maintain and enhance our position as a market leader by leveraging our core strengths of underwriting excellence, risk management, claims, product development and distribution.

We are investing in claims, analytics, data science and digital capabilities to strengthen our existing competitive advantages.

An ethics, people, and performance-driven culture drives our values.

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| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | | | |

Part I - Item 1.

2022 Priorities

- Advancing leading underwriting capabilities across our portfolio to offer expanded products and services;

- Emphasizing digital, data and analytics, and data science that enhance the customer experience and improve the underwriting and claims decision making;

- Maximizing distribution channels and product breadth to increase market share;

- Optimizing organizational efficiency with a focus on continuous improvement.

For information on the Company’s operational transformation and cost reduction plan (called “Hartford Next”), refer to The Hartford’s Operations section of Part II - Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Before considering investments in new products and technology, we are on track to achieve a reduction in annual insurance operating costs and other expenses of approximately $540 in 2022 and $625 in 2023, relative to 2019;

- Balancing capital deployment for organic growth, investments in the business, and return to stockholders through dividends and share repurchases; and

- Continuing to advance ESG leadership in order to attract and retain top talent and enhance value to stockholders.

Within our businesses, we will continue to pursue objectives specific to each, including:

- Successfully leveraging our broader underwriting capabilities, product breadth, risk appetite and expanded access to cross-sell global specialty product lines to customers of small commercial and middle & large commercial, and grow specialized verticals in middle & large commercial;

- Accelerating use of data, digital technology and voice of customer to transform and differentiate our business; and

- Expanding distribution to match customers’ preferred access points.

| | | | [Part I](#idc368d1f18534aebba67ca458a76381b_13) | | | | | |

| 2 | | | [PROPERTIES](#idc368d1f18534aebba67ca458a76381b_79) | | | [35](#idc368d1f18534aebba67ca458a76381b_79) | | |

| | | | [Part II](#idc368d1f18534aebba67ca458a76381b_85) | | | | | |

| 6 | | | SELECTED FINANCIAL DATA | | | \[a\] | | |

| | | | [Part III](#idc368d1f18534aebba67ca458a76381b_262) | | | | | |

| | | | [Part IV](#idc368d1f18534aebba67ca458a76381b_271) | | | | | |

| | | | [EXHIBITS INDEX](#idc368d1f18534aebba67ca458a76381b_448) | | | [236](#idc368d1f18534aebba67ca458a76381b_448) | | |

| | | | [SIGNATURES](#idc368d1f18534aebba67ca458a76381b_451) | | | [239](#idc368d1f18534aebba67ca458a76381b_451) | | |

*\[b\] The information required by this item is set forth in the Enterprise Risk Management section of Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.*

◦the impacts associated with the withdrawal of the United Kingdom (“U.K.”) from the European Union (“E.U.”) on our international operations in the U.K. and E.U.

The Hartford’s strategy focuses on realizing the full potential of our product capabilities and underwriting expertise, becoming an easier company to do business with, and attracting, retaining and developing the talent needed for long-term success.

The Company endeavors to expand its insurance product offerings and distribution and capitalize on the strength of the Company's brand.

The Company is also working to increase efficiencies through investments in technology.

In 2020, we were focused on increasing shareholder value through a number of initiatives and investments:

- Integrating the acquisition of The Navigators Group, Inc. (“Navigators Group”) successfully, and maximizing our combined potential by deepening our distribution relationships, capitalizing on a broader product portfolio and meeting a wider array of customer needs.

- Increasing the speed and ease of our interactions and business processes through data, digital technology and voice of customer, including expanded use of robotics and continued enhancements to underwriting and quoting platforms.

- Continuing investment in new products and business models such as Spectrum, our next-generation package offering for small businesses, which offers customers tailored coverage recommendations as well as the ability to customize their own coverage, including real-time quote pricing.

We are

investing to maintain market leadership in small commercial as existing competitors and new entrants increase their focus on this business.

Through a planned roll out of new automobile and homeowners insurance products for AARP members, we are investing in our Personal Lines segment to return that business to top line growth.

- Improving the employee experience by investing in our workforce and striving to attract, retain and develop the best talent in the industry, enhance our industry-leading position in diversity and inclusion, and sustain our ethical culture.

We see the benefits of this commitment in our sustained top-decile employee engagement scores.

- Becoming more cost efficient and competitive along with enhancing the experience we provide to agents and customers through an operational transformation and cost reduction plan we commenced in July 2020 called Hartford Next.

Relative to 2019, we expect to achieve a reduction in

annual insurance operating costs and other expenses of approximately $500 by 2022, reducing the P&C expense ratio by 2.0 to 2.5 points, the Group Benefits expense ratio by 1.5 to 2.0 points and the claims expense ratio by approximately 0.5 points.

2020 Financial Results

Our 2020 financial results were affected by COVID-19 claims and the economic effects of the pandemic that reduced insured exposures in both P&C and Group Benefits, including $278 of direct COVID-19 claims in P&C and $230 of COVID impacts in Group Benefits, principally driven by $239 of excess mortality in the group life business.

Apart from these impacts, financial results benefited from favorable non-COVID automobile claim frequency in Personal Lines, a reduction in prior accident year catastrophe reserves, and lower operating expenses.

Full year 2020 net income available to common stockholders was $1.7 billion, or $4.76 per diluted share, and net income return on equity ("ROE") was 10%.

Book value per diluted share rose 15%, to $50.39, primarily due to net income in excess of common stockholder dividends during 2020 and an increase in common stockholders' equity resulting from the impact of lower interest rates on net unrealized investment gains within AOCI.

