Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

The Hartford Financial Services Group, Inc.

Hartford, Connecticut

Results of Review of Interim Financial Information

We have reviewed the accompanying condensed consolidated balance sheet of The Hartford Financial Services Group, Inc. and subsidiaries (the "Company") as of March 31, 2024, the related condensed consolidated statements of operations, comprehensive income, changes in stockholders' equity, and cash flows for the three-month periods ended March 31, 2024 and 2023, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 23, 2024, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph regarding a change in accounting principle for the measurement and disclosure of long-duration contracts issued by insurance companies. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ DELOITTE & TOUCHE LLP

Hartford, Connecticut

April 25, 2024


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Operations


	Three Months Ended March 31,
(in millions, except for per share data)		2024		2023
		(Unaudited)
Revenues
Earned premiums		$	5,446	$	5,063
Fee income		333		319
Net investment income		593		515
Net realized gains (losses)		28		(7)
Other revenues		19		20
Total revenues		6,419		5,910
Benefits, losses and expenses
Benefits, losses and loss adjustment expenses		3,611		3,482
Amortization of deferred policy acquisition costs ("DAC")		545		491
Insurance operating costs and other expenses		1,283		1,216



Interest expense		50		50
Amortization of other intangible assets		18		18
Restructuring and other costs		1		—
Total benefits, losses and expenses		5,508		5,257
Income before income taxes		911		653
Income tax expense		158		118


Net income		753		535
Preferred stock dividends		5		5
Net income available to common stockholders		$	748	$	530




Net income available to common stockholders per common share
Basic		$	2.51	$	1.69
Diluted		$	2.47	$	1.66

See Notes to Condensed Consolidated Financial Statements.


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Comprehensive Income


	Three Months Ended March 31,
(in millions)		2024		2023
		(Unaudited)
Net income		$	753	$	535
Other comprehensive income (loss) ("OCI"):
Change in net unrealized gain (loss) on fixed maturities, available-for-sale ("AFS")		(160)		586
Change in unrealized losses on fixed maturities with an allowance for credit losses ("ACL")		1		(6)

Change in net gain (loss) on cash flow hedging instruments		—		8
Change in foreign currency translation adjustments		(1)		2
Change in liability for future policy benefits adjustments		5		(8)
Change in pension and other postretirement plan adjustments		7		5
Other comprehensive income (loss), net of tax		(148)		587
Comprehensive income		$	605	$	1,122

See Notes to Condensed Consolidated Financial Statements.


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Balance Sheets


(in millions, except for share and per share data)	March 31, 2024		December 31, 2023
	(Unaudited)
Assets
Investments:
Fixed maturities, AFS, at fair value (amortized cost of $42,946 and $41,726, and ACL of $18 and $21)	$	40,840	$	39,818
Fixed maturities, at fair value using the fair value option ("FVO Securities")	292		327
Equity securities, at fair value	736		864
Mortgage loans (net of ACL of $48 and $51)	6,197		6,087
Limited partnerships and other alternative investments	4,866		4,785
Other investments	201		191
Short-term investments	2,975		3,850
Total investments	56,107		55,922
Cash	274		126
Restricted cash	48		63
Accrued investment income	415		404
Premiums receivable and agents' balances (net of ACL of $111 and $109)	5,988		5,607
Reinsurance recoverables (net of allowance for uncollectible reinsurance of $101 and $103)	7,094		7,104
Deferred policy acquisition costs	1,169		1,113
Deferred income taxes, net	1,182		1,173
Goodwill	1,911		1,911
Property and equipment, net	879		896
Other intangible assets, net	690		707
Other assets	1,953		1,754

Total assets	$	77,710	$	76,780
Liabilities
Unpaid losses and loss adjustment expenses	$	42,771	$	42,318
Reserve for future policy benefits	479		484
Other policyholder funds and benefits payable	633		638
Unearned premiums	9,020		8,599

Long-term debt	4,363		4,362
Other liabilities	4,976		5,052

Total liabilities	62,242		61,453
Commitments and Contingencies (Note 13)
Stockholders’ Equity
Preferred stock, $0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at March 31, 2024 and December 31, 2023, aggregate liquidation preference of $345	334		334
Common stock, $0.01 par value —1,500,000,000 shares authorized, 326,960,228 shares issued at March 31, 2024 and December 31, 2023	3		3
Additional paid-in capital	551		648
Retained earnings	19,614		19,007
Treasury stock, at cost 30,153,089 and 28,488,130 shares	(2,037)		(1,816)
Accumulated other comprehensive income (loss) ("AOCI"), net of tax	(2,997)		(2,849)
Total stockholders’ equity	15,468		15,327
Total liabilities and stockholders’ equity	$	77,710	$	76,780

See Notes to Condensed Consolidated Financial Statements.


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Changes in Stockholders' Equity


	Three Months Ended March 31,
(in millions, except for share and per share data)		2024		2023
		(Unaudited)
Preferred Stock		$	334	$	334
Common Stock		3		3
Additional Paid-in Capital
Additional Paid-in Capital, beginning of period		648		1,895
Issuance of shares under incentive and stock compensation plans and other		(161)		(114)
Stock-based compensation plans expense		64		66

Additional Paid-in Capital, end of period		551		1,847
Retained Earnings
Retained Earnings, beginning of period		19,007		17,058


Net income		753		535
Dividends declared on preferred stock		(5)		(5)
Dividends declared on common stock		(141)		(134)
Retained Earnings, end of period		19,614		17,454
Treasury Stock, at cost
Treasury Stock, at cost, beginning of period		(1,816)		(1,773)
Treasury stock acquired		(353)		(354)

Issuance of shares under incentive and stock compensation plans from treasury stock and other		211		132
Net shares acquired related to employee incentive and stock compensation plans		(79)		(49)

Treasury Stock, at cost, end of period		(2,037)		(2,044)
Accumulated Other Comprehensive Income (Loss), net of tax
Accumulated Other Comprehensive Income, net of tax, beginning of period		(2,849)		(3,841)


Total other comprehensive income (loss)		(148)		587
Accumulated Other Comprehensive Income (Loss), net of tax, end of period		(2,997)		(3,254)
Total Stockholders’ Equity		$	15,468	$	14,340

Preferred Shares Outstanding		13,800		13,800



Common Shares Outstanding (in thousands)
Common Shares Outstanding, beginning of period		298,472		315,111
Treasury stock acquired		(3,847)		(4,719)
Issuance of shares under incentive and stock compensation plans and other		3,004		2,005
Return of shares under incentive and stock compensation plans to treasury stock		(822)		(617)

Common Shares Outstanding, at end of period		296,807		311,780
Cash dividends declared per common share		$	0.470	$	0.425
Cash dividends declared per preferred share		$	375.00	$	375.00

See Notes to Condensed Consolidated Financial Statements.


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Cash Flows


	Three Months Ended March 31,
(in millions)	2024		2023
Operating Activities	(Unaudited)
Net income	$	753	$	535
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized losses (gains)	(28)		7
Amortization of deferred policy acquisition costs	545		491
Additions to deferred policy acquisition costs	(601)		(548)
Depreciation and amortization	127		129



Other operating activities, net	119		122
Change in assets and liabilities:
Decrease in reinsurance recoverables	11		29
Net change in accrued and deferred income taxes	102		90
Increase in insurance liabilities	870		761
Net change in premiums receivable and agents' balances	(396)		(334)
Net change in other assets and other liabilities	(405)		(411)
Net cash provided by operating activities	1,097		871
Investing Activities
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, AFS	1,548		2,228
Fixed maturities, at fair value using the fair value option	—		—
Equity securities, at fair value	176		1,422
Mortgage loans	165		204
Limited partnership and other alternative investments	32		96
Payments for the purchase of:
Fixed maturities, AFS	(2,752)		(2,767)
Fixed maturities, at fair value using the fair value option	—		—
Equity securities, at fair value	(5)		(891)
Mortgage loans	(268)		(252)
Limited partnership and other alternative investments	(156)		(273)
Net proceeds from derivatives	—		23
Net additions of property and equipment	(50)		(49)
Net proceeds from (payments for) short-term investments	875		(180)
Other investing activities, net	—		(7)


Net cash used for investing activities	(435)		(446)
Financing Activities
Deposits and other additions to investment and universal life-type contracts	37		18
Withdrawals and other deductions from investment and universal life-type contracts	(43)		(42)






Net return of shares under incentive and stock compensation plans	(27)		(32)
Treasury stock acquired	(350)		(350)
Dividends paid on preferred stock	(5)		(5)
Dividends paid on common stock	(141)		(134)
Net cash used for financing activities	(529)		(545)
Foreign exchange rate effect on cash	—		(6)


Net increase (decrease) in cash and restricted cash	133		(126)
Cash and restricted cash – beginning of period	189		344
Cash and restricted cash– end of period	$	322	$	218
Supplemental Disclosure of Cash Flow Information
Income tax paid	$	2	$	—
Interest paid	$	52	$	61

See Notes to Condensed Consolidated Financial Statements.


