Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations


Fixed Maturities, AFS by Type
	September 30, 2021												December 31, 2020
	Amortized Cost		ACL		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Percent of Total Fair Value		Amortized Cost		ACL		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Percent of Total Fair Value
Asset-backed securities ("ABS")
Consumer loans	$	1,026	$	—	$	17	$	—	$	1,043	2.4	%	$	1,396	$	—	$	35	$	—	$	1,431	3.2	%


Other	161		—		3		—		164		0.3	%	129		—		4		—		133		0.3	%

Collateralized loan obligations ("CLOs")	3,002		—		10		(1)		3,011		6.9	%	2,780		—		7		(7)		2,780		6.2	%



CMBS
Agency [1]	1,489		—		90		(3)		1,576		3.6	%	1,779		—		117		(6)		1,890		4.2	%
Bonds	2,238		—		126		(5)		2,359		5.3	%	2,160		—		159		(13)		2,306		5.1	%
Interest only	242		—		15		(1)		256		0.6	%	280		—		10		(2)		288		0.6	%
Corporate
Basic industry	755		—		45		(2)		798		1.8	%	727		—		69		(1)		795		1.8	%
Capital goods	1,426		—		99		(5)		1,520		3.5	%	1,488		—		148		(11)		1,625		3.6	%
Consumer cyclical	1,253		—		72		(3)		1,322		3.0	%	1,434		(1)		108		(1)		1,540		3.4	%
Consumer non-cyclical	2,571		—		196		(4)		2,763		6.3	%	2,878		—		314		(4)		3,188		7.1	%
Energy	1,434		(1)		128		(1)		1,560		3.6	%	1,474		(1)		147		(4)		1,616		3.6	%
Financial services	4,329		—		265		(10)		4,584		10.4	%	4,523		(21)		398		(4)		4,896		10.9	%
Tech./comm.	2,715		(3)		255		(9)		2,958		6.7	%	2,651		—		370		(3)		3,018		6.7	%
Transportation	730		—		53		(1)		782		1.8	%	747		—		85		(3)		829		1.8	%
Utilities	1,854		—		168		(6)		2,016		4.6	%	1,999		—		250		—		2,249		5.0	%
Other	530		—		29		(1)		558		1.3	%	480		—		37		—		517		1.1	%
Foreign govt./govt. agencies	916		—		40		(3)		953		2.2	%	842		—		77		—		919		2.0	%
Municipal bonds
Taxable	1,073		—		96		(2)		1,167		2.7	%	1,084		—		109		(1)		1,192		2.6	%
Tax-exempt	7,040		—		680		(9)		7,711		17.5	%	7,480		—		831		—		8,311		18.5	%
RMBS
Agency	1,455		—		60		(6)		1,509		3.4	%	1,829		—		92		(2)		1,919		4.3	%
Non-agency	1,538		—		18		(5)		1,551		3.5	%	1,755		—		41		(1)		1,795		4.0	%
Alt-A	15		—		1		—		16		—	%	27		—		2		—		29		0.1	%
Sub-prime	204		—		6		—		210		0.5	%	355		—		9		—		364		0.8	%
U.S. Treasuries	3,489		—		83		(17)		3,555		8.1	%	1,264		—		141		—		1,405		3.1	%
Total fixed maturities, AFS	$	41,485	$	(4)	$	2,555	$	(94)	$	43,942	100.0	%	$	41,561	$	(23)	$	3,560	$	(63)	$	45,035	100.0	%
Fixed maturities, FVO [2]									$	75											$	—

*[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. government.

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

The fair value of fixed maturities, AFS decreased as compared with December 31, 2020, primarily due to a decrease in valuations due to higher interest rates, partially offset by tighter credit spreads. The Company decreased holdings of corporate bonds, RMBS, consumer loans, agency CMBS, and tax-exempt municipal bonds, while increasing holdings in U.S. treasuries and CLOs.

Commercial & Residential Real Estate

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


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Exposure to CMBS & RMBS Bonds as of September 30, 2021
	AAA				AA				A				BBB				BB and Below				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
CMBS
Agency [1]	$	1,485	$	1,572	$	4	$	4	$	—	$	—	$	—	$	—	$	—	$	—	$	1,489	$	1,576
Bonds	951		1,011		576		609		440		462		183		190		88		87		2,238		2,359
Interest Only	143		152		90		94		—		—		8		9		1		1		242		256
Total CMBS	2,579		2,735		670		707		440		462		191		199		89		88		3,969		4,191
RMBS
Agency	1,433		1,486		22		23		—		—		—		—		—		—		1,455		1,509
Non-Agency	576		589		458		461		376		374		114		113		14		14		1,538		1,551
Alt-A	1		1		—		—		—		—		—		—		14		15		15		16
Sub-Prime	8		8		34		35		71		73		28		29		63		65		204		210
Total RMBS	2,018		2,084		514		519		447		447		142		142		91		94		3,212		3,286
Total CMBS & RMBS	$	4,597	$	4,819	$	1,184	$	1,226	$	887	$	909	$	333	$	341	$	180	$	182	$	7,181	$	7,477


Exposure to CMBS & RMBS Bonds as of December 31, 2020
	AAA				AA				A				BBB				BB and Below				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
CMBS
Agency [1]	$	1,771	$	1,882	$	8	$	8	$	—	$	—	$	—	$	—	$	—	$	—	$	1,779	$	1,890
Bonds	1,009		1,101		541		582		423		430		170		179		17		14		2,160		2,306
Interest Only	177		183		90		93		8		7		4		4		1		1		280		288
Total CMBS	2,957		3,166		639		683		431		437		174		183		18		15		4,219		4,484
RMBS
Agency	1,807		1,894		22		25		—		—		—		—		—		—		1,829		1,919
Non-Agency	1,034		1,063		371		380		313		315		36		36		1		1		1,755		1,795
Alt-A	—		—		3		3		2		2		2		2		20		22		27		29
Sub-Prime	1		1		25		26		114		116		102		105		113		116		355		364
Total RMBS	2,842		2,958		421		434		429		433		140		143		134		139		3,966		4,107
Total CMBS & RMBS	$	5,799	$	6,124	$	1,060	$	1,117	$	860	$	870	$	314	$	326	$	152	$	154	$	8,185	$	8,591

*[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. government.