Total revenues were $20.5 billion, down 1% since 2019 as growth in Commercial Lines, primarily driven by a full year’s earned premium from the Navigators Group acquisition, was more than offset by a change from net realized capital gains in 2019 to net realized capital losses in 2020 as well as the effects of the pandemic, decreasing net investment income and decreasing new business and insured exposures across segments.

We are more than half way through the integration of the Navigators Group business and have significantly improved the profitability of the acquired book of business, through pricing increases and underwriting actions.

The cross-sale of business between global specialty and middle & large commercial has been in-line with or better than the expectations we had at the time we acquired Navigators Group.

In addition, with the pending sale of the continental Europe operations, the go-forward focus of our international business is principally in the Lloyd's of London ("Lloyd's") market and we expect to continue to improve performance of our Lloyd’s syndicate through pricing and other actions.

Our Group Benefits business has continued to benefit from favorable incidence trends in group disability and, as we emerge from the pandemic, remains well-poised to compete moving forward with a complete set of voluntary product offerings.

We will also continue to address business challenges, including the need to return our Personal Lines segment to top line growth and the continued rate pressure on workers’ compensation in response to continued favorable loss cost trends.

In addition, the decline in reinvestment rates will continue to put pressure on investment yields and it remains to be seen whether the market will compensate with higher rate increases to increase underwriting profitability or will accept lower overall returns on equity.

2021 Priorities

–Leveraging advanced analytics and technologies as well as our product breadth, including expanding cross-sale of global specialty products within small commercial and middle & large commercial;

–Continuing our journey to be a top-tier risk player in middle market;

As of December 31, [removed: 2020,] [added: 2021,] The Hartford owned building space totaling approximately 1.8 million square feet consisting principally of 1.77 million square feet for its home office complex in Hartford, Connecticut and other properties within the greater Hartford, Connecticut [removed: area, and approximately 22 thousand square feet in Belgium.][added: area.]

In addition, we lease offices throughout North America, [removed: Europe] [added: the United Kingdom] and other overseas locations to house administrative, claims handling, [removed: sales and other business operations.]

[added: As of December 31, 2021, The Hartford leased] approximately [removed: 1.5] [added: 1.3] million square feet throughout North America, 22 thousand square feet in London and [removed: 11] [added: 5] thousand square feet in other [removed: overseas and European] [added: international] branches.

PROPERTIES

sales and other business operations.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

As of December 31, 2020, The Hartford leased

As of February [removed: 18, 2021,] [added: 17, 2022,] the Company had approximately [removed: 10,150] [added: 9,679] registered holders of record of the Company's common stock.

A substantially greater number of holders of our common stock are “street name” holders or beneficial holders, whose shares [removed: are held of record by banks, brokers and other financial institutions.]

[removed: In] [added: *\[1\]On] December [added: 17,] 2020, the [removed: Company announced] [added: Board of Directors authorized] a [added: new equity repurchase plan for] $1.5 billion [removed: share repurchase authorization by] [added: for] the [removed: Board of Directors which is effective from] [added: period commencing] January 1, 2021 through December 31, 2022.

During the period from January 1, [removed: 2021] [added: 2022] through February [removed: 18, 2021,] [added: 17, 2022,] the Company repurchased [removed: 1.1] [added: 3.8] million shares for [removed: $56.][added: $274.]

The timing of any [removed: future] repurchases [removed: will be] [added: of shares under the remaining equity repurchase authorization is] dependent upon several factors, including the market price of the Company's securities, the Company's capital position, consideration of the effect of any repurchases on the Company's financial strength or credit ratings, [added: the Company's blackout periods,] and other [removed: considerations.][added: considerations.*]

[removed: Total Return to Stockholders][added: | \|TOTAL RETURN TO STOCKHOLDERS | | |]

The following tables present The Hartford’s annual return percentage and five-year total return on its common stock including reinvestment of dividends in comparison to the S&P [removed: 500 and the S&P Insurance Composite Index.]

| Annual Return Percentage | | | | | | | | | | | | | | | | | | [added: | | |]

| | | | [added: | | |] For the years ended | | | | | | | | | | | | | | |

| [removed: Company/Index] [added: Company/Index] | | | 2016 | | | [added: | | | | | |] 2017 | | | 2018 | | | 2019 | | | 2020 | | | [added: 2021 | | | | | |]

| [removed: The] [added: The] Hartford Financial Services Group, [removed: Inc.] [added: Inc.] | | | [removed: 11.81] | | [removed: %] | 20.25 | | % | (19.24 | | %) | 39.71 | | % | (16.98 | | %) | [added: 44.27 | | % |]

| [removed: S&P] [added: S&P] 500 [removed: Index] [added: Index] | | | [removed: 11.96] | | [removed: %] | 21.83 | | % | (4.38 | | %) | 31.49 | | % | 18.40 | | % | [added: 28.71 | | % |]

| [removed: S&P] [added: S&P] Insurance Composite [removed: Index] [added: Index] | | | [removed: 17.58] | | [removed: %] | 16.19 | | % | (11.21 | | %) | 29.38 | | % | (0.44 | | %) | [added: 32.12 | | % |]

[removed: Part] [added: Part] II - Item [removed: 5.][added: 7.]

| Cumulative Five-Year Total Return | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| | | | Base | | | | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| | | | Period | | | [added: | | | | | |] For the years ended | | | | | | | | | | | | | | | [added: | | |]

| [removed: Company/Index | | | 2015] [added: Company/Index] | | | [removed: 2016] | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | [added: 2021 | | |]

| [removed: The] [added: The] Hartford Financial Services Group, [removed: Inc.] [added: Inc.] | | | $ | 100 | | [added: | | | | | |] $ | [removed: 111.81] [added: 120.25] | | $ | [removed: 134.45] [added: 97.11] | | $ | [removed: 108.58] [added: 135.68] | | $ | [removed: 151.70] [added: 112.64] | | $ | [removed: 125.94] [added: 162.51] | | [added: | | |]

[removed: ][added: ]

[removed: Part] [added: Part] II - Item 7.

Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations][added: Operations]

Item [removed: 7.][added: 7.]

On [removed: September 30, 2020,] [added: December 29, 2021,] the Company [removed: entered into a definitive agreement to sell] [added: completed the sale of] all of the issued and outstanding equity of Navigators Holdings (Europe) N.V., a Belgium holding company, and its subsidiaries, Bracht, Deckers & Mackelbert N.V. (“BDM”) and Assurances Contintales Contintale Verzekeringen N.V. (“ASCO”), (collectively referred to as "Continental Europe Operations").

For discussion of [added: reclassifications,] acquisitions, [removed: dispositions] and [removed: reclassifications,] [added: dispositions,] see Note 1 - Basis of Presentation and Significant Accounting [removed: Policies] [added: Policies, Note 2 - Business Acquisitions and Note 22 - Business Dispositions] of Notes to Consolidated Financial Statements.

For discussion of the earliest of the three years included in the financial statements of the current filing, refer to Part 2, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in The Hartford’s [removed: 2019] [added: 2020] Form 10-K Annual Report.

[removed: Index][added: Index]

| [Key Performance Measures and [removed: Ratios](#idc368d1f18534aebba67ca458a76381b_103)] [added: Ratios](#i995c27a32a614cd39befb7ad103f3b7b_103)] | | | [removed: [38](#idc368d1f18534aebba67ca458a76381b_103)] [added: [39](#i995c27a32a614cd39befb7ad103f3b7b_103)] | | |

| [The Hartford's [removed: Operations](#idc368d1f18534aebba67ca458a76381b_106)] [added: Operations](#i995c27a32a614cd39befb7ad103f3b7b_106)] | | | [removed: [43](#idc368d1f18534aebba67ca458a76381b_106)] [added: [44](#i995c27a32a614cd39befb7ad103f3b7b_106)] | | |

| [Consolidated Results of [removed: Operations](#idc368d1f18534aebba67ca458a76381b_112)] [added: Operations](#i995c27a32a614cd39befb7ad103f3b7b_112)] | | | [removed: [49](#idc368d1f18534aebba67ca458a76381b_112)] [added: [49](#i995c27a32a614cd39befb7ad103f3b7b_112)] | | |

| [Investment [removed: Results](#idc368d1f18534aebba67ca458a76381b_115)] [added: Results](#i995c27a32a614cd39befb7ad103f3b7b_115)] | | | [removed: [52](#idc368d1f18534aebba67ca458a76381b_115)] [added: [52](#i995c27a32a614cd39befb7ad103f3b7b_115)] | | |

| [Critical Accounting [removed: Estimates](#idc368d1f18534aebba67ca458a76381b_118)] [added: Estimates](#i995c27a32a614cd39befb7ad103f3b7b_118)] | | | [removed: [54](#idc368d1f18534aebba67ca458a76381b_118)] [added: [54](#i995c27a32a614cd39befb7ad103f3b7b_118)] | | |

| [Commercial [removed: Lines](#idc368d1f18534aebba67ca458a76381b_148)] [added: Lines](#i995c27a32a614cd39befb7ad103f3b7b_148)] | | | [removed: [75](#idc368d1f18534aebba67ca458a76381b_148)] [added: [76](#i995c27a32a614cd39befb7ad103f3b7b_148)] | | |

| [Personal [removed: Lines](#idc368d1f18534aebba67ca458a76381b_151)] [added: Lines](#i995c27a32a614cd39befb7ad103f3b7b_151)] | | | [removed: [80](#idc368d1f18534aebba67ca458a76381b_151)] [added: [81](#i995c27a32a614cd39befb7ad103f3b7b_151)] | | |

| [Property & Casualty Other [removed: Operations](#idc368d1f18534aebba67ca458a76381b_154)] [added: Operations](#i995c27a32a614cd39befb7ad103f3b7b_154)] | | | [removed: [84](#idc368d1f18534aebba67ca458a76381b_154)] [added: [85](#i995c27a32a614cd39befb7ad103f3b7b_154)] | | |

| [Group [removed: Benefits](#idc368d1f18534aebba67ca458a76381b_157)] [added: Benefits](#i995c27a32a614cd39befb7ad103f3b7b_157)] | | | [removed: [85](#idc368d1f18534aebba67ca458a76381b_157)] [added: [86](#i995c27a32a614cd39befb7ad103f3b7b_157)] | | |

| [Hartford [removed: Funds](#idc368d1f18534aebba67ca458a76381b_160)] [added: Funds](#i995c27a32a614cd39befb7ad103f3b7b_160)] | | | [removed: [88](#idc368d1f18534aebba67ca458a76381b_160)] [added: [90](#i995c27a32a614cd39befb7ad103f3b7b_160)] | | |

| [removed: [Corporate](#idc368d1f18534aebba67ca458a76381b_163)] [added: [Corporate](#i995c27a32a614cd39befb7ad103f3b7b_163)] | | | [removed: [90](#idc368d1f18534aebba67ca458a76381b_163)] [added: [92](#i995c27a32a614cd39befb7ad103f3b7b_163)] | | |

| [Enterprise Risk [removed: Management](#idc368d1f18534aebba67ca458a76381b_166)] [added: Management](#i995c27a32a614cd39befb7ad103f3b7b_166)] | | | [removed: [91](#idc368d1f18534aebba67ca458a76381b_166)] [added: [93](#i995c27a32a614cd39befb7ad103f3b7b_166)] | | |

| [Capital Resources and [removed: Liquidity](#idc368d1f18534aebba67ca458a76381b_202)] [added: Liquidity](#i995c27a32a614cd39befb7ad103f3b7b_205)] | | | [removed: [110](#idc368d1f18534aebba67ca458a76381b_202)] [added: [111](#i995c27a32a614cd39befb7ad103f3b7b_205)] | | |

are held of record by banks, brokers and other financial institutions.