Table of Contents						Note 1 - Basis of Presentation and Significant Accounting Policies

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Hartford Financial Services Group, Inc. is a holding company for insurance and financial services subsidiaries that provide property and casualty insurance, group benefits insurance and services and mutual funds and exchange-traded funds ("ETF") to individual and business customers in the United States as well as in the United Kingdom and other international locations (collectively, “The Hartford”, the “Company”, “we” or “our”).

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, which differ materially from the accounting practices prescribed by various insurance regulatory authorities. These Condensed Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's 2023 Form 10-K Annual Report. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year.

The accompanying Condensed Consolidated Financial Statements and Notes are unaudited. These financial statements reflect all adjustments (generally consisting only of normal accruals) which are, in the opinion of management, necessary for the fair statement of the financial position, results of operations and cash flows for the interim periods.

Consolidation

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

Use of Estimates

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

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

Reclassifications

Certain reclassifications have been made to prior period financial information to conform to the current period presentation.

2. EARNINGS PER COMMON SHARE


Computation of Basic and Diluted Earnings per Common Share
	Three Months Ended March 31,
(In millions, except for per share data)		2024		2023
Earnings

Net income		$	753	$	535
Less: Preferred stock dividends		5		5




Net income available to common stockholders		$	748	$	530
Shares
Weighted average common shares outstanding, basic		298.1		314.0

Dilutive effect of stock-based awards under compensation plans		4.5		4.6
Weighted average common shares outstanding and dilutive potential common shares		302.6		318.6
Net income available to common stockholders per common share



Basic		$	2.51	$	1.69






Diluted		$	2.47	$	1.66


Table of Contents						Note 3 - Segment Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. SEGMENT INFORMATION

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


Net Income (Loss)
	Three Months Ended March 31,
		2024		2023
Commercial Lines		$	573	$	421
Personal Lines		34		(1)
Property & Casualty Other Operations		8		6
Group Benefits		108		92
Hartford Funds		45		41
Corporate		(15)		(24)
Net income		753		535
Preferred stock dividends		5		5
Net income available to common stockholders		$	748	$	530


Table of Contents						Note 3 - Segment Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Revenues


	Three Months Ended March 31,
		2024		2023
Earned premiums and fee income:
Commercial Lines
Workers’ compensation		$	917	$	898
Liability		526		486
Marine		67		59
Package business		549		484
Property		290		228
Professional liability		203		188
Bond		78		77
Assumed reinsurance		181		138
Automobile		248		218
Total Commercial Lines		3,059		2,776
Personal Lines
Automobile		572		515
Homeowners		249		232
Total Personal Lines [1]		821		747

Group Benefits
Group disability		890		866
Group life		645		643
Other		104		100
Total Group Benefits		1,639		1,609
Hartford Funds
Mutual fund and ETF		231		223
Third-party life and annuity separate accounts		19		18
Total Hartford Funds		250		241
Corporate		10		9
Total earned premiums and fee income		5,779		5,382
Net investment income		593		515
Net realized gains (losses)		28		(7)
Other revenues		19		20
Total revenues		$	6,419	$	5,910

*[1]*For the three months ended March 31, 2024 and 2023, AARP members accounted for earned premiums of $758 and $689, respectively.


Table of Contents						Note 3 - Segment Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Non-Insurance Revenue from Contracts with Customers


		Three Months Ended March 31,
	Revenue Line Item		2024		2023
Commercial Lines
Installment billing fees	Fee income		$	11	$	10
Personal Lines
Installment billing fees	Fee income		8		8
Insurance servicing revenues	Other revenues		19		19
Group Benefits
Administrative services	Fee income		54		51
Hartford Funds


Advisory, servicing and distribution fees	Fee income		250		241
Corporate
Investment management and other fees	Fee income		10		9

Total non-insurance revenues with customers			$	352	$	338

4. FAIR VALUE MEASUREMENTS

The Company carries certain financial assets and liabilities at estimated fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants. Our fair value framework includes a hierarchy that gives the highest priority to the use of quoted prices in active markets, followed by the use of market observable inputs, followed by the use of unobservable inputs. The fair value hierarchy levels are as follows:

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

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

Level 3 Fair values derived when one or more of the significant inputs are unobservable (including assumptions about risk). With little or no observable market, the determination of fair values uses considerable judgment and represents the Company’s best estimate of an amount that could be realized in a market exchange for the asset or liability. Also included are securities that are traded within illiquid markets and/or priced by independent brokers.

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


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of March 31, 2024
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
Asset backed securities ("ABS")	$	3,499	$	—	$	3,483	$	16
Collateralized loan obligations ("CLO")	3,168		—		2,984		184
Commercial mortgage-backed securities ("CMBS")	3,050		—		2,809		241
Corporate	18,657		—		16,734		1,923
Foreign government/government agencies	548		—		548		—
Municipal	5,941		—		5,941		—
Residential mortgage-backed securities ("RMBS")	4,473		—		4,404		69
U.S. Treasuries	1,504		—		1,504		—
Total fixed maturities, AFS	40,840		—		38,407		2,433
FVO securities	292		—		125		167
Equity securities, at fair value [1]	736		344		334		58
Derivative assets
Credit derivatives	29		—		29		—

Foreign exchange derivatives	17		—		17		—
Interest rate derivatives	1		—		1		—

Total derivative assets [2]	47		—		47		—
Short-term investments	2,975		442		2,507		26
Total assets accounted for at fair value on a recurring basis	$	44,890	$	786	$	41,420	$	2,684
Liabilities accounted for at fair value on a recurring basis
Derivative liabilities
Credit derivatives	$	(29)	$	—	$	(29)	$	—

Foreign exchange derivatives	10		—		10		—
Interest rate derivatives	(3)		—		(3)		—

Total derivative liabilities [3]	(22)		—		(22)		—

Total liabilities accounted for at fair value on a recurring basis	$	(22)	$	—	$	(22)	$	—


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of December 31, 2023
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS
ABS	$	3,320	$	—	$	3,320	$	—
CLO	3,090		—		2,977		113
CMBS	3,125		—		2,898		227
Corporate	17,866		—		16,005		1,861
Foreign government/government agencies	562		—		562		—
Municipal	6,039		—		6,039		—
RMBS	4,287		—		4,251		36
U.S. Treasuries	1,529		18		1,511		—
Total fixed maturities, AFS	39,818		18		37,563		2,237
FVO securities	327		—		160		167
Equity securities, at fair value [1]	864		333		473		58
Derivative assets
Credit derivatives	(10)		—		(10)		—

Foreign exchange derivatives	9		—		9		—

Total derivative assets [2]	(1)		—		(1)		—
Short-term investments	3,850		1,400		2,425		25
Total assets accounted for at fair value on a recurring basis	$	44,858	$	1,751	$	40,620	$	2,487
Liabilities accounted for at fair value on a recurring basis
Derivative liabilities
Credit derivatives	$	10	$	—	$	10	$	—

Foreign exchange derivatives	4		—		4		—
Interest rate derivatives	(6)		—		(6)		—
Total derivative liabilities [3]	8		—		8		—

Total liabilities accounted for at fair value on a recurring basis	$	8	$	—	$	8	$	—

*[1]*Level 3 includes investments that have contractual sales restrictions that require consent to sell and are in place for the duration that the securities are held by the Company.

*[2]*Includes derivative instruments in a net positive fair value position after consideration of the accrued interest and impact of collateral posting requirements which may be imposed by agreements and applicable law. See footnote 3 to this table for derivative liabilities.

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

The Company has overseas deposits included in other investments of $75 as of both March 31, 2024 and December 31, 2023, which are measured at fair value using the net asset value as a practical expedient.

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

Valuation Techniques

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

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

Quoted prices, unadjusted, for identical assets or liabilities in active markets, which are classified as Level 1.
Prices from third-party pricing services, which primarily utilize a combination of techniques. These services utilize recently reported trades of identical, similar, or benchmark securities making adjustments for market observable inputs available through the reporting date. If there are no recently reported trades, they may use a discounted cash flow


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Internal matrix pricing is a valuation process internally developed for private placement securities for which the Company is unable to obtain a price from a third-party pricing service. Internal pricing matrices determine credit spreads that, when combined with risk-free rates, are applied to contractual cash flows to develop a price. The Company develops credit spreads using market based data for public securities adjusted for credit spread differentials between public and private securities, which are obtained from a survey of multiple private placement brokers. The market-based reference credit spread considers the issuer’s sector, financial strength, and term to maturity, using an independent public security index, while the credit spread differential considers the non-public nature of the security. Securities priced using internal matrix pricing are classified as Level 2 because the significant inputs are observable or can be corroborated with observable data.
Independent broker quotes, which are typically non-binding, use inputs that can be difficult to corroborate with observable market-based data. Brokers may use present value techniques using assumptions specific to the security types, or they may use recent transactions of similar securities. Due to the lack of transparency in the process that brokers use to develop prices, valuations that are based on independent broker quotes are classified as Level 3.