The Company also has exposure to commercial mortgage loans. These loans are collateralized by real estate properties that are diversified both geographically throughout the United States and by property type. These commercial loans are originated by the Company as high quality whole loans, and the Company may sell participation interests in one or more loans to third parties. A loan participation interest represents a pro-rata share in interest and principal payments generated by the participated loan, and the relationship between the Company as loan originator, lead participant and servicer and the third party as a participant are governed by a participation agreement.

As of September 30, 2021, mortgage loans had an amortized cost of $5.1 billion and carrying value of $5.1 billion, with an ACL of $26. As of December 31, 2020, mortgage loans had an amortized cost of $4.5 billion and carrying value of $4.5 billion, with an ACL of $38. The decrease in the allowance is primarily attributable to improved economic scenarios, partially offset by

an increase driven by net additions of new loans.

The Company funded $949 of commercial mortgage loans with a weighted average loan-to-value (“LTV”) ratio of 56% and a weighted average yield of 2.8% during the nine months ended September 30, 2021. The Company continues to originate commercial mortgage loans in high growth markets across the country focusing primarily on institutional-quality industrial, retail, and multi-family properties with strong LTV ratios. There were no mortgage loans held for sale as of September 30, 2021 or December 31, 2020.

Municipal Bonds

The following table presents the Company's exposure to municipal bonds by type and weighted average credit quality included in the preceding Securities by Type table.


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Available For Sale Investments in Municipal Bonds
	September 30, 2021					December 31, 2020
	Amortized Cost		Fair Value		Weighted Average Credit Quality	Amortized Cost		Fair Value		Weighted Average Credit Quality
General Obligation	$	1,010	$	1,129	AA	$	1,082	$	1,232	AA+
Pre-refunded [1]	679		715		AAA	889		940		AAA
Revenue
Transportation	1,617		1,791		A	1,441		1,636		A+
Health Care	1,250		1,370		A+	1,273		1,407		A+
Leasing [2]	855		916		AA	905		985		AA-
Education	702		770		AA+	732		824		AA
Water & Sewer	509		543		AA	644		694		AA
Sales Tax	363		424		AA	394		464		AA
Power	318		356		A+	401		450		A+
Housing	106		111		AA	102		109		AA+
Other	704		753		AA-	701		762		A+
Total Revenue	6,424		7,034		AA-	6,593		7,331		AA-
Total Municipal	$	8,113	$	8,878	AA-	$	8,564	$	9,503	AA-

*[1]*Pre-refunded bonds are bonds for which an irrevocable trust containing sufficient U.S. treasury, agency, or other securities has been established to fund the remaining payments of principal and interest.

*[2]*Leasing revenue bonds are generally the obligations of a financing authority established by the municipality that leases facilities back to a municipality. The notes are typically secured by lease payments made by the municipality that is leasing the facilities financed by the issue. Lease payments may be subject to annual appropriation by the municipality, or the municipality may be obligated to appropriate general tax revenues to make lease payments.

As of September 30, 2021, the largest issuer concentrations were the State of California, the New York City Municipal Water Finance Authority, and the Pennsylvania State Turnpike Commission, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds. As of December 31, 2020, the largest issuer concentrations were the New York State Dormitory Authority, the Commonwealth of Massachusetts, and the New York City Municipal Water Finance Authority, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds. In total, municipal bonds make up 15% of the fair value of the Company's investment portfolio. 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 in the second half of 2020 and year-to-date in 2021.

Limited Partnerships and Other Alternative Investments

The following table presents the Company’s investments in limited partnerships and other alternative investments which include hedge funds, real estate funds, and private equity funds. Real estate funds consist of investments primarily in real estate joint ventures and, to a lesser extent, equity funds. Private equity funds primarily consist of investments in funds whose assets typically consist of a diversified pool of investments in small to mid-sized non-public businesses with high growth potential and strong owner sponsorship, as well as limited exposure to public markets.

Income or losses on investments in limited partnerships and alternative investments are recognized on a lag as results from

private equity investments and other funds are generally reported on a three-month delay.


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Limited Partnerships and Other Alternative Investments - Net Investment Income
	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
	Amount		Yield [1]		Amount		Yield [1]		Amount		Yield [1]		Amount		Yield [1]
Hedge funds	$	7	15.6	%	$	6	15.1	%	$	26	19.7	%	$	4	3.9	%
Real estate funds	85		39.3	%	19		18.6	%	111		20.4	%	33		10.7	%
Private equity funds	144		53.0	%	37		16.9	%	358		52.8	%	29		4.5	%
Other alternative investments [2]	23		19.4	%	21		22.2	%	67		21.3	%	4		1.3	%
Total	$	259	39.6	%	$	83	18.3	%	$	562	33.7	%	$	70	5.2	%

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


Investments in Limited Partnerships and Other Alternative Investments
	September 30, 2021				December 31, 2020
	Amount		Percent		Amount		Percent
Hedge funds	$	215	7.3	%	$	158	7.6	%
Real estate funds	1,073		36.2	%	563		27.0	%
Private equity and other funds	1,192		40.3	%	944		45.4	%
Other alternative investments [2]	481		16.2	%	417		20.0	%
Total	$	2,961	100.0	%	$	2,082	100.0	%

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

Fixed Maturities, AFS — Unrealized Loss Aging

The total gross unrealized losses were $94 as of September 30, 2021 and have increased $31, from December 31, 2020, primarily due to higher interest rates, partially offset by tighter credit spreads. As of September 30, 2021, $91 of the gross unrealized losses were associated with fixed maturities, AFS depressed less than 20% of amortized cost. The remaining $3 of gross unrealized losses were associated with fixed maturities, AFS depressed greater than 20%, primarily related to commercial real estate securities that were purchased at tighter credit spreads.