Repurchases of common stock by the Company during the quarter ended December 31, 2021 are set forth below.

| Repurchases of Common Stock by the Issuer for the Three Months Ended December 31, 2021 | | | | | | | | | | | | | | |

| Period | | | Total Number of Shares Purchased | | | Average Price Paid Per Share | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs \[1\] | | |

| | | | | | | | | | | | | (in millions) | | |

| October 1, 2021 - October 31, 2021 | | | 1,618,168 | | | $ | 72.42 | | 1,618,168 | | | $ | 1,681 | |

| November 1, 2021 - November 30, 2021 | | | 3,165,842 | | | $ | 71.02 | | 3,165,842 | | | $ | 1,456 | |

| December 1, 2021 - December 31, 2021 | | | 2,328,073 | | | $ | 67.86 | | 2,328,073 | | | $ | 1,298 | |

| Total | | | 7,112,083 | | | $ | 70.31 | | 7,112,083 | | | | | |

The Board of Directors increased this authorization by $1 billion on April 22, 2021 and by $500 on October 28, 2021, bringing the aggregate repurchase authorization to $3.0 billion through December 31, 2022.

| | | | |

| --- | --- | --- | --- |

500 and the S&P Insurance Composite Index.

|

| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | | | |

Part II - Item 5. Market for the Hartford's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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| S&P 500 Index | | | $ | 100 | | | | | | | | $ | 121.83 | | $ | 116.49 | | $ | 153.18 | | $ | 181.36 | | $ | 233.43 | | | | |

| S&P Insurance Composite Index | | | $ | 100 | | | | | | | | $ | 116.19 | | $ | 103.17 | | $ | 133.48 | | $ | 132.89 | | $ | 175.57 | | | | |

|

| [Financial Highlights](#i995c27a32a614cd39befb7ad103f3b7b_109) | | | [48](#i995c27a32a614cd39befb7ad103f3b7b_109) | | |

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| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | [Index to MD&A](#i995c27a32a614cd39befb7ad103f3b7b_97) | | |

and dilutive potential common shares.

|

| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | [Index to MD&A](#i995c27a32a614cd39befb7ad103f3b7b_97) | | |

Part II - Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

| Integration and other non-recurring M&A costs, before tax | | | 58 | | | 51 | | | 91 | | |

*\[1\] Primarily represents the federal income tax expense (benefit) related to before tax items not included in core earnings and includes the effect of changes in net deferred taxes due to changes in enacted tax rates.*

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| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | [Index to MD&A](#i995c27a32a614cd39befb7ad103f3b7b_97) | | |

Part II - Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

adjustment expenses incurred for both the current and prior accident years.

These revenues and expenses increase or decrease with a rise or fall in AUM whether caused by changes in the market or through net flows.

previous policy term.

Policy Count Retention- Represents the ratio of the number of renewal policies issued during the current year period divided by the number of policies issued in the previous calendar period before considering policies cancelled subsequent to renewal.

|

The Company did not repurchase any shares during the three months ended December 31, 2020.

The Company's prior share repurchase program, which was authorized by the Board of Directors in February 2019, expired on December 31, 2020.

| S&P 500 Index | | | $ | 100 | | $ | 111.96 | | $ | 136.40 | | $ | 130.42 | | $ | 171.49 | | $ | 203.04 | |

| S&P Insurance Composite Index | | | $ | 100 | | $ | 117.58 | | $ | 136.62 | | $ | 121.31 | | $ | 156.95 | | $ | 156.26 | |

On May 23, 2019, the Company completed the acquisition of Navigators Group, a specialty underwriter.

calculated by dividing (a) common stockholders' equity, excluding AOCI, after tax, by (b) common shares outstanding and dilutive potential common shares.

a business or to reinsure loss reserves, are not a recurring operating expense of the business.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Pension settlement, before tax | | | — | | | — | | | — | | |

| Integration and transaction costs associated with acquired business, before tax | | | 51 | | | 91 | | | 47 | | |

| Loss (income) from discontinued operations, net of tax | | | — | | | — | | | (322) | | |

accident years.

The number of

Premium Retention- Represents renewal premium written in the current period divided by total premium written in the prior period.

The number of policies available to renew represents the number of policies, net of any cancellations, written in the previous policy term.

A number of factors affect renewal written price increases (decreases) including

Talcott Resolution is the holding company of the life and annuity business that was sold in May 2018.

In addition, Corporate includes a 9.7% ownership interest in the legal entity that acquired the life and annuity business sold.

During the second quarter of 2020, the Company extended this agreement through December 31, 2032.

exposure in the Group Benefits investment portfolio, cash flow patterns related to the payment of benefits and claims are uncertain and actual investment yields could differ significantly from expected investment yields, affecting profitability of the business.