The fair value of derivative instruments is determined primarily using a discounted cash flow model or option model technique and incorporates counterparty credit risk. In some cases, quoted market prices for exchange-traded and over-the-counter ("OTC") cleared derivatives may be used and in other cases independent broker quotes may be used. The pricing valuation models primarily use inputs that are observable in the market or can be corroborated by observable market data. The valuation of certain derivatives may include significant inputs that are unobservable, such as volatility levels, and reflect the Company’s view of what other market participants would use when pricing such instruments.

Valuation Controls

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

Valuation Inputs

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


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


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


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Significant Unobservable Inputs for Level 3 - Securities
Assets accounted for at fair value on a recurring basis	Fair Value		Predominant Valuation Technique	Significant Unobservable Input	Minimum	Maximum	Weighted Average [1]	Impact of Increase in Input on Fair Value [2]
As of March 31, 2024
CLO [3]	$	124	Discounted cash flows	Spread	259 bps	260 bps	260 bps	Decrease
CMBS [3]	$	239	Discounted cash flows	Spread (encompasses prepayment, default risk and loss severity)	235 bps	1,225 bps	430 bps	Decrease
Corporate [4]	$	1,806	Discounted cash flows	Spread	7 bps	714 bps	304 bps	Decrease
RMBS	$	69	Discounted cash flows	Spread [6]	44 bps	420 bps	158 bps	Decrease
				Constant prepayment rate [6]	—%	17%	4%	Decrease [5]
				Constant default rate [6]	1%	3%	2%	Decrease
				Loss severity [6]	30%	64%	38%	Decrease
Short-term investments [3]	$	16	Discounted cash flows	Spread	887 bps	887 bps	887 bps	Decrease

As of December 31, 2023
CLO [3]	$	98	Discounted cash flows	Spread	268 bps	270 bps	269 bps	Decrease
CMBS [3]	$	226	Discounted cash flows	Spread (encompasses prepayment, default risk and loss severity)	365 bps	1,315 bps	509 bps	Decrease
Corporate [4]	$	1,741	Discounted cash flows	Spread	49 bps	743 bps	323 bps	Decrease
RMBS	$	36	Discounted cash flows	Spread [6]	32 bps	298 bps	161 bps	Decrease
				Constant prepayment rate [6]	1%	5%	4%	Decrease [5]
				Constant default rate [6]	1%	5%	2%	Decrease
				Loss severity [6]	10%	70%	41%	Decrease
Short-term investments [3]	$	15	Discounted cash flows	Spread	579 bps	1,254 bps	1,225 bps	Decrease

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

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

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

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

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

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

As of March 31, 2024 and December 31, 2023, the fair values of the Company's level 3 derivatives were less than $1 for both periods.

The table above excludes certain securities for which fair values are predominately based on independent broker quotes. While the Company does not have access to the significant unobservable inputs that independent brokers may use in their pricing process, the Company believes brokers likely use inputs similar to those used by the Company and third-party pricing services to price similar instruments. As such, in their pricing models, brokers likely use estimated loss severity rates, prepayment rates, constant default rates and credit spreads. Therefore, similar to non-broker priced securities, increases in these inputs would generally cause fair values to decrease. As of March 31, 2024, no significant adjustments were made by the Company to broker prices received.

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

The Company uses derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instrument may not be classified within the same fair value hierarchy level as the associated asset or liability.


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)



Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the Three Months Ended March 31, 2024
				Total realized/unrealized gains (losses)
		Fair value as of January 1, 2024		Included in net income [1]		Included in OCI [2]		Purchases		Settlements		Sales		Transfers into Level 3 [3]		Transfers out of Level 3 [3]		Fair value as of March 31, 2024
Assets
Fixed maturities, AFS
	ABS	$	—	$	—	$	—	$	16	$	—	$	—	$	—	$	—	$	16
	CLO	113		—		—		130		(12)		—		—		(47)		184
	CMBS	227		—		10		—		(2)		—		6		—		241
	Corporate	1,861		—		(15)		106		(27)		(2)		—		—		1,923


	RMBS	36		—		—		38		(5)		—		—		—		69
Total fixed maturities, AFS		2,237		—		(5)		290		(46)		(2)		6		(47)		2,433
FVO securities		167		3		—		—		(3)		—		—		—		167
Equity securities, at fair value		58		—		—		—		—		—		—		—		58
Short-term investments		25		—		—		1		—		—		—		—		26
Total Assets		$	2,487	$	3	$	(5)	$	291	$	(49)	$	(2)	$	6	$	(47)	$	2,684


Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the Three Months Ended March 31, 2023
				Total realized/unrealized gains (losses)
		Fair value as of January 1, 2023		Included in net income [1]		Included in OCI [2]		Purchases		Settlements		Sales		Transfers into Level 3 [3]		Transfers out of Level 3 [3]		Fair value as of March 31, 2023
Assets
Fixed maturities, AFS
	ABS	$	30	$	—	$	—	$	36	$	—	$	—	$	—	$	(30)	$	36
	CLO	115		—		—		40		(4)		—		—		—		151
	CMBS	222		—		(5)		4		—		—		10		—		231
	Corporate	1,589		1		31		66		(51)		(7)		27		(13)		1,643


	RMBS	95		—		—		—		(8)		—		—		(30)		57
Total fixed maturities, AFS		2,051		1		26		146		(63)		(7)		37		(73)		2,118
FVO securities		178		(8)		—		—		2		—		—		—		172
Equity securities, at fair value		61		(1)		—		1		(1)		—		—		—		60
Short-term investments		193		—		—		1		(7)		—		—		—		187
Total Assets		$	2,483	$	(8)	$	26	$	148	$	(69)	$	(7)	$	37	$	(73)	$	2,537

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

*[2]*All amounts are before income taxes.

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


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Changes in Unrealized Gains (Losses) for Financial Instruments Classified as Level 3 Still Held at End of Period
		Three Months Ended March 31,
				2024		2023		2024		2023
			Changes in Unrealized Gain/(Loss) included in Net Income [1] [2]			Changes in Unrealized Gain/(Loss) included in OCI [3]
Assets
Fixed maturities, AFS


	CMBS			$	—	$	—	$	10	$	(5)
	Corporate			—		—		(15)		31



Total fixed maturities, AFS				—		—		(5)		26
FVO securities				3		(8)		—		—






Total Assets				$	3	$	(8)	$	(5)	$	26

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

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

*[3]*Changes in unrealized gains (losses) on fixed maturities, AFS are reported in changes in net unrealized gain (loss) on fixed maturities in the Condensed Consolidated Statements of Comprehensive Income.

Fair Value Option

The Company has elected the fair value option for certain investments in residual interests of securitizations and other securities that contain embedded credit derivatives with underlying credit risk related to residential real estate in order to reflect changes in fair value in earnings. These instruments are included within FVO securities on the Condensed Consolidated Balance Sheets and changes in the fair value of these investments are reported in net realized gains and losses.

As of March 31, 2024 and December 31, 2023, the fair value of assets using the fair value option was $292 and $327, respectively, of which $167 were residual interests of securitizations for both periods.

For the three months ended March 31, 2024 and 2023, realized gains (losses) related to the change in fair value of assets using the fair value option were $4 and $(8), respectively.

Financial Instruments Not Carried at Fair Value


Financial Assets and Liabilities Not Carried at Fair Value
	March 31, 2024					December 31, 2023
	Fair Value Hierarchy Level	Carrying Amount [1]		Fair Value		Fair Value Hierarchy Level	Carrying Amount [1]		Fair Value
Assets
Mortgage loans	Level 3	$	6,197	$	5,618	Level 3	$	6,087	$	5,584
Liabilities
Other policyholder funds and benefits payable	Level 3	$	633	$	633	Level 3	$	638	$	639
Senior notes [2]	Level 2	$	3,864	$	3,491	Level 2	$	3,863	$	3,533
Junior subordinated debentures [2]	Level 2	$	499	$	445	Level 2	$	499	$	429

*[1]*As of March 31, 2024 and December 31, 2023, the carrying amount of mortgage loans is net of ACL of $48 and $51, respectively.

*[2]*Included in long-term debt in the Condensed Consolidated Balance Sheets, except for any current maturities, which are included in short-term debt when applicable.