As part of the Company’s ongoing investment monitoring process, the Company has reviewed its fixed maturities, AFS in an unrealized loss position and concluded that these fixed maturities are temporarily depressed and are expected to recover in value as the investments approach maturity or as market spreads tighten. For these fixed maturities in an unrealized loss position where an ACL has not been recorded, the Company’s best estimate of expected future cash flows are sufficient to recover the amortized cost basis of the investment. Furthermore, the Company neither has an intention to sell nor does it expect to be required to sell these Investments. For further information regarding the Company’s ACL analysis, see the Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments section below.


Unrealized Loss Aging for Fixed Maturities, AFS Securities
	September 30, 2021									December 31, 2020
Consecutive Months	Items	Amortized Cost		ACL		Unrealized Loss		Fair Value		Items	Amortized Cost		ACL		Unrealized Loss		Fair Value
Three months or less	560	$	6,346	$	—	$	(49)	$	6,297	102	$	625	$	—	$	(3)	$	622
Greater than three to six months	116	660		—		(3)		657		46	367		—		(5)		362
Greater than six to nine months	180	1,102		—		(22)		1,080		8	6		—		(1)		5
Greater than nine to eleven months	26	89		—		(3)		86		186	1,275		(1)		(27)		1,247
Twelve months or more	175	586		—		(17)		569		205	994		—		(27)		967
Total	1,057	$	8,783	$	—	$	(94)	$	8,689	547	$	3,267	$	(1)	$	(63)	$	3,203


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Unrealized Loss Aging for Fixed Maturities, AFS Continuously Depressed Over 20%
	September 30, 2021							December 31, 2020
Consecutive Months	Items	Amortized Cost		Unrealized Loss		Fair Value			Items	Amortized Cost		Unrealized Loss		Fair Value
Three months or less	—	$	—	$	—	$	—		2	$	2	$	(1)	$	1

Greater than six to nine months	—	—		—		—			1	46		(10)		36
Greater than nine to eleven months	1	2		(1)		1			2	5		(1)		4
Twelve months or more	21	4		(2)		2			24	5		(2)		3
Total	22	$	6	$	(3)	$	3		29	$	58	$	(14)	$	44

Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments

Three and nine months ended September 30, 2021

There were no changes to the ACL for the three months ended September 30, 2021. For the nine months ended September 30, 2021, the Company recorded a net decrease in the ACL of $4, driven by increases in the fair value of corporate issuers that had an ACL in prior periods, partially offset by new expected credit losses on a media/entertainment company. Unrealized losses on securities with an ACL recognized in other comprehensive income were less than $1 for both the three and nine months ended September 30, 2021. For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

There were no intent-to-sell impairments in the three and nine months ended September 30, 2021.

The Company incorporates its best estimate of future performance using internal assumptions and judgments that are informed by economic and industry specific trends, as well as our expectations with respect to security specific developments.

Future intent-to-sell impairments or credit losses may develop as the result of changes in our intent to sell specific securities that are in an unrealized loss position or if modeling assumptions, such as macroeconomic factors or security specific developments, change unfavorably from our current modeling assumptions, resulting in lower cash flow expectations. For a discussion of impacts resulting from the COVID-19 pandemic, refer to the Impact of COVID-19 on our financial condition, results of operations and liquidity section of this MD&A.

Three and nine months ended September 30, 2020

The Company recorded net credit losses on fixed maturities, AFS of $1 and $33, respectively, for the three and nine months ended September 30, 2020. The losses for the three months ended September 30, 2020, were primarily attributable to one tax-exempt municipal bond impacted by COVID-19, partially offset by increases in the fair value of securities that had an ACL recorded in prior periods. For the nine months ended September 30, 2020, net credit losses primarily include an increase in ACL for corporate fixed maturities, mainly one private regional and commercial aircraft lessor and one cruise line issuer. Unrealized losses on securities with an ACL

recognized in other comprehensive income were $0 and $1 for the three and nine months ended September 30, 2020.

Intent-to-sell impairments were $0 and $5 for the three and nine months ended September 30, 2020, respectively, with impairments in the nine month period primarily related to one corporate issuer in the energy sector and one issuer with exposure to India.

ACL on Mortgage Loans

Three and nine months ended September 30, 2021

The Company reviews mortgage loans on a quarterly basis to estimate the ACL with changes in the ACL recorded in net realized gains and losses. Apart from an ACL recorded on individual mortgage loans where the borrower is experiencing financial difficulties, the Company records an ACL on the pool of mortgage loans based on lifetime expected credit losses. For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

For the three and nine months ended September 30, 2021, the Company recorded an increase (decrease) in the ACL on mortgage loans of $2 and ($12), respectively. The increase in the allowance for the three months ended September 30, 2021, was driven by net additions of new loans. The decrease in the allowance for the nine months ended September 30, 2021, was primarily the result of improved economic scenarios, partially offset by an increase driven by net additions of new loans. The Company did not record an ACL on any individual mortgage loans.

Three and nine months ended September 30, 2020

For the three and nine months ended September 30, 2020, the Company recorded an increase (decrease) in the ACL on mortgage loans of ($5) and $19, respectively. The decrease in the allowance for the three months ended September 30, 2020, was the result of improved property valuations in certain industry sectors that have been less impacted by the COVID-19 pandemic and modestly improved economic forecasts. The increase in the allowance for the nine months ended September 30, 2020, was due to the effects of the COVID-19 pandemic and its impacts on the economic forecasts, as well as lower estimated property values and operating income. The Company did not record an ACL on any individual mortgage loans.


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Part I - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

CAPITAL RESOURCES AND LIQUIDITY

The following section discusses the overall financial strength of The Hartford and its insurance operations including their ability to generate cash flows from each of their business segments, borrow funds at competitive rates and raise new capital to meet operating and growth needs over the next twelve months.

|SUMMARY OF CAPITAL RESOURCES AND LIQUIDITY

Capital available to the holding company as of September 30, 2021:

$2.1 billion in fixed maturities, short-term investments, investment sales receivable and cash at The HFSG Holding Company.
A senior unsecured revolving credit facility that provides for borrowing capacity up to $750 of unsecured credit through March 29, 2023 (which was subsequently extended through October 27, 2026). As of September 30, 2021, there were no borrowings outstanding; and
An intercompany liquidity agreement that allows for short-term advances of funds among the HFSG Holding Company and certain affiliates of up to $2.0 billion for liquidity and other general corporate purposes. As of September 30, 2021, there were no borrowings outstanding.