Impact to revenues

The COVID-19 pandemic has caused significant disruption to the economy of the U.S. and other countries in which we operate.

Due to government restrictions that have prevented some businesses from offering goods and services to their customers and due to shelter-in-place guidelines that have reduced business activity, many of our customers, especially small businesses, have had to curtail their operations or have found they are unable to meet cash flow needs due to declining business volume, causing some to lay off workers.

As one of the largest providers of small business insurance in the U.S., in 2020, we experienced a 3% year over year decline in our small commercial written premium although trends improved in the second half of 2020.

to the expected decline in small commercial written and earned premium, other business lines in Commercial Lines have also been negatively affected due to government-mandated restrictions and stay-at-home guidelines reducing business activity and due to consumers having less disposable income or less willingness to spend on the products and services that our commercial lines policyholders sell.

Excluding the effect of the Navigators acquisition, Commercial Lines written premium declined $290, or 4%, year over year driven by lower new business and due to endorsements or other changes to in-force policies that decrease premiums to reflect reduced exposures.

Within Commercial Lines, workers’ compensation written premium declined year over year, partly due to declining payrolls as a result of the economic effects of COVID-19.

Contributing to a 6% decline in Personal Lines written premium in 2020 was the effect of increased shopping behaviors, and lower new business levels arising out of the competitive marketplace.

In addition, The Hartford provided a 15 percent refund on policyholders’ April, May and June personal automobile insurance premiums which reduced Personal Lines written and earned premiums by $81 in the second quarter of 2020.

Because of the economic stress caused by COVID-19, we also experienced a higher amount of uncollectible premiums receivable in 2020.

As a result, to reflect our higher expectation of credit losses, The Hartford increased its allowance for credit losses ("ACL") on premiums receivable by $40 in the twelve months ended December 31, 2020.

Total net investment income decreased in 2020 primarily due to a lower yield on fixed maturity investments resulting from lower reinvestment rates and lower yields on floating rate securities, partially offset by a higher level of invested assets, due in part to the acquisition of Navigators Group.

In an effort to stimulate the economy, central banks have reduced benchmark interest rates to near zero, impacting our yields on floating rate securities and reinvestment rates.

From late March to mid-May, 2020, the Company temporarily reinvested receipts of interest and proceeds from maturing fixed maturity investments in liquid, short-term investments.

While the Company resumed investing in fixed maturities in May, 2020, lower interest rates since the pandemic began have generally resulted in lower investment yields on newly invested funds.

A prolonged period of lower interest rates could depress the Company's net investment income such that to earn the same level of return on equity we may have to charge higher premiums for the insurance products we sell unless loss costs similarly lessen.

Net realized capital gains (losses) on equity securities for the year ended December 31, 2020 totaled $(214) before tax, consisting of unrealized mark-to-market gains (losses) on equity securities held and net realized gains (losses) on equity securities sold, net of realized gains on equity derivative hedges.

While equity markets in the last nine months of 2020 increased more than the value they lost during the first quarter, economic conditions remain uncertain and if equity markets were to experience similar declines as occurred in the first quarter of 2020, we may incur more net realized capital losses in future periods.

Net realized capital losses for the year ended December 31, 2020 also included $47 of increases in the allowance for credit losses, partially offset by reversals of the allowance due to improvements in market value or sales, and $5 of intent-to-sell impairments.

The increase in the allowance for credit losses in the twelve month period included increases of $28 on available for sale fixed maturities and increases of $19 on commercial mortgage loans.

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

We have audited the internal control over financial reporting of The Hartford Financial Services Group, Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, [removed: 2020,] [added: 2021,] of the Company and our report dated February [removed: 19, 2021,] [added: 18, 2022,] expressed an unqualified opinion on those financial statements.

[removed: Part] [added: Part] III - Item 10.

Directors, Executive Officers [removed: and] [added: ad] Corporate Governance of The [removed: Hartford][added: Hartford]

February 18, 2022

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February 19, 2021

Certain of the information called for by Item 10 will be set forth in the definitive proxy statement for the [removed: 2021] [added: 2022] annual meeting of stockholders (the “Proxy Statement”) to be filed by The Hartford with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K under the captions and subcaptions “Board and Governance Matters”, and “Director Nominees" and is incorporated herein by reference.

Set forth below is information about the other executive officers of the Company as of February [removed: 10, 2021:][added: 17, 2022:]

| Jonathan R. Bennett | | | [removed: 56] [added: 57] | | | Executive Vice President and Head of Group Benefits (August [removed: 2019 - Present);] [added: 2019-present);] Chief Financial Officer and Head of Strategy for Property and Casualty and Group Benefits (October, 2012-August 2019) | | |

| Beth A. Costello | | | [removed: 53] [added: 54] | | | Executive Vice President and Chief Financial Officer (July 2014-present) | | |

| Douglas G. Elliot | | | [removed: 60] [added: 61] | | | President (July 2014-present) | | |

| Scott R. Lewis | | | [removed: 58] [added: 59] | | | Senior Vice President and Controller (May 2013-present) | | |

| Robert W. Paiano | | | [removed: 59] [added: 60] | | | Executive Vice President and Chief Risk Officer (June [removed: 2017-Present);] [added: 2017-present);] Senior Vice President & Treasurer (July 2010-May 2017) | | |

| David C. Robinson | | | [removed: 55] [added: 56] | | | Executive Vice President and General Counsel (June 2015-present) | | |

| Lori A. Rodden | | | [removed: 50] [added: 51] | | | Executive Vice President Chief Human Resources Officer (October 2019-present); Senior Vice President and Lead Human Resources Business Partner for Property & Casualty, Group Benefits, Claims and Actuarial (April [removed: 2016 to October] [added: 2016-October] 2019) and Vice President and Lead Human Resources for Middle Market, Large Commercial, Sales & Distribution and underwriting (November [removed: 2014 to April] [added: 2014-April] 2016) | | |

| Amy M. Stepnowski | | | [removed: 52] [added: 53] | | | Executive Vice President Chief Investment Officer (August [removed: 2020-Present);] [added: 2020-present);] President of Hartford Investment Management Company (August 2020-Present); Managing Director and Head of Public Credit Research Hartford Investment Management Company (September 2008-August 2020) | | |