Table of Contents						Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. INVESTMENTS


Net Realized Gains (Losses)
	Three Months Ended March 31,
(Before tax)		2024		2023
Gross gains on sales of fixed maturities		$	5	$	17
Gross losses on sales of fixed maturities		(11)		(39)
Equity securities [1]
Net realized gains (losses) on sales of equity securities		(12)		50
Change in net unrealized gains (losses) of equity securities		47		(15)
Net realized and unrealized gains (losses) on equity securities		35		35
Net credit losses on fixed maturities, AFS		(1)		(5)
Change in ACL on mortgage loans		3		—

Other, net [2]		(3)		(15)



Net realized gains (losses)		$	28	$	(7)

*[1]*The change in net unrealized gains (losses) on equity securities still held as of the end of the period and included in net realized gains (losses) were $36 and $2 for the three months ended March 31, 2024, and 2023, respectively.

*[2]*For the three months ended March 31, 2024, and 2023 includes gains (losses) from transactional foreign currency revaluation of $2 and $(7), respectively, and gains (losses) on non-qualifying derivatives of $(2), and $5, respectively.

Proceeds from the sales of fixed maturities, AFS totaled $0.4 billion and $1.4 billion for the three months ended March 31, 2024 and 2023, respectively.

Accrued Investment Income on Fixed Maturities, AFS and Mortgage Loans

As of March 31, 2024 and December 31, 2023, the Company reported accrued investment income related to fixed maturities, AFS of $381 and $371, respectively, and accrued investment income related to mortgage loans of $21 and $20, respectively. These amounts are not included in the carrying value of the fixed maturities or mortgage loans. Investment income on fixed maturities and mortgage loans is accrued unless it is past due over 90 days or management deems the interest uncollectible. The Company does not include the current accrued investment income balance when estimating the ACL. The Company has a policy to write-off accrued investment income balances that are more than 90 days past due. Write-offs of accrued investment income are recorded as a credit loss component of net realized gains and losses.

Recognition and Presentation of Intent-to-Sell Impairments and ACL on Fixed Maturities, AFS

The Company will record an "intent-to-sell impairment" as a reduction to the amortized cost of fixed maturities, AFS in an unrealized loss position if the Company intends to sell or it is more likely than not that the Company will be required to sell the fixed maturity before a recovery in value. A corresponding charge is recorded in net realized losses equal to the difference between the fair value on the impairment date and the amortized cost basis of the fixed maturity before recognizing the impairment.

For fixed maturities where a credit loss has been identified and no intent-to-sell impairment has been recorded, the Company will record an ACL for the portion of the unrealized loss related to the credit loss. Any remaining unrealized loss on a fixed maturity after recording an ACL is the non-credit amount and is recorded in OCI. The ACL is the excess of the amortized cost over the greater of the Company's best estimate of the present value of expected future cash flows or the security's fair value. Cash flows are discounted at the effective yield that is used to record interest income. The ACL cannot exceed the unrealized loss and, therefore, it may fluctuate with changes in the fair value of the fixed maturity if the fair value is greater than the Company's best estimate of the present value of expected future cash flows. The initial ACL and any subsequent changes are recorded in net realized gains and losses. The ACL is written off against the amortized cost in the period in which all or a portion of the related fixed maturity is determined to be uncollectible.

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

For non-structured securities, assumptions include, but are not limited to, economic and industry-specific trends and fundamentals, instrument-specific developments including changes in credit ratings, industry earnings multiples and the issuer’s ability to restructure, access capital markets, and execute asset sales.


Table of Contents						Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

For structured securities, assumptions include, but are not limited to, various performance indicators such as historical and projected default and recovery rates, credit ratings, current and projected delinquency rates, loan-to-value ("LTV") ratios, average cumulative collateral loss rates that vary by vintage year, prepayment speeds, and property value declines. These

assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries which may include estimating the underlying collateral value.


ACL on Fixed Maturities, AFS by Type
	Three Months Ended March 31,
		2024			2023
(Before tax)			Corporate			CMBS		Total		Corporate		CMBS		Total
Balance as of beginning of period			$	9		$	12	$	21	$	2	$	10	$	12
Credit losses on fixed maturities where an allowance was not previously recorded			—			—		—		4		—		4


Net increases (decreases) on fixed maturities where an allowance was previously recorded			1			—		1		—		1		1
Write-offs charged against the allowance			(4)			—		(4)		—		—		—
Balance as of end of period			$	6		$	12	$	18	$	6	$	11	$	17

Fixed Maturities, AFS


Fixed Maturities, AFS, by Type
	March 31, 2024										December 31, 2023
	Amortized Cost		ACL		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value			Amortized Cost		ACL		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
ABS	$	3,527	$	—	$	15	$	(43)	$	3,499		$	3,347	$	—	$	18	$	(45)	$	3,320
CLO	3,168		—		5		(5)		3,168			3,104		—		3		(17)		3,090
CMBS	3,345		(12)		20		(303)		3,050			3,466		(12)		19		(348)		3,125
Corporate	19,598		(6)		144		(1,079)		18,657			18,691		(9)		197		(1,013)		17,866
Foreign govt./govt. agencies	574		—		4		(30)		548			583		—		6		(27)		562
Municipal	6,175		—		101		(335)		5,941			6,207		—		131		(299)		6,039
RMBS	4,889		—		10		(426)		4,473			4,675		—		18		(406)		4,287
U.S. Treasuries	1,670		—		12		(178)		1,504			1,653		—		26		(150)		1,529
Total fixed maturities, AFS	$	42,946	$	(18)	$	311	$	(2,399)	$	40,840		$	41,726	$	(21)	$	418	$	(2,305)	$	39,818


Fixed Maturities, AFS, by Contractual Maturity Year
	March 31, 2024				December 31, 2023
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	$	1,541	$	1,517	$	1,526	$	1,501
Over one year through five years	10,212		9,900		9,670		9,433
Over five years through ten years	6,440		6,074		6,568		6,211
Over ten years	9,824		9,159		9,370		8,851
Subtotal	28,017		26,650		27,134		25,996
Mortgage-backed and asset-backed securities	14,929		14,190		14,592		13,822
Total fixed maturities, AFS	$	42,946	$	40,840	$	41,726	$	39,818


Table of Contents						Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Concentration of Credit Risk

The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification, where

applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk. The Company had no investment exposure to any credit concentration risk of a single issuer greater than 10% of the Company's stockholders' equity as of March 31, 2024 or December 31, 2023 other than U.S. government securities and certain U.S. government agencies.

Unrealized Losses on Fixed Maturities, AFS


Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of March 31, 2024
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
ABS	$	982	$	(7)	$	942	$	(36)	$	1,924	$	(43)
CLO	1,107		(4)		295		(1)		1,402		(5)
CMBS	59		(1)		2,794		(302)		2,853		(303)
Corporate	1,733		(25)		11,000		(1,054)		12,733		(1,079)
Foreign govt./govt. agencies	96		(1)		344		(29)		440		(30)
Municipal	664		(6)		3,212		(329)		3,876		(335)
RMBS	685		(8)		3,061		(418)		3,746		(426)
U.S. Treasuries	287		(14)		999		(164)		1,286		(178)
Total fixed maturities, AFS in an unrealized loss position	$	5,613	$	(66)	$	22,647	$	(2,333)	$	28,260	$	(2,399)


Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of December 31, 2023
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
ABS	$	604	$	(6)	$	1,043	$	(39)	$	1,647	$	(45)
CLO	209		(1)		2,249		(16)		2,458		(17)
CMBS	117		(7)		2,837		(341)		2,954		(348)
Corporate	810		(10)		11,149		(1,003)		11,959		(1,013)
Foreign govt./govt. agencies	27		—		368		(27)		395		(27)
Municipal	329		(3)		3,196		(296)		3,525		(299)
RMBS	181		(3)		3,207		(403)		3,388		(406)
U.S. Treasuries	120		(11)		1,121		(139)		1,241		(150)
Total fixed maturities, AFS in an unrealized loss position	$	2,397	$	(41)	$	25,170	$	(2,264)	$	27,567	$	(2,305)

As of March 31, 2024, fixed maturities, AFS in an unrealized loss position consisted of 4,002 instruments and were primarily depressed due to higher interest rates and/or wider credit spreads since the purchase date. As of March 31, 2024, 95% of these fixed maturities were depressed less than 20% of cost or amortized cost. The increase in unrealized losses during the three months ended March 31, 2024, was primarily attributable to higher interest rates, partially offset by tighter credit spreads.

Most of the fixed maturities depressed for twelve months or more relate to the corporate sector, RMBS, municipal bonds, and CMBS which were primarily depressed because current rates are higher and/or market spreads are wider than at the

respective purchase dates. The Company neither has an intention to sell nor does it expect to be required to sell the fixed maturities outlined in the preceding discussion. The decision to record credit losses on fixed maturities, AFS in the form of an ACL requires us to make qualitative and quantitative estimates of expected future cash flows.