2021 expected dividends and other sources of capital:

The future payment of dividends from our subsidiaries is dependent on several factors including the extent to which COVID-19 impacts our business, results of operations, financial condition and liquidity.

P&C -** The Company's U.S. property and casualty insurance subsidiaries have dividend capacity of $1.7 billion for 2021, with approximately $1.1 billion of net dividends expected in 2021, including $780 paid to HFSG Holding Company through September 30, 2021.
Group Benefits -** HLA has dividend capacity of $295 in 2021 with approximately $295 of dividends expected in 2021, including $220 paid to HFSG Holding Company through September 30, 2021.
Hartford Funds** - HFSG Holding Company expects to receive approximately $165 in dividends from Hartford Funds in 2021, including $121 received through September 30, 2021.
As part of the sale of Talcott Resolution, which was completed on June 30, 2021, the Company received $217 of proceeds.

Expected liquidity requirements for the next twelve months as of September 30, 2021:

$220 of interest on debt;
$21 dividends on preferred stock, subject to the discretion of the Board of Directors;
$520 of common stockholders' dividends, subject to the discretion of the Board of Directors and before share repurchases; and
$600 7.875% junior subordinated debentures expected to be called at par in April of 2022.

Equity repurchase program:

During the nine months ended September 30, 2021, the Company repurchased 19 million common shares for $1.2 billion under the share repurchase program authorized in December 2020, which is effective through December 31, 2022. The share repurchase program was initially authorized at $1.5 billion and, in April 2021, was increased to $2.5 billion. In October 2021, the Company announced an additional increase in the share repurchase authorization to $3.0 billion, which remains effective until December 31, 2022. The Company expects to utilize approximately $1.5 billion of this share repurchase authorization during 2021, subject to market conditions. During the period October 1, 2021 through October 27, 2021, the Company repurchased approximately 1.5 million common shares for $108.

The timing of any future repurchases will be 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, the Company's blackout periods, and other considerations.

|LIQUIDITY REQUIREMENTS AND SOURCES OF CAPITAL

The Hartford Financial Services Group, Inc. ("HFSG Holding Company")

The liquidity requirements of the holding company of The Hartford Financial Services Group, Inc. will primarily be met by HFSG Holding Company's fixed maturities; short-term investments and cash; and dividends, principally from its subsidiaries.

The Company maintains sufficient liquidity and has a variety of contingent liquidity resources to manage liquidity across a range of economic scenarios. We continue to expect to successfully manage our liquidity throughout the pandemic.

The HFSG Holding Company expects to continue to receive dividends from its operating subsidiaries in the future and manages the capital and surplus in each of its operating subsidiaries to be sufficient under significant economic stress scenarios. Dividends from subsidiaries and other sources of


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Part I - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

funds at the Holding Company may be used to repurchase shares under the authorized share repurchase program at the discretion of management.

Under significant economic stress scenarios that could arise due to the COVID-19 pandemic, the Company has the ability to meet short-term cash requirements, if needed, by borrowing under its revolving credit facility or by having its insurance subsidiaries take collateralized advances under a facility with the Federal Home Loan Bank of Boston (“FHLBB”). The Company could also choose to have its insurance subsidiaries sell certain highly liquid, high quality fixed maturities or the Company could issue debt in the public markets under its shelf registration.

During the second quarter, the Company contributed €15 million ($18) to Navigators Holdings (Europe) N.V., a Belgium holding company.

Debt

On September 21, 2021, The Hartford issued $600 of 2.9% senior notes (“2.9% Notes”) due September 15, 2051 for net proceeds of approximately $588, after deducting underwriting discounts and expenses from the offering. Interest is payable semi-annually in arrears on March 15 and September 15, commencing March 15, 2022. The Hartford, at its option, can redeem the 2.9% Notes at any time, in whole or part, at a redemption price equal to the greater of 100% of the principal amount being redeemed or a make-whole amount based on a comparable maturity US Treasury plus 20 basis points, plus any accrued and unpaid interest, except the 2.9% Notes may be redeemed at par within six months of maturity. The Hartford intends to use the net proceeds along with other available resources to repay The Hartford's $600 7.875% junior subordinated debentures (“7.875% Notes”), which are redeemable at par on or after April 15, 2022. The Hartford expects to recognize a loss on extinguishment of debt of $9, before tax, on redemption.

For additional information on Debt, see Note 11 - Debt of Notes to Condensed Consolidated Financial Statements.

|DIVIDENDS

The Hartford's Board of Directors declared the following quarterly dividends since July 1, 2021:

Common Stock Dividends


Declared	Record	Payable	Amount per share





July 21, 2021	September 1, 2021	October 4, 2021	$	0.350
October 28, 2021	December 1, 2021	January 4, 2022	$	0.385

Preferred Stock Dividends


Declared	Record	Payable	Amount per share





July 21, 2021	November 1, 2021	November 15, 2021	$	375.00

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

For a discussion of restrictions on dividends to the HFSG Holding Company from its insurance subsidiaries, see the

following "Dividends from Subsidiaries" discussion. For a discussion of potential restrictions on the HFSG Holding Company's ability to pay dividends, see the risk factor "Our ability to declare and pay dividends is subject to limitations" in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

|DIVIDENDS FROM SUBSIDIARIES

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

The payment of dividends by Connecticut-domiciled insurers is limited under the insurance holding company laws of Connecticut. These laws require notice to and approval by the state insurance commissioner for the declaration or payment of any dividend, which, together with other dividends or distributions made within the preceding twelve months, exceeds the greater of (i) 10% of the insurer’s statutory policyholder surplus as of December 31 of the preceding year or (ii) net income (or net gain from operations, if such company is a life insurance company) for the twelve-month period ending on the thirty-first day of December last preceding, in each case determined under statutory insurance accounting principles. In addition, if any dividend of a Connecticut-domiciled insurer exceeds the insurer’s earned surplus, it requires the prior approval of the Connecticut Insurance Commissioner.