[removed: Part] [added: Part] III - Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters][added: Matters]

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE HARTFORD

| Claire H. Burns | | | 53 | | | Chief Marketing and Communications Officer (September 2021-present); Chief Marketing and Strategy Officer, Prudential International (February 2018-July 2021); Senior Vice President and Chief Customer Officer, MetLife (November 2012-January 2018) | | |

| John J. Kinney | | | 50 | | | Executive Vice President, Head of Claims & Operations (August 2021-present); Chief Claims Officer (April 2013-August 2021) | | |

| Deepa Soni | | | 52 | | | Executive Vice President, Head of Technology, Data, Analytics & Information Security (August 2021-present); Chief Information Officer (September 2019-August 2021); U.S. Chief Information Officer, BMO Financial Group (April 2016-September 2019) | | |

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| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | | | |

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| William A. Bloom | | | 57 | | | Executive Vice President of Operations and Technology (August 2014 - present); President of Global Client Services, EXL (July 2010-July 2014) | | |

| Kathleen M. Bromage | | | 63 | | | Chief Marketing and Communications Officer (June 2015-present) | | |

The following table provides information as of December 31, [removed: 2020] [added: 2021] about the securities authorized for issuance under the Company’s equity compensation plans.

The Company maintains The Hartford [removed: 2005 Incentive Stock Plan (the “2005 Stock Plan”), The Hartford] 2010 Incentive Stock Plan (the “2010 Stock Plan”), The Hartford 2014 Incentive Stock Plan (the "2014 Stock Plan"), the 2020 Stock Incentive Plan (the "2020 Stock Plan") (collectively the "Stock Plans") and The Hartford Employee Stock Purchase Plan (the “ESPP”).

To the extent that any awards under the [removed: 2005 Stock Plan, the] 2010 Stock Plan and the 2014 Stock Plan are forfeited, terminated, surrendered, exchanged, expire unexercised or are settled in cash in lieu of stock (including to effect tax withholding) or for the issuance of a lesser number of shares than the number of shares subject to the award, the shares subject to such awards (or the relevant portion thereof) shall be available for award under the 2020 Stock Plan and such shares shall be added to the total number of shares available under the 2020 Stock Plan.

*\[1\]The amount shown in this column includes [removed: 6,693,188] [added: 6,435,452] outstanding options awarded under the [removed: 2005 Stock Plan, the] 2010 Stock Plan, the 2014 Stock Plan and the 2020 Stock Plan.

The amount shown in this column includes [removed: 3,866,452] [added: 4,031,435] outstanding restricted stock [removed: units and 789,237] [added: units, 764,755] outstanding performance shares at 100% of target (which excludes [removed: 276,434] [added: 623,464] shares that vested on December [removed: 27, 2020,] [added: 31, 2021,] related to the [removed: 2018-2020] [added: 2019-2021] performance [removed: period) as] [added: period)* *and 239,182 non-vested dividend equivalent shares* *as] of December 31, [removed: 2020] [added: 2021] under the 2014 Stock Plan and the 2020 Stock Plan.

The maximum number of performance shares that could be awarded is [removed: 1,578,474] [added: 1,529,510] (200% of target) if the Company achieved the highest performance level.

*\[3\]Of these shares, [removed: 3,743,847] [added: 3,544,674] remain available for purchase under the ESPP as of December 31, [removed: 2020.][added: 2021.]

[removed: 11,735,111] [added: 9,667,290] shares remain available for issuance as options, restricted stock units, restricted stock awards or performance shares under the 2020 Stock Plan as of December 31, [removed: 2020.*][added: 2021.*]

[removed: Part] [added: Part] IV.

Exhibits, Financial Statement [removed: Schedules][added: Schedules]

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

| Equity compensation plans approved by stockholders | | | 11,470,824 | | | $ | 47.46 | | 13,211,964 | | | | | |

| Total | | | 11,470,824 | | | $ | 47.46 | | 13,211,964 | | | | | |

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| [Table of Contents](#i995c27a32a614cd39befb7ad103f3b7b_7) | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Equity compensation plans approved by stockholders | | | 11,348,877 | | | $ | 45.54 | | 15,478,958 | | | | | |

| Total | | | 11,348,877 | | | $ | 45.54 | | 15,478,958 | | | | | |

[removed: THE HARTFORD FINANCIAL SERVICES GROUP, INC.][added: Condensed Financial Information of the Hartford Financial Services Group, Inc.]