Mortgage Loans

ACL on Mortgage Loans

The Company reviews mortgage loans on a quarterly basis to estimate the ACL with changes in the ACL recorded in net


Table of Contents						Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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. The Company utilizes a third-party forecasting model to estimate lifetime expected credit losses at a loan level under multiple economic scenarios. The scenarios use macroeconomic data provided by an internationally recognized economics firm that generates forecasts of varying economic factors such as GDP growth, unemployment and interest rates. The economic scenarios are projected over 10 years. The first two to four years of the 10-year period assume a specific modeled economic scenario (including moderate upside, moderate recession and severe recession scenarios) and then revert to historical long-term assumptions over the remaining period. Using these economic scenarios, the forecasting model projects property-specific operating income and capitalization rates used to estimate the value of a future operating income stream. The operating income and the property valuations derived from capitalization rates are compared to loan payment and principal amounts to create debt service coverage ratios ("DSCRs") and LTVs over the forecast period. The Company's process also considers qualitative factors. The model overlays historical data about mortgage loan performance based on DSCRs and LTVs and projects the probability of default, amount of loss given a default and resulting expected loss through maturity for each loan under each economic scenario. Economic scenarios are probability-weighted based on a statistical analysis of the forecasted economic factors and qualitative analysis. The Company records the change in the ACL on mortgage loans based on the weighted-average expected credit losses across the selected economic scenarios.

When a borrower is experiencing financial difficulty, including when foreclosure is probable, the Company measures an ACL on individual mortgage loans. The ACL is established for any shortfall between the amortized cost of the loan and the fair value of the collateral less costs to sell. Estimates of collectibility from an individual borrower require the use of significant management judgment and include the probability and timing of borrower default and loss severity estimates. In addition, cash

flow projections may change based upon new information about the borrower's ability to pay and/or the value of underlying collateral such as changes in projected property value estimates. As of March 31, 2024, the Company did not have any mortgage loans for which an ACL was established on an individual basis.

There were no mortgage loans held-for-sale as of March 31, 2024 or December 31, 2023. In addition, as of March 31, 2024 and 2023, the Company had no mortgage loans that have had extensions or restructurings other than what is allowable under the original terms of the contract or with borrowers experiencing financial difficulties.


ACL on Mortgage Loans
	Three Months Ended March 31,
		2024		2023
ACL as of beginning of period		$	51	$	36
Current period provision (release)		(3)		—



ACL as of December 31,		$	48	$	36

The release in the allowance for the three months ended March 31, 2024 is primarily attributable to improved economic scenario forecasts and property specific reductions, partially offset by net additions of new loans.

The weighted-average LTV ratio of the Company’s mortgage loan portfolio was 55% as of March 31, 2024, while the weighted-average LTV ratio at origination of these loans was 59%. LTV ratios compare the loan amount to the value of the underlying property collateralizing the loan with property values based on appraisals updated no less than annually. Factors considered in estimating property values include, among other things, actual and expected property cash flows, geographic market data and the ratio of the property's net operating income to its value. DSCR compares a property’s net operating income to the borrower’s principal and interest payments and are updated no less than annually through reviews of underlying properties.


Mortgage Loans LTV & DSCR by Origination Year as of March 31, 2024
	2024			2023			2022			2021			2020			2019 & Prior			Total
Loan-to-value	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost [1]		Avg. DSCR
Greater than 80%	$	—	—x	$	—	—x	$	16	1.14x	$	38	1.05x	$	—	—x	$	104	0.89x	$	158	0.95x
65% - 80%	—		—x	—		—x	189		2.20x	489		2.35x	94		3.48x	349		1.77x	1,121		2.24x
Less than 65%	98		1.62x	434		1.45x	735		2.77x	1,062		3.13x	527		2.91x	2,110		2.78x	4,966		2.73x
Total mortgage loans	$	98	1.62x	$	434	1.45x	$	940	2.63x	$	1,589	2.84x	$	621	2.99x	$	2,563	2.57x	$	6,245	2.60x

*[1]*Amortized cost of mortgage loans excludes ACL of $48.


Table of Contents						Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Mortgage Loans LTV & DSCR by Origination Year as of December 31, 2023
	2023			2022			2021			2020			2019			2018 & Prior			Total
Loan-to-value	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost [1]		Avg. DSCR
Greater than 80%	$	—	—x	$	16	1.09x	$	38	1.05x	$	—	—x	$	—	—x	$	105	1.41x	$	159	1.29x
65% - 80%	—		—x	189		2.13x	457		2.42x	95		3.47x	98		1.77x	252		1.77x	1,091		2.25x
Less than 65%	400		1.47x	724		2.75x	1,105		2.99x	527		2.92x	679		2.90x	1,453		2.67x	4,888		2.72x
Total mortgage loans	$	400	1.47x	$	929	2.60x	$	1,600	2.78x	$	622	3.00x	$	777	2.76x	$	1,810	2.47x	$	6,138	2.60x

*[1]*Amortized cost of mortgage loans excludes ACL of $51.


Mortgage Loans by Region
	March 31, 2024				December 31, 2023
	Amortized Cost		Percent of Total		Amortized Cost		Percent of Total
East North Central	$	371	5.9	%	$	368	6.0	%

Middle Atlantic	246		3.9	%	238		3.9	%
Mountain	728		11.7	%	699		11.4	%
New England	350		5.6	%	351		5.7	%
Pacific	1,330		21.3	%	1,326		21.6	%
South Atlantic	1,780		28.5	%	1,776		28.9	%
West North Central	104		1.7	%	103		1.7	%
West South Central	498		8.0	%	445		7.2	%
Other [1]	838		13.4	%	832		13.6	%
Total mortgage loans	6,245		100.0	%	6,138		100.0	%
ACL	(48)				(51)
Total mortgage loans, net of ACL	$	6,197			$	6,087

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


Mortgage Loans by Property Type
	March 31, 2024				December 31, 2023
	Amortized Cost		Percent of Total		Amortized Cost		Percent of Total
Commercial

Industrial	$	2,478	39.7	%	$	2,363	38.5	%

Multifamily	2,192		35.1	%	2,200		35.9	%
Office	568		9.1	%	578		9.4	%
Retail [1]	927		14.8	%	917		14.9	%
Single Family	80		1.3	%	80		1.3	%

Total mortgage loans	6,245		100.0	%	6,138		100.0	%
ACL	(48)				(51)
Total mortgage loans, net of ACL	$	6,197			$	6,087

*[1]*Primarily comprised of grocery-anchored retail centers, with no exposure to regional shopping malls.

Past-Due Mortgage Loans

Mortgage loans are considered past due if a payment of principal or interest is not received according to the contractual terms of the loan agreement, which typically includes a grace period. As of March 31, 2024 and December 31, 2023, the Company held no mortgage loans considered past due.


Table of Contents						Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Mortgage Servicing

The Company originates, sells and services commercial mortgage loans on behalf of third parties and recognizes servicing fee income over the period that services are performed. As of March 31, 2024, under this program, the Company serviced mortgage loans with a total outstanding principal of $9.6 billion, of which $4.5 billion was serviced on behalf of third parties and $5.1 billion was retained and reported in total investments on the Company's Condensed Consolidated Balance Sheets. As of December 31, 2023, the Company serviced mortgage loans with a total outstanding principal balance of $9.4 billion, of which $4.4 billion was serviced on behalf of third parties and $5.0 billion was retained and reported in total investments on the Company's Condensed Consolidated Balance Sheets. Servicing rights are carried at the lower of cost or fair value and were $0 as of March 31, 2024 and December 31, 2023, because servicing fees were market-level fees at origination and remain adequate to compensate the Company for servicing the loans.

Variable Interest Entities

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

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

Consolidated VIEs

As of March 31, 2024 and December 31, 2023, the Company did not hold any securities for which it is the primary beneficiary.

Non-Consolidated VIEs

The Company, through normal investment activities, makes passive investments in limited partnerships and other alternative investments. For these non-consolidated VIEs, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments. The Company’s maximum exposure to loss as of March 31, 2024 and December 31, 2023 was limited to the total carrying value of $3.0 billion for both periods, which are a portion of the investments in limited partnerships and other alternative investments in the Company's Condensed Consolidated Balance Sheets that are primarily recorded using the equity method of accounting. As of March 31, 2024 and December 31,

2023, the Company has outstanding commitments totaling $1.7 billion for both periods, whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses. These investments are generally of a passive nature in that the Company does not take an active role in management. For further discussion of these investments, see Equity Method Investments within Note 5 - Investments of Notes to Consolidated Financial Statements included in the Company’s 2023 Form 10-K Annual Report.