Property casualty insurers domiciled in New York, including Navigators Insurance Company ("NIC") and Navigators Specialty Insurance Company ("NSIC"), generally may not, without notice to and approval by the state insurance commissioner, pay dividends out of earned surplus in any twelve-month period that exceeds the lesser of (i) 10% of the insurer’s statutory policyholders’ surplus as of the most recent financial statement on file, or (ii) 100% of its adjusted net investment income, as defined, for the same twelve month period.

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

Corporate members of Lloyd's syndicates may pay dividends to its parent to the extent of available profits that have been distributed from the syndicate in excess of the Funds at Lloyd's ("FAL") capital requirement. The FAL is determined based on the syndicate’s solvency capital requirement ("SCR") under the E.U.'s Solvency II capital adequacy model, the current regulatory framework governing UK domiciled insurers, plus a Lloyd’s specific economic capital assessment.


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

Through the first nine months of 2021, HFSG Holding Company received approximately $1.1 billion of net dividends from its subsidiaries, including $220 from HLA, $121 from Hartford Funds and $780 from its U.S. P&C subsidiaries, excluding $100 of P&C dividends that were subsequently contributed to a P&C subsidiary and $37 of P&C dividends related to interest payments on an intercompany note owed by Hartford Holdings, Inc. ("HHI") to Hartford Fire Insurance Company.

Over the remainder of 2021, the Company anticipates receiving approximately $325 of net dividends from its U.S. P&C subsidiaries, approximately $75 of dividends from HLA and approximately $45 of dividends from Hartford Funds.

|OTHER SOURCES OF CAPITAL FOR THE HFSG HOLDING COMPANY

The Hartford endeavors to maintain a capital structure that provides financial and operational flexibility to its insurance subsidiaries, ratings that support its competitive position in the financial services marketplace (see the "Ratings" section below for further discussion), and stockholder returns. As a result, the Company may from time to time raise capital from the issuance of debt, common equity, preferred stock, equity-related debt or other capital securities and is continuously evaluating strategic opportunities. The issuance of debt, common equity, equity-related debt or other capital securities could result in the dilution of stockholder interests or reduced net income to common shareholders due to additional interest expense or preferred stock dividends.

Shelf Registrations

The Hartford filed an automatic shelf registration statement with the Securities and Exchange Commission ("the SEC") on May 17, 2019 that permits it to offer and sell debt and equity securities during the three-year life of the registration statement.

For further information regarding Shelf Registrations, see Note 14 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2020 Form 10-K Annual Report.

Revolving Credit Facility

In 2018, The Hartford entered into a senior unsecured revolving credit facility (the "Credit Facility") that provides up to $750 of unsecured credit through March 29, 2023. As of September 30, 2021, no borrowings were outstanding and no letters of credit were issued under the Credit Facility and The Hartford was in compliance with all financial covenants. On October 27, 2021, The Hartford amended and restated the Credit Facility and extended it through October 27, 2026. For further information regarding the Credit Facility, see Note 11 – Debt of Notes to Condensed Consolidated Financial Statements and Note 14 -

Debt of Notes to Consolidated Financial Statements included in the Company’s 2020 Form 10-K Annual Report.

Intercompany Liquidity Agreements

The Company has $2.0 billion available under an intercompany liquidity agreement that allows for short-term advances of funds among the HFSG Holding Company and certain affiliates of up to $2.0 billion for liquidity and other general corporate purposes. The Connecticut Department of Insurance ("CTDOI") granted approval for certain affiliated insurance companies that are parties to the agreement to treat receivables from a parent, including the HFSG Holding Company, as admitted assets for statutory accounting purposes.

As of September 30, 2021 there were no amounts outstanding at the HFSG Holding Company.

Collateralized Advances with Federal Home Loan Bank of Boston

The Company’s subsidiaries, Hartford Fire Insurance Company (“Hartford Fire”) and Hartford Life and Accident Insurance Company (“HLA”), are members of the FHLBB. Membership allows these subsidiaries access to collateralized advances, which may be short- or long-term with fixed or variable rates. Advances may be used to support general corporate purposes, which would be presented as short- or long-term debt, or to earn incremental investment income, which would be presented in other liabilities consistent with other collateralized financing transactions. As of September 30, 2021, there were no advances outstanding.

For further information regarding collateralized advances with FHLBB, see Note 14 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2020 Form 10-K Annual Report.

Lloyd's Letter of Credit Facilities

The Hartford has entered into a committed credit facility agreement with a syndicate of lenders (the "Club Facility") as well as a non-committed $25 credit facility with a lender (the "Bilateral Facility"). The Club Facility has two tranches with one tranche extending a $104 commitment and the other tranche extending a £85 million ($115 as of September 30, 2021) commitment. As of September 30, 2021, letters of credit with an aggregate face amount of $104 and £83.5 million, or $113, were outstanding under the Club Facility and no letters of credit were outstanding under the Bilateral Facility.

Among other covenants, the Club Facility and Bilateral Facility contain financial covenants regarding The Hartford's consolidated net worth and financial leverage and that limit the amount of letters of credit that can support Funds and Lloyd's, consistent with Lloyd's requirements. As of September 30, 2021, The Hartford was in compliance with all financial covenants of both facilities.

For further information regarding the Club Facility and the Bilateral Facility, see Note 14 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2020 Form 10-K Annual Report.


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|PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

The Company does not have a 2021 required minimum funding contribution for the U.S. qualified defined benefit pension plan and the funding requirements for all pension plans are expected to be immaterial. Based on the funded status of the U.S. qualified defined benefit pension plan, the Company does not anticipate making a contribution to the plan in 2021.

|DERIVATIVE COMMITMENTS

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings, as set by nationally recognized statistical rating agencies, of the individual legal entity that entered into the derivative agreement. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could terminate agreements and demand immediate settlement of the outstanding net derivative positions transacted under each agreement. For further information, refer to Note 13 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.