| [Report of Independent Registered Public Accounting [removed: Firm](#idc368d1f18534aebba67ca458a76381b_280)] [added: Firm](#i995c27a32a614cd39befb7ad103f3b7b_286) \[1\]] | | | [removed: [126](#idc368d1f18534aebba67ca458a76381b_280)] [added: [127](#i995c27a32a614cd39befb7ad103f3b7b_286)] | | |

| [Consolidated Statements of Operations — For the Years Ended December [removed: 31, 2020, 2019 and 2018](#idc368d1f18534aebba67ca458a76381b_283)] [added: 31,](#i995c27a32a614cd39befb7ad103f3b7b_289) [202](#i995c27a32a614cd39befb7ad103f3b7b_289)[1](#i995c27a32a614cd39befb7ad103f3b7b_289)[, 20](#i995c27a32a614cd39befb7ad103f3b7b_289)[20](#i995c27a32a614cd39befb7ad103f3b7b_289) [and 201](#i995c27a32a614cd39befb7ad103f3b7b_289)9] | | | [removed: [128](#idc368d1f18534aebba67ca458a76381b_283)] [added: [129](#i995c27a32a614cd39befb7ad103f3b7b_289)] | | |

| [Consolidated Statements of Comprehensive [removed: Income (Loss) —] [added: Income](#i995c27a32a614cd39befb7ad103f3b7b_292) [—] For the Years Ended December [removed: 31, 2020, 2019] [added: 31,](#i995c27a32a614cd39befb7ad103f3b7b_292) [2021, 2020] and [removed: 2018](#idc368d1f18534aebba67ca458a76381b_286)] [added: 201](#i995c27a32a614cd39befb7ad103f3b7b_289)9] | | | [removed: [129](#idc368d1f18534aebba67ca458a76381b_286)] [added: [130](#i995c27a32a614cd39befb7ad103f3b7b_292)] | | |

| [Consolidated Statements of Changes in Stockholders’ Equity — For the Years Ended December [removed: 31, 2020, 2019] [added: 31,](#i995c27a32a614cd39befb7ad103f3b7b_298) [2021, 2020] and [removed: 2018](#idc368d1f18534aebba67ca458a76381b_295)] [added: 201](#i995c27a32a614cd39befb7ad103f3b7b_289)9] | | | [removed: [131](#idc368d1f18534aebba67ca458a76381b_295)] [added: [132](#i995c27a32a614cd39befb7ad103f3b7b_298)] | | |

| [Consolidated Statements of Cash Flows — For the Years Ended December 31, [removed: 2020, 2019 and 2018](#idc368d1f18534aebba67ca458a76381b_298)] [added: 202](#i995c27a32a614cd39befb7ad103f3b7b_301)[1](#i995c27a32a614cd39befb7ad103f3b7b_301)[, 20](#i995c27a32a614cd39befb7ad103f3b7b_301)[20](#i995c27a32a614cd39befb7ad103f3b7b_301) [and 20](#i995c27a32a614cd39befb7ad103f3b7b_301)[1](#i995c27a32a614cd39befb7ad103f3b7b_301)9] | | | [removed: [132](#idc368d1f18534aebba67ca458a76381b_298)] [added: [133](#i995c27a32a614cd39befb7ad103f3b7b_301)] | | |

| [removed: [Note] [added: Note] 1 - Basis of Presentation and Significant Accounting [removed: Policies](#idc368d1f18534aebba67ca458a76381b_304)] [added: Policies] | | | [removed: [133](#idc368d1f18534aebba67ca458a76381b_304)] | | | [added: | | |]

| [Note 2 - Business [removed: Acquisitions](#idc368d1f18534aebba67ca458a76381b_310)] [added: Acquisitions](#i995c27a32a614cd39befb7ad103f3b7b_310)] | | | [removed: [142](#idc368d1f18534aebba67ca458a76381b_310)] [added: [142](#i995c27a32a614cd39befb7ad103f3b7b_310)] | | |

| [Note 3 - [removed: Earnings (Loss) per Share](#idc368d1f18534aebba67ca458a76381b_313)] [added: Earnings](#i995c27a32a614cd39befb7ad103f3b7b_313) [P](#i995c27a32a614cd39befb7ad103f3b7b_313)[er](#i995c27a32a614cd39befb7ad103f3b7b_313) [Common](#i995c27a32a614cd39befb7ad103f3b7b_313) [Share](#i995c27a32a614cd39befb7ad103f3b7b_313)] | | | [removed: [144](#idc368d1f18534aebba67ca458a76381b_313)] [added: [144](#i995c27a32a614cd39befb7ad103f3b7b_313)] | | |

| [Note 4 - Segment [removed: Information](#idc368d1f18534aebba67ca458a76381b_316)] [added: Information](#i995c27a32a614cd39befb7ad103f3b7b_316)] | | | [removed: [145](#idc368d1f18534aebba67ca458a76381b_316)] [added: [144](#i995c27a32a614cd39befb7ad103f3b7b_316)] | | |

| [Note 5 - Fair Value [removed: Measurements](#idc368d1f18534aebba67ca458a76381b_319)] [added: Measurements](#i995c27a32a614cd39befb7ad103f3b7b_319)] | | | [removed: [148](#idc368d1f18534aebba67ca458a76381b_319)] [added: [147](#i995c27a32a614cd39befb7ad103f3b7b_319)] | | |

| [Note 6 - [removed: Investments](#idc368d1f18534aebba67ca458a76381b_325)] [added: Investments](#i995c27a32a614cd39befb7ad103f3b7b_325)] | | | [removed: [157](#idc368d1f18534aebba67ca458a76381b_325)] [added: [156](#i995c27a32a614cd39befb7ad103f3b7b_325)] | | |

| [Note 10 - Deferred Policy Acquisition [removed: Costs](#idc368d1f18534aebba67ca458a76381b_346)] [added: Costs](#i995c27a32a614cd39befb7ad103f3b7b_337)] | | | [removed: [174](#idc368d1f18534aebba67ca458a76381b_346)] [added: [173](#i995c27a32a614cd39befb7ad103f3b7b_337)] | | |