Furthermore, the Company makes investments in entities that sponsor affordable housing projects. Similarly, for these non-consolidated VIEs, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments. The Company applies the proportional amortization method to subsequently measure its investments in such qualified affordable housing projects, where costs are amortized over the period in which the investor expects to receive tax credits and the resulting amortization is recognized as a component of income tax expense on the Company's Condensed Consolidated Statements of Operations. For the three months ended March 31, 2024, and 2023, the Company recognized amortization of $1 and less than $1, respectively, and related tax benefits of $2 and less than $1, respectively. The income tax credits and other income tax benefits are recognized in operating activities in the Condensed Consolidated Statement of Cash Flows. The carrying value of these investments, which are reported in other assets on the Company’s Condensed Consolidated Balance Sheets was $22 and $20 as of March 31, 2024, and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, the Company has outstanding commitments related to affordable housing projects of $177 and $180, respectively, that are contingent on various conditions precedent to funding.

In addition, the Company makes passive investments in structured securities issued by VIEs for which the Company is not the manager. These investments are included in ABS, CLO, CMBS, and RMBS and are reported in fixed maturities, AFS, and FVO securities on the Company's Condensed Consolidated Balance Sheets. The Company has not provided financial or other support with respect to these investments other than its original investment. For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs, and, where applicable, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits. The Company’s maximum exposure to loss on these investments is limited to the amount of the Company’s investment.


Table of Contents						Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Reverse Repurchase Agreements, Other Collateral Transactions and Restricted Investments

Reverse Repurchase Agreements

From time to time, the Company enters into reverse repurchase agreements where the Company purchases securities and simultaneously agrees to resell the same or substantially the same securities. The maturity of these transactions is generally within one year. The agreements require additional collateral to be transferred to the Company under specified conditions and the Company has the right to sell or re-pledge the securities received. The Company accounts for reverse repurchase agreements as collateralized financing. As of both March 31, 2024 and December 31, 2023, the Company reported $10 within short-term investments on the Condensed Consolidated Balance Sheets representing a receivable for the amount of cash transferred to purchase the securities.

Other Collateral Transactions

As of March 31, 2024 and December 31, 2023, the Company pledged collateral of $6 and $7, respectively, of U.S. government securities or cash primarily related to certain bank loan participations committed through a limited partnership agreement.

For disclosure of collateral in support of derivative transactions, refer to the Derivative Collateral Arrangements section in Note 6 - Derivatives of Notes to Condensed Consolidated Financial Statements.

Other Restricted Investments

The Company is required by law to deposit securities with government agencies in certain states in which it conducts business. In addition, the Company is required to hold fixed maturities and short-term investments in trust for the benefit of syndicate policyholders, hold fixed maturities in a Lloyd's of London ("Lloyd's") trust account to provide a portion of the required capital, and maintain other investments primarily consisting of overseas deposits in various countries with Lloyd's to support underwriting activities in those countries. Lloyd's is an insurance market-place operating worldwide. Lloyd's does not underwrite risks. The Company accepts risks as the sole member of Lloyd's Syndicate 1221 ("Lloyd's Syndicate").

The following table presents the components of the Company’s exposure to other restricted investments.



	March 31, 2024		December 31, 2023
	Fair Value		Fair Value
Securities on deposit with government agencies	$	2,370	$	2,339
Fixed maturities in trust for benefit of Lloyd's Syndicate policyholders	917		890
Short-term investments in trust for benefit of Lloyd's Syndicate policyholders	19		30
Fixed maturities in Lloyd's trust account	160		154
Other investments	75		75
Total Other Restricted Investments	$	3,541	$	3,488

6. DERIVATIVES

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

Strategies that Qualify for Hedge Accounting

Some of the Company's derivatives satisfy hedge accounting requirements as outlined in Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements, included in The Hartford’s 2023 Form 10-K Annual Report. Typically, these hedging instruments include interest rate swaps and, to a lesser extent, foreign currency swaps where the terms or expected cash flows of the hedged item closely match the terms of the swap.

Cash Flow Hedges

Interest rate swaps are predominantly used to manage portfolio duration and better match cash receipts from assets with cash disbursements required to fund liabilities. These derivatives primarily convert interest receipts on variable-rate fixed maturity securities to fixed rates. The Company has also entered into interest rate swaps to convert the variable interest payments on the $500 junior subordinated debentures due 2067 to fixed interest payments. For further information, see the Junior Subordinated Debentures section within Note 14 - Debt of Notes to Consolidated Financial Statements, included in The Hartford's 2023 Form 10-K Annual Report.

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

Non-qualifying Strategies

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


Table of Contents						Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Credit Contracts

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

Interest Rate Swaps and Futures

The Company uses interest rate swaps and futures to manage interest rate duration between assets and liabilities. In addition, the Company enters into interest rate swaps to terminate existing swaps, thereby offsetting the changes in value of the original swap going forward. As of March 31, 2024 and December 31, 2023, the notional amount of interest rate swaps in offsetting relationships was $1.3 billion and $6.6 billion, respectively.

Foreign Currency Swaps and Forwards

The Company enters into foreign currency swaps to convert the foreign currency exposures of certain foreign currency-denominated fixed maturity investments to U.S. dollars.

Equity Index Options

The Company may enter into equity index options to hedge the impact of a decline in the equity markets on the investment portfolio.

Derivative Balance Sheet Classification

For reporting purposes, the Company has elected to offset within assets or liabilities based upon the net of the fair value amounts, income accruals and related cash collateral receivables and payables of OTC derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset. The following fair value amounts do not include income accruals or related cash collateral receivables and payables, which are netted with derivative fair value amounts to determine balance sheet presentation. The Company’s derivative instruments are held for risk management purposes, unless otherwise noted in the following table. The notional amount of derivative contracts represents the basis upon which payments or receipts are calculated and is presented in the table to quantify the volume of the Company’s derivative activity. Notional amounts are not necessarily reflective of credit risk.


Derivative Balance Sheet Presentation
	Net Derivatives								Asset Derivatives				Liability Derivatives
	Notional Amount				Fair Value				Fair Value				Fair Value
Hedge Designation/ Derivative Type	Mar 31, 2024		Dec. 31, 2023		Mar 31, 2024		Dec. 31, 2023		Mar 31, 2024		Dec. 31, 2023		Mar 31, 2024		Dec. 31, 2023
Cash flow hedges
Interest rate swaps	$	3,450	$	3,450	$	(1)	$	(1)	$	1	$	1	$	(2)	$	(2)
Foreign currency swaps	657		644		27		13		39		29		(12)		(16)
Total cash flow hedges	4,107		4,094		26		12		40		30		(14)		(18)
Non-qualifying strategies
Interest rate contracts
Interest rate swaps and futures	1,929		6,626		(1)		(5)		—		—		(1)		(5)
Foreign exchange contracts
Foreign currency swaps and forwards	657		645		—		—		—		—		—		—
Credit contracts


Credit derivatives in offsetting positions	996		998		—		—		31		27		(31)		(27)




Total non-qualifying strategies	3,582		8,269		(1)		(5)		31		27		(32)		(32)
Total cash flow hedges and non-qualifying strategies	$	7,689	$	12,363	$	25	$	7	$	71	$	57	$	(46)	$	(50)
Balance Sheet Location
Fixed maturities, available-for-sale	$	657	$	645	$	—	$	—	$	—	$	—	$	—	$	—
Other investments	1,286		1,662		47		(1)		56		18		(9)		(19)
Other liabilities	5,746		10,056		(22)		8		15		39		(37)		(31)
Total derivatives	$	7,689	$	12,363	$	25	$	7	$	71	$	57	$	(46)	$	(50)


Table of Contents						Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Offsetting of Derivative Assets/Liabilities

The following tables present the gross fair value amounts, the offsetting amounts, and net position of derivative instruments eligible for offset in the Company's Condensed Consolidated Balance Sheets. Offsetting amounts include fair value amounts, income accruals and related cash collateral receivables and payables associated with derivative instruments that are traded under a common master netting agreement, as described in the preceding discussion. Also included in the tables are financial collateral receivables and payables, which are contractually permitted to be offset upon an event of default, although are disallowed for offsetting under U.S. GAAP.