As of September 30, 2021, no derivative positions would be subject to immediate termination in the event of a downgrade of one level below the current financial strength ratings. This could change as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated.

|INSURANCE OPERATIONS

While subject to variability period to period, underwriting and investment cash flows continue to provide sufficient liquidity to meet anticipated demands over the next twelve months. For information about the impact of COVID-19 on the Company's cash flows see the Risk Factors disclosed in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. For a discussion and tabular presentation of the Company’s contractual obligations by period, refer to Off-Balance Sheet Arrangements and Aggregate Contractual Obligations within the Capital Resources and Liquidity section of the MD&A included in The Hartford’s 2020 Form 10-K Annual Report.

The principal sources of operating funds are premiums, fees earned from assets under management and investment income, while investing cash flows primarily originate from maturities and sales of invested assets. The primary uses of funds are to pay claims, claim adjustment expenses, commissions and other underwriting and insurance operating costs, to pay taxes, to

purchase new investments and to make dividend payments to the HFSG Holding Company.

The Company’s insurance operations consist of property and casualty insurance products (collectively referred to as “Property & Casualty Operations”) and Group Benefits. The Company's insurance operations hold fixed maturity securities including a significant short-term investment position (securities with maturities of one year or less at the time of purchase) to meet liquidity needs. Liquidity requirements that are unable to be funded by the Company's insurance operations' short-term investments would be satisfied with current operating funds, including premiums or investing cash flows, which includes proceeds received through the sale of invested assets. A sale of invested assets could result in significant realized losses.

The following tables represent the fixed maturity holdings, including the aforementioned cash and short-term investments available to meet liquidity needs, for each of the Company’s insurance operations.


Property & Casualty
	As of September 30, 2021
Fixed maturities	$	33,715
Short-term investments	1,232
Cash	199
Less: Derivative collateral	41
Total	$	35,105


Group Benefits Operations
	As of September 30, 2021
Fixed maturities	$	9,923
Short-term investments	224
Cash	20
Less: Derivative collateral	25
Total	$	10,142

|OFF-BALANCE SHEET ARRANGEMENTS AND AGGREGATE CONTRACTUAL OBLIGATIONS

There have been no material changes to the Company’s off-balance sheet arrangements and aggregate contractual obligations since the filing of the Company’s 2020 Form 10-K Annual Report.


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|CAPITALIZATION


Capital Structure
	September 30, 2021			December 31, 2020			Change


Long-term debt	$	4,943		$	4,352		14	%
Total debt	4,943			4,352			14	%
Common stockholders' equity excluding AOCI, net of tax	17,221			17,052			1	%
Preferred stock	334			334			—	%
AOCI, net of tax	307			1,170			(74	%)
Total stockholders’ equity	17,862			18,556			(4	%)
Total capitalization	$	22,805		$	22,908		—	%
Debt to stockholders’ equity	28		%	23		%
Debt to capitalization	22		%	19		%

Total capitalization decreased $103 as of September 30, 2021 compared to December 31, 2020 primarily due to share repurchases in the period and a decrease in AOCI, partially offset by net income in excess of stockholder dividends and an increase in long-term debt due to the issuance of the 2.9% Notes.

For additional information on AOCI, net of tax, including unrealized gains from securities, see Note 15 - Changes In and

Reclassifications From Accumulated Other Comprehensive Income (Loss) and Note 5 - Investments of Notes to Condensed Consolidated Financial Statements. For additional information on debt, see Note 14 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2020 Form 10-K Annual Report.

|CASH FLOW[1]


	Nine Months Ended September 30,
	2021		2020
Net cash provided by operating activities	$	2,889	$	2,655
Net cash used for investing activities	$	(1,748)	$	(1,007)
Net cash used for financing activities	$	(963)	$	(1,579)
Cash and restricted cash– end of period	$	397	$	270

[1] Cash activities in 2021 include cash flows related to Continental Europe Operations classified as held for sale beginning in the third quarter of 2020. See Note 17 - Business Disposition of Notes to Condensed Consolidated Financial Statements for discussion of this transaction.

Cash provided by operating activities increased in 2021 as compared to the prior year period primarily driven by lower operating expenses paid including lower payroll and employee related expenditures, greater cash distributions from limited partnerships, a decline in P&C losses and loss adjustment expenses paid, the impact of Personal Lines premium refunds in the 2020 period, and an increase in Commercial Lines premiums received. Positive cash flow impacts were partially offset by an increase in income taxes paid and an increase in Group Benefits loss and loss adjustment expenses paid in excess of premiums received.

Cash used for investing activities increased in 2021 as compared to the prior year as a result of a decrease from net proceeds to net payments for equity securities, an increase in net payments for partnerships, an increase in net payments for mortgage loans, and a decrease in net proceeds for derivatives, partially offset by an increase from net payments to net proceeds for fixed maturities, a decrease in net payments for short term investments and consideration received from the sale of the Company's equity interest in Talcott Resolution.

Cash used for financing activities decreased primarily due to proceeds from the issuance of debt in 2021, debt repayments in the 2020 period, and a decrease in cash used for securities lending transactions, partially offset by an increase in share repurchases in 2021.

Operating cash flow for the nine months ended September 30, 2021 has been adequate to meet liquidity requirements.

|EQUITY MARKETS

For a discussion of the potential impact of the equity markets on capital and liquidity, see the Financial Risk section in this MD&A and the Financial Risk on Statutory Capital section of the MD&A in the Company's 2020 Form 10-K Annual Report.

|RATINGS

Ratings are an important factor in establishing a competitive position in the insurance marketplace and impact the


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Company's ability to access financing and its cost of borrowing. There can be no assurance that the Company’s ratings will continue for any given period of time, or that they will not be changed. In the event the Company’s ratings are downgraded, the Company’s competitive position, ability to access financing, and its cost of borrowing, may be adversely impacted.

On July 21, 2021, Moody's upgraded the insurance financial strength rating of HLA to A1 from A2. The upgrade reflects HLA’s leading market position in the group benefits and disability business, its distribution capabilities and consistent profitability, as well as implicit support from The Hartford.


Insurance Financial Strength Ratings as of October 27, 2021
	A.M. Best	Standard & Poor’s	Moody’s
Hartford Fire Insurance Company	A+	A+	A1
Hartford Life and Accident Insurance Company	A+	A+	A1
Navigators Insurance Company	A+	A	Not Rated




Other Ratings:
The Hartford Financial Services Group, Inc.:
Senior debt	a-	BBB+	Baa1

These ratings are not a recommendation to buy, sell or hold any of The Hartford's securities and they may be revised or revoked at any time at the sole discretion of the rating organization. Each agency's rating should be evaluated independently of any other agency's rating. The system and number of rating categories can vary across rating agencies.