| [Note 11 - Goodwill & Other Intangible [removed: Assets](#idc368d1f18534aebba67ca458a76381b_349)] [added: Assets](#i995c27a32a614cd39befb7ad103f3b7b_340)] | | | [removed: [174](#idc368d1f18534aebba67ca458a76381b_349)] [added: [173](#i995c27a32a614cd39befb7ad103f3b7b_340)] | | |

| [Note 12 - Reserve for Unpaid Losses and Loss Adjustment [removed: Expenses](#idc368d1f18534aebba67ca458a76381b_355)] [added: Expenses](#i995c27a32a614cd39befb7ad103f3b7b_343)] | | | [removed: [176](#idc368d1f18534aebba67ca458a76381b_358)] [added: [174](#i995c27a32a614cd39befb7ad103f3b7b_346)] | | |

| [Note 13 - Reserve for Future Policy [removed: Benefits](#idc368d1f18534aebba67ca458a76381b_364)] [added: Benefits](#i995c27a32a614cd39befb7ad103f3b7b_352)] | | | [removed: [200](#idc368d1f18534aebba67ca458a76381b_364)] [added: [199](#i995c27a32a614cd39befb7ad103f3b7b_352)] | | |

| [removed: [Note 15 - Commitments] [added: Commitments] and [removed: Contingencies](#idc368d1f18534aebba67ca458a76381b_373)] [added: Contingencies (Note 15)] | | | [removed: [204](#idc368d1f18534aebba67ca458a76381b_373)] | | | [added: | | |]

| [Note 18 - Accumulated Other Comprehensive [removed: Income (Loss),] [added: Income](#i995c27a32a614cd39befb7ad103f3b7b_385)[,] Net of [removed: Tax](#idc368d1f18534aebba67ca458a76381b_403)] [added: Tax](#i995c27a32a614cd39befb7ad103f3b7b_385)] | | | [removed: [210](#idc368d1f18534aebba67ca458a76381b_403)] [added: [210](#i995c27a32a614cd39befb7ad103f3b7b_385)] | | |

[removed: | [Note 19 - Employee Benefit Plans](#idc368d1f18534aebba67ca458a76381b_406) | | | [212](#idc368d1f18534aebba67ca458a76381b_406) | | |][added: EMPLOYEE BENEFIT PLANS]

| [Note 20 - Stock Compensation [removed: Plans](#idc368d1f18534aebba67ca458a76381b_412)] [added: Plans](#i995c27a32a614cd39befb7ad103f3b7b_391)] | | | [removed: [219](#idc368d1f18534aebba67ca458a76381b_412)] [added: [218](#i995c27a32a614cd39befb7ad103f3b7b_391)] | | |

[removed: | [Note 23 - Restructuring and Other Costs](#idc368d1f18534aebba67ca458a76381b_427) | | | [225](#idc368d1f18534aebba67ca458a76381b_427) | | |][added: RESTRUCTURING AND OTHER COSTS]

| [Schedule I — Summary of Investments — Other Than Investments in [removed: Affiliates](#idc368d1f18534aebba67ca458a76381b_430)] [added: Affiliates](#i995c27a32a614cd39befb7ad103f3b7b_406)] | | | [removed: [227](#idc368d1f18534aebba67ca458a76381b_430)] [added: [225](#i995c27a32a614cd39befb7ad103f3b7b_406)] | | |

| [Schedule II — Condensed Financial Information of The Hartford Financial Services Group, [removed: Inc](#idc368d1f18534aebba67ca458a76381b_433).] [added: Inc](#i995c27a32a614cd39befb7ad103f3b7b_409).] | | | [removed: [228](#idc368d1f18534aebba67ca458a76381b_433)] [added: [226](#i995c27a32a614cd39befb7ad103f3b7b_409)] | | |

| [Schedule III — Supplementary Insurance [removed: Information](#idc368d1f18534aebba67ca458a76381b_436)] [added: Information](#i995c27a32a614cd39befb7ad103f3b7b_412)] | | | [removed: [231](#idc368d1f18534aebba67ca458a76381b_436)] [added: [229](#i995c27a32a614cd39befb7ad103f3b7b_412)] | | |

[removed: | [Schedule V —] Valuation and Qualifying [removed: Accounts](#idc368d1f18534aebba67ca458a76381b_442) | | | [234](#idc368d1f18534aebba67ca458a76381b_442) | | |][added: Accounts]

| [removed: [Schedule] [added: Schedule] VI — Supplemental Information Concerning Property and Casualty Insurance [removed: Operations](#idc368d1f18534aebba67ca458a76381b_445)] [added: Operations] | | | [removed: [235](#idc368d1f18534aebba67ca458a76381b_445)] [added: \[2\]] | | |

| [removed: [Table] [added: [Table] of [removed: Contents](#idc368d1f18534aebba67ca458a76381b_7)] [added: Contents](#i995c27a32a614cd39befb7ad103f3b7b_7)] | | | [removed: [Index] [added: [Index] to Consolidated Financial Statements and [removed: Schedules](#idc368d1f18534aebba67ca458a76381b_277)] [added: Schedules](#i995c27a32a614cd39befb7ad103f3b7b_283)] | | | [added: | | |]

We have audited the accompanying consolidated balance sheets of The Hartford Financial Services Group, Inc. and its subsidiaries (the "Company") as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of operations, comprehensive [removed: income (loss),] [added: income,] changes in stockholders' equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] 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, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with accounting principles generally accepted in the United States of America.