Offsetting Derivative Assets and Liabilities
	(i)		(ii)		(iii) = (i) - (ii)				(iv)		(v) = (iii) - (iv)
					Net Amounts Presented in the Statement of Financial Position				Collateral Disallowed for Offset in the Statement of Financial Position
	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in the Statement of Financial Position		Derivative Assets [1] (Liabilities) [2]		Accrued Interest and Cash Collateral (Received) [3] Pledged [2]		Financial Collateral (Received) Pledged [4]		Net Amount
As of March 31, 2024
Other investments	$	71	$	67	$	47	$	(43)	$	—	$	4
Other liabilities	$	(46)	$	(39)	$	(22)	$	15	$	(6)	$	(1)

As of December 31, 2023
Other investments	$	57	$	55	$	(1)	$	3	$	—	$	2
Other liabilities	$	(50)	$	(36)	$	8	$	(22)	$	(13)	$	(1)

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

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

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

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

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of OCI and reclassified into earnings in the

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


Gains (Losses) Recognized in OCI
	Three Months Ended March 31,
		2024		2023
Interest rate swaps		$	(17)	$	11
Foreign currency swaps		17		(4)
Total		$	—	$	7


Table of Contents						Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Gains (Losses) Reclassified from AOCI into Income

	Three Months Ended March 31,
	2024	2023
		Net Investment Income		Interest Expense		Net Investment Income		Interest Expense
Interest rate swaps		$	(7)	$	4	$	(8)	$	3
Foreign currency swaps		3		—		2		—
Total		$	(4)	$	4	$	(6)	$	3

Total amounts presented on the Condensed Consolidated Statement of Operations		$	593	$	50	$	515	$	50

As of March 31, 2024, the before tax deferred net losses on derivative instruments recorded in AOCI that are expected to be reclassified to earnings during the next twelve months are $13. This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities and long-term debt that will occur over the next twelve months. At that time, the Company will recognize the deferred net gains (losses) as an adjustment to net investment income or interest expense, as applicable, over the term of the hedged instrument cash flows.

During the three months ended March 31, 2024 and 2023, the Company had no net reclassifications from AOCI to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring.

Non-qualifying Strategies

For non-qualifying strategies, including embedded derivatives that are required to be bifurcated from their host contracts and accounted for as derivatives, the gain or loss on the derivative is recognized currently in earnings within net realized gains (losses).


Non-Qualifying Strategies Recognized within Net Realized Gains (Losses)
	Three Months Ended March 31,
		2024		2023





Interest rate contracts
Interest rate swaps and futures		$	3	$	21
Credit contracts
Credit derivatives that purchase credit protection		—		(16)

Equity contracts
Equity index options		(5)		—


Total [1]		$	(2)	$	5

[1]Excludes investments that contain an embedded credit derivative for which the Company has elected the fair value option. For further discussion, see the Fair Value Option section in Note 4 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.

Credit Risk Assumed through Credit Derivatives

The Company enters into credit default swaps that assume credit risk of a single entity or referenced index in order to synthetically replicate investment transactions that are permissible under the Company's investment policies. The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event. A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security issuer’s debt obligation after the occurrence of the credit event. A credit event is generally defined as a default on contractually obligated interest or principal payments or bankruptcy of the referenced entity. The credit default swaps in which the Company assumes credit risk may reference investment grade single corporate issuers and

baskets, which include standard diversified portfolios of corporate and CMBS issuers.


Table of Contents						Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Credit Risk Assumed Derivatives by Type
						Underlying Referenced Credit Obligation(s) [1]
	Notional Amount [2]		Fair Value		Weighted Average Years to Maturity	Type	Average Credit Rating	Offsetting Notional Amount [3]		Offsetting Fair Value [3]
As of March 31, 2024


Basket credit default swaps [4]

Investment grade risk exposure	$	101	$	(1)	4 years	CMBS Credit	AAA	$	101	$	1
Below investment grade risk exposure	396		30		4 years	Corporate Credit	B+	$	396	$	(30)
Below investment grade risk exposure	1		(1)		Less than 1 year	CMBS Credit	CCC-	1		1
Total [5]	$	498	$	28				$	498	$	(28)

As of December 31, 2023


Basket credit default swaps [4]

Investment grade risk exposure	$	101	$	(1)	5 years	CMBS Credit	AAA	$	101	$	1
Below investment grade risk exposure	396		24		4 years	Corporate Credit	B+	396		(24)
Below investment grade risk exposure	2		(1)		Less than 1 year	CMBS Credit	CCC-	2		1
Total [5]	$	499	$	22				$	499	$	(22)

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

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

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

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

*[5]*Excludes investments that contain an embedded credit derivative for which the Company has elected the fair value option. For further discussion, see the Fair Value Option section in Note 4 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.

Derivative Collateral Arrangements

The Company enters into various collateral arrangements in connection with its derivative instruments, which require both the pledging and accepting of collateral. As of March 31, 2024 and December 31, 2023, the Company has pledged cash collateral associated with derivative instruments of $30 and $25, respectively. In general, collateral receivable is recorded in other assets or other liabilities on the Company's Condensed Consolidated Balance Sheets as determined by the Company's election to offset on the balance sheet. As of March 31, 2024 and December 31, 2023, the Company pledged securities collateral associated with derivative instruments with a fair value of $5 and $14, respectively, which have been included in fixed maturities on the Company's Condensed Consolidated Balance Sheets. The counterparties generally have the right to sell or re-pledge these securities.

In addition, as of March 31, 2024 and December 31, 2023, the Company has pledged initial margin of cash related to OTC-cleared and exchange traded derivatives with a fair value of $11 and $16, respectively, which is recorded in other investments or other assets on the Company's Condensed Consolidated Balance Sheets. As of March 31, 2024 and December 31, 2023, the Company has pledged initial margin of securities related to OTC-cleared and exchange traded derivatives with a fair value of $129 and $112, respectively, which are included within fixed maturities on the Company's Condensed Consolidated Balance Sheets.

As of March 31, 2024 and December 31, 2023, the Company accepted cash collateral associated with derivative instruments of $62 and $49, respectively, which was invested and recorded in the Company's Condensed Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other investments or other liabilities as determined by the Company's election to offset on the balance sheet. The Company also accepted securities collateral as of March 31, 2024 and December 31, 2023, with a fair value of $0 for both periods, which the Company has the right to repledge or sell. As of March 31, 2024 and December 31, 2023, the Company had no repledged securities. In addition, as of March 31, 2024 and December 31, 2023, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Condensed Consolidated Balance Sheets.


Table of Contents						Note 7 - Premiums Receivable and Agents' Balances

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. PREMIUMS RECEIVABLE AND AGENTS' BALANCES


Premiums Receivable and Agents' Balances

	As of March 31, 2024		As of December 31, 2023
Premiums receivable, excluding receivables for losses within a deductible and retrospectively-rated policy premiums ("loss sensitive business")	$	5,676	$	5,303
Receivables for loss sensitive business, by credit quality:

AA	93		94
A	57		54
BBB	140		136
BB	88		84
Below BB	45		45
Total receivables for loss sensitive business	423		413

Total Premiums Receivable and Agents' Balances, Gross	6,099		5,716
ACL	(111)		(109)
Total Premiums Receivable and Agents' Balances, Net of ACL	$	5,988	$	5,607

ACL on Premiums Receivable and Agents' Balances

Balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods. Premiums receivable and agents' balances, excluding receivables for loss sensitive business, are primarily comprised of premiums due from policyholders, which are typically collectible within one year or less. For these balances, the ACL is estimated based on an aging of receivables and recent historical credit loss and collection experience, adjusted for current economic conditions and reasonable and supportable forecasts, when appropriate.

A portion of the Company's Commercial Lines business is written with large deductibles or under retrospectively-rated plans (referred to as "loss sensitive business"). Under some commercial insurance contracts with a large deductible, the Company is obligated to pay the claimant the full amount of the claim and the Company is subsequently reimbursed by the policyholder for the deductible amount. As such, the Company is subject to credit risk until reimbursement is made. Retrospectively-rated policies are utilized primarily for workers' compensation coverage, whereby the ultimate premium is adjusted based on actual losses incurred. Although the premium adjustment feature of a retrospectively-rated policy substantially reduces insurance risk for the Company, it presents credit risk to the Company. The Company’s results of operations could be adversely affected if a significant portion of such policyholders failed to reimburse the Company for the deductible amount or the amount of additional premium owed under retrospectively-rated policies. The Company manages these credit risks through credit analysis, collateral requirements, and oversight.