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 GAAP capital held by the Company in determining the Company's financial strength and credit ratings. Rating agencies may implement changes to their capital formulas that have the effect of increasing the amount of capital we must hold in order to maintain our current ratings. See Risk Factors disclosed in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

|STATUTORY CAPITAL


U.S. Statutory Capital Rollforward for the Company's Insurance Subsidiaries
	Property and Casualty Insurance Subsidiaries [1] [2]		Group Benefits Insurance Subsidiary		Total
U.S statutory capital at January 1, 2021	$	10,795	$	2,601	$	13,396
Statutory income	1,015		58		1,073
Contributions from (dividends to) parent	(780)		(220)		(1,000)

Other items	364		42		406
Net change to U.S. statutory capital	599		(120)		479
U.S statutory capital at September 30, 2021	$	11,394	$	2,481	$	13,875

*[1]*The statutory capital for property and casualty insurance subsidiaries in this table does not include the value of an intercompany note owed by Hartford Holdings, Inc. ("HHI") to Hartford Fire Insurance Company.

*[2]*Excludes insurance operations in the U.K. and Continental Europe.

|CONTINGENCIES

Legal Proceedings

For a discussion regarding The Hartford’s legal proceedings, see the information contained in Note 13 -Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements.

Legislative and Regulatory Developments

COVID-19 Global Pandemic

State and federal retroactive business interruption coverage and other insurance regulatory relief initiatives- State and federal lawmakers are continuing to consider legislation and regulation

in response to COVID-19. There have been proposals to impose retroactive coverage of COVID-19 claims under existing business interruption coverage provisions. If such proposals were enacted, they could represent a material exposure for the Company. Further, some states have adopted, or are considering incorporating, a presumption that if certain workers become infected with COVID-19, such infection would constitute an occupational disease triggering workers’ compensation coverage. In addition, state insurance regulators, including California, New Jersey and New York, have encouraged (and in some cases required) insurers to offer immediate relief to policyholders including refunding and offering discounts for drivers, incorporating flexible payment solutions for families, individuals, and businesses, providing additional time to make payments, waiving insurance premium late fees, pausing cancellation of coverage for personal and commercial policies due to non-payment and policy expiration, and suspending


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personal automobile exclusions for restaurant employees who are transitioning to meal delivery services using their personal automobile policy as coverage. The Hartford offered consumer financial relief including a 15 percent refund on policyholders’ April and May 2020 personal automobile insurance premiums, waived late payments fees for a period of time for business and personal insurance customers and temporarily suspended policy cancellations for policyholders of our Commercial Lines, Personal Lines and Group Benefits segments. As the COVID-19 global pandemic continues, regulators may require us or we may elect to provide additional consumer and/or business financial relief. We may also see this manifest in the review and approval of new rate filings, with regulators applying heightened scrutiny even when rate reductions are proposed. The duration and scope of such regulatory/Company actions are uncertain, and the impacts of such actions could adversely affect the Company’s insurance business.

Federal pandemic risk insurance- Congress is considering possible action for future pandemic risk insurance coverage through a risk sharing mechanism between insurers and the federal government. Timing for any Congressional action with respect to these efforts is uncertain at this time. If such a program were to be enacted, it could represent a significant obligation for the Company in terms of deductible and co-share obligations.

American Rescue Plan Act of 2021- On March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan. The comprehensive bill includes provisions on taxes, healthcare, unemployment benefits, direct payments, state and local funding and other issues. The American Rescue Plan also directed billions of dollars towards the Paycheck Protection Program ("PPP") and Targeted Economic Injury Disaster Loan Advance payments to support small businesses across the nation. Additionally, this law directed $28.6 billion for the Restaurant Revitalization Fund for industry-focused grants. On March 30, 2021, President Biden signed the PPP Extension Act of 2021 which set a new application deadline of May 31, 2021 allowing the Small Business Administration (SBA) to continue processing applications for up to 30 days past the May 31 deadline.

Federal emergency leave legislation- On March 18, 2020, the Families First Coronavirus Response Act ("FFCRA") was signed into law by the President, and was effective from April 1, 2020 to December 31, 2020. This legislation included a number of funding provisions and worker protections including mandated emergency paid sick leave and paid family and medical leave programs. For private employers with fewer than 500 employees, and most public employers, new programs were put in place to guarantee individuals 10 days of paid sick leave, and up to 10 weeks of paid family and medical leave to deal directly with COVID-19. Eligible employers have access to a tax credit to reimburse for costs related to the emergency leave programs. On December 27, 2020, the Consolidated Appropriations Act of 2021 was signed into law and included a bipartisan COVID-19 relief bill. Although the mandatory paid leave provisions from the FFCRA expired on December 31, 2020, the new law extended FFCRA tax credits through March 31, 2021, for covered employers that voluntarily continued to offer paid leave under the FFCRA framework. As part of the American Rescue Plan, Congress again extended certain FFCRA refundable tax credits between April 1 and September 30, 2021, for covered

employers who voluntarily offer emergency paid leave for reasons described under FFCRA. The American Rescue Plan also expands the allowable leaves of absence for purposes of qualifying for the tax credit. The Hartford is providing support for the administration of the family and medical leave component of these voluntary company FFCRA-type leaves for our Group Benefits customers. Congress also approved a $2 trillion Coronavirus Aid, Relief and Economic Security ("CARES") Act. The bill, signed into law on March 27, 2020, focused on providing financial support for small businesses, individuals, emergency workers, airlines and other industries of national security. The CARES Act included several technical corrections to the emergency leave programs and created advance refunding credits, which allow the U.S. Treasury to develop regulations or guidance to permit advancement of the tax credit for both the emergency paid sick leave and paid family and medical leave. While we do not anticipate further emergency Congressional legislative action on paid leave, we continue to closely monitor the federal legislative landscape for possible activity.

Federal tax legislation- In response to the COVID-19 Global Pandemic, Congress, various states and other global jurisdictions have passed numerous pieces of legislation which contain a number of changes to the tax laws in order to aid impacted businesses and individuals, as well as provide economic stimulus. The Company deferred the employer’s portion of the Social Security tax on wages from March 27, 2020 to year-end 2020. Such deferred amounts are due and payable over a two-year period, 50% by December 31, 2021 and 50% by December 31, 2022. The U.S. Treasury and IRS continue to develop guidance implementing these new tax law provisions, and Congress may consider additional technical corrections to these laws. Tax proposals and regulatory initiatives which have been or are being considered by Congress and/or the U.S. Treasury Department could have a material effect on the Company and its insurance businesses. The nature and timing of any Congressional or regulatory action with respect to any such efforts is unclear.

Biden Administration Build Back Better Agenda

Over the last several months the Biden Administration has been calling for Congressional action on the President’s Build Back Better Agenda. The Build Back Better plan outlines funding across traditional infrastructure verticals such as roads, bridges, and highways plus spending for human infrastructure including a national Paid Family and Medical Leave program, clean energy initiatives, and childcare. While Congress is currently considering these proposals, the extent to which the proposed programs will be funded remains unclear.

The bipartisan “Infrastructure Investment and Jobs Act,” which supports traditional infrastructure spending is awaiting a final vote in the U.S. House of Representatives. The delay in passage is largely due to the ongoing debate over the second legislative vehicle under development for funding of human infrastructure programs, which could move through Congress via the budget reconciliation process.

Notably, a national Paid Family and Medical Leave program could affect existing state-based disability and paid leave programs or other products and services that the Company provides through its Group Benefits business.


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If enacted, the effect of the provisions of the Build Back Better Agenda on the Company’s operations and ability to attract new business and retain existing customers is unclear.

Patient Protection and Affordable Care Act of 2010 (the "Affordable Care Act")

It is unclear whether the Administration, Congress or the courts will seek to reverse, amend or alter the ongoing operation of the Affordable Care Act ("ACA"). If such actions were to occur, they may have an impact on various aspects of our business, including our insurance businesses. It is unclear what an amended ACA would entail, and to what extent there may be a transition period for the phase out of the ACA. The impact to The Hartford as an employer would be consistent with other large employers. The Hartford’s core business does not involve the issuance of health insurance, and we have not observed any material impacts on the Company’s workers’ compensation business or group benefits business from the enactment of the ACA. We will continue to monitor the impact of the ACA and any reforms on consumer, broker and medical provider behavior for leading indicators of changes in medical costs or loss payments primarily on the Company's workers' compensation and disability liabilities.

US and International Tax Reform

At the end of 2017, the Tax Cuts and Jobs Act of 2017 ("TCJA") was enacted. The TCJA made significant reforms to the U.S. tax code. The major areas of interest to the Company included the reduction of the corporate tax rate from 35% to 21% and the repeal of the corporate alternative minimum tax ("AMT") and the refunding of AMT credits. As Congress debates action on various spending initiatives, it is considering a variety of proposals to fund the cost of the spending with certain revenue raising measures, including a possible increase in the corporate

tax rate and other changes to taxes owed on income earned outside of the U.S. These and other tax proposals and regulatory initiatives that have been or are being considered by Congress and/or the U.S. Treasury Department could have a material effect on the Company and its insurance businesses. The nature and timing of any Congressional or regulatory action with respect to any such efforts is unclear. For additional information on risks to the Company related to TCJA and other tax proposals, see the risk factor entitled "Changes in federal or state tax laws could adversely affect our business, financial condition, results of operations and liquidity" under "Risk Factors" in Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. On October 8th, the Organization for Economic Cooperation and Development ("OECD") announced that 136 of 140 countries in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting had agreed to an updated final agreement to address tax challenges arising from the digitalization of the economy, including the implementation of a global minimum tax. Since this is dependent on each country implementing the convention through domestic legislation, it is unclear at this point how quickly or uniformly such implementation might occur.

IMPACT OF NEW ACCOUNTING STANDARDS

For a discussion of accounting standards, see Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in The Hartford’s 2020 Form 10-K Annual Report.


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ACRONYMS


A&E Asbestos and Environmental			HIMCO Hartford Investment Management Company
ABS Asset Backed Securities			IBNR Incurred But Not Reported
ACL Allowance for Credit Losses			IT Information Technology
ADC Adverse Development Cover			LCL Liability for Credit Losses
AFS Available-For-Sale			LIBOR London Inter-Bank Offered Rate
ALAE Allocated Loss Adjustment Expenses			LTD Long-Term Disability
AMT Alternative Minimum Tax			LTV Loan-to-Value
AOCI Accumulated Other Comprehensive Income			MD&A Management's Discussion and Analysis
AUM Assets Under Management			NAIC National Association of Insurance Commissioners
CAY Current Accident Year			NIC Navigators Insurance Company
CLO Collateralized Loan Obligation			NICO National Indemnity Company, a subsidiary of Berkshire Hathaway Inc. (“Berkshire”)
CMBS Commercial Mortgage-Backed Securities			NM Not Meaningful
DAC Deferred Policy Acquisition Costs			NOLs Net Operating Loss Carryforwards or Carrybacks
DSCR Debt Service Coverage Ratio			NSIC Navigators Specialty Insurance Company
ERCC Enterprise Risk and Capital Committee			OCI Other Comprehensive Income
ETF Exchange-Traded Funds			OTC Over-the-Counter
ETP Exchange-Traded Products			P&C Property and Casualty
FAL Funds at Lloyd's			PYD Prior Year Development
FASB Financial Accounting Standards Board			RBC Risk-Based Capital
FHLBB Federal Home Loan Bank of Boston			RMBS Residential Mortgage-Backed Securities
GAAP Generally Accepted Accounting Principles			ROA Return on Assets
GB Group Benefits			ROE Return on Equity
HFSG Hartford Financial Services Group, Inc.			SCR Solvency Capital Requirement
HHI Hartford Holdings, Inc.			ULAE Unallocated Loss Adjustment Expenses


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