The ACL for receivables for loss sensitive business is estimated as the amount of the receivable exposed to loss multiplied by estimated factors for probability of default and the amount of loss given a default. The probability of default is assigned based on each policyholder's credit rating, or a rating is estimated if no external rating is available. Credit ratings are reviewed and updated at least annually. The exposure amount is estimated net of collateral and other credit enhancement, considering the nature of the collateral, potential future changes in collateral values, and historical loss information for the type of collateral obtained. The probability of default factors are historical corporate defaults for receivables with similar durations estimated through multiple economic cycles. Credit ratings are forward-looking and consider a variety of economic outcomes. The loss given default factors are based on a study of historical recovery rates for general creditors through multiple economic cycles. The Company's evaluation of the required ACL for receivables for loss sensitive business considers the current economic environment as well as the probability-weighted macroeconomic scenarios similar to the approach used for estimating the ACL for mortgage loans. See Note 5 - Investments


Rollforward of ACL on Premiums Receivable and Agents' Balances for the Three Months Ended
	March 31, 2024						March 31, 2023
	Receivables Excluding Receivables for Loss Sensitive Business		Receivables for Loss Sensitive Business		Total		Receivables Excluding Receivables for Loss Sensitive Business		Receivables for Loss Sensitive Business		Total
Beginning ACL	$	89	$	20	$	109	$	85	$	24	$	109
Current period provision	15		—		15		12		1		13
Current period write-offs	(15)		—		(15)		(14)		—		(14)
Current period recoveries	2		—		2		3		—		3
Ending ACL	$	91	$	20	$	111	$	86	$	25	$	111


Table of Contents						Note 8 - Reinsurance

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. REINSURANCE

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

Reinsurance Recoverables

Reinsurance recoverables include balances due from reinsurance companies and are presented net of an allowance for uncollectible reinsurance. Reinsurance recoverables include an estimate of the amount of gross losses and loss adjustment

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


Reinsurance Recoverables by Credit Quality Indicator
	As of March 31, 2024								As of December 31, 2023
	P&C		Group Benefits		Corporate		Total		P&C		Group Benefits		Corporate		Total
A.M. Best Financial Strength Rating
A++	$	2,394	$	—	$	—	$	2,394	$	2,398	$	—	$	—	$	2,398
A+	2,034		250		243		2,527		2,030		251		241		2,522
A	787		1		—		788		810		1		—		811
A-	647		5		—		652		653		5		—		658
B++	4		—		3		7		2		—		3		5
Below B++	22		—		—		22		22		—		—		22
Total Rated by A.M. Best	5,888		256		246		6,390		5,915		257		244		6,416
Mandatory (Assigned) and Voluntary Risk Pools	203		—		—		203		208		—		—		208
Captives	353		—		—		353		353		—		—		353
Other not rated companies	243		6		—		249		226		4		—		230
Gross Reinsurance Recoverables	6,687		262		246		7,195		6,702		261		244		7,207
Allowance for uncollectible reinsurance	(98)		(1)		(2)		(101)		(100)		(1)		(2)		(103)
Net Reinsurance Recoverables	$	6,589	$	261	$	244	$	7,094	$	6,602	$	260	$	242	$	7,104

Balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods, generally 30, 60 or 90 days. To manage reinsurer credit risk, a reinsurance security review committee evaluates the credit standing, financial performance, management and operational quality of each potential reinsurer. In placing reinsurance, the Company considers the nature of the risk reinsured, including the expected liability payout duration, and establishes limits tiered by reinsurer credit rating.

Where its contracts permit, the Company secures future claim obligations with various forms of collateral or other credit enhancement, including irrevocable letters of credit, secured trusts, funds held accounts and group wide offsets. As part of its reinsurance recoverable review, the Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between cedants and reinsurers and the overall credit quality of the Company’s reinsurers.

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

The allowance for uncollectible reinsurance comprises an ACL and an allowance for disputed balances. The ACL is estimated as the amount of reinsurance recoverables exposed to loss multiplied by estimated factors for the probability of default and the amount of loss given a default. The probability of default is assigned based on each reinsurer's credit rating, or a rating is estimated if no external rating is available. Credit ratings are reviewed on a quarterly basis and any significant changes are reflected in an updated estimate. The probability of default factors are historical insurer and reinsurer defaults for liabilities with similar durations to the reinsured liabilities as estimated


Table of Contents						Note 8 - Reinsurance

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

through multiple economic cycles. Credit ratings are forward-looking and consider a variety of economic outcomes. The loss given default factors are based on a study of historical recovery rates for general creditors of corporations through multiple economic cycles or, in the case of purchased annuities funding structured settlements accounted for as reinsurance, historical recovery rates for annuity contract holders.

As shown in the table above, a portion of the total gross reinsurance recoverable balance relates to the Company’s participation in various mandatory (assigned) and voluntary risk pools. Reinsurance recoverables due from pools are backed by the financial position of all insurance companies participating in the pools and the credit backing the reinsurance recoverable is not limited to the financial strength of each pool. The mandatory pools generally are funded through policy assessments or

surcharges and if any participant in the pool defaults, remaining liabilities are apportioned among the other members.

The Company's evaluation of the required ACL for reinsurance recoverables considers the current economic environment as well as macroeconomic scenarios similar to the approach used to estimate the ACL for mortgage loans. See Note 5 - Investments. Insurance companies, including reinsurers, are regulated and hold risk-based capital ("RBC") to mitigate the risk of loss due to economic factors and other risks. Non-U.S. reinsurers are either subject to a capital regime substantively equivalent to domestic insurers or we hold collateral to support collection of reinsurance recoverables. As a result, there is limited history of losses from insurer defaults.


Allowance for Uncollectible Reinsurance for the Three Months Ended
	Three Months Ended March 31,
		2024		2023
P&C beginning allowance for uncollectible reinsurance		$	100	$	102
Beginning allowance for disputed amounts		57		60
P&C beginning ACL		43		42
Current period provision		1		2

P&C ending ACL		44		44
Ending allowance for disputed amounts		54		58
P&C ending allowance for uncollectible reinsurance		98		102
Group Benefits allowance for uncollectible reinsurance		1		1
Corporate allowance for uncollectible reinsurance		2		2
Total allowance for uncollectible reinsurance		$	101	$	105


Table of Contents						Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

9. RESERVE FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

|PROPERTY & CASUALTY INSURANCE PRODUCT RESERVES, NET OF REINSURANCE

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses


	For the three months ended March 31,
	2024		2023
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	34,044	$	33,083
Reinsurance and other recoverables	6,696		6,465
Beginning liabilities for unpaid losses and loss adjustment expenses, net	27,348		26,618
Provision for unpaid losses and loss adjustment expenses
Current accident year	2,461		2,270
Prior accident year development [1]	(56)		—
Total provision for unpaid losses and loss adjustment expenses	2,405		2,270
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	24		—
Payments
Current accident year	(349)		(321)
Prior accident years	(1,591)		(1,646)
Total payments	(1,940)		(1,967)
Foreign currency adjustment	(5)		8
Ending liabilities for unpaid losses and loss adjustment expenses, net	27,832		26,929
Reinsurance and other recoverables	6,705		6,469
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	34,537	$	33,398

*[1]*Prior accident year development for the three months ended March 31, 2024 includes a $24 benefit for amortization of a deferred gain under retroactive reinsurance accounting related to the Navigators Adverse Development Cover ("ADC") as the Company began collection recoveries of the ceded losses from National Indemnity Company ("NICO"), a subsidiary of Berkshire Hathaway Inc, during the period. For additional information regarding the ADC reinsurance agreement, refer to "Change in Deferred Gain on Retroactive Reinsurance" discussion below.


Table of Contents						Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Unfavorable (Favorable) Prior Accident Year Development


	For the three months ended March 31,
		2024		2023
Workers’ compensation		$	(67)	$	(61)
Workers’ compensation discount accretion		12		11
General liability		17		12
Marine		7		1
Package business		—		(5)
Commercial property		(3)		5
Professional liability		(5)		—
Bond		—		—
Assumed reinsurance		9		2
Automobile liability - Commercial Lines		—		—
Automobile liability - Personal Lines		—		—
Homeowners		—		(1)
Net asbestos and environmental ("A&E") reserves		—		—



Catastrophes		—		—
Uncollectible reinsurance		—		8
Other reserve re-estimates, net		(2)		28
Prior accident year development before change in deferred gain		(32)		—
Change in deferred gain on retroactive reinsurance included in other liabilities [1]		(24)		—
Total prior accident year development		$	(56)	$	—

*[1]*The $24 change in deferred gain on retroactive reinsurance for the three months ended March 31, 2024, is related to amortization of the Navigators ADC deferred gain. For additional information regarding the ADC reinsurance agreement, refer to "Change in Deferred Gain on Retroactive Reinsurance" discussion below.

Re-estimates of prior accident year reserves for the three months ended March 31, 2024

Workers’ compensation reserves were decreased within the 2016 to 2020 accident years primarily in small commercial, driven by lower than previously estimated claim severity. In addition, the 2020 accident year includes a $20 reduction of COVID-19 related reserves driven by favorable claim count emergence.

General liability reserves were increased within the 2016 to 2019 accident years driven by higher frequency of large losses on individual claims of excess and umbrella coverages within middle & large commercial and deterioration in global specialty primary construction business.

Marine reserves increased related to higher frequency of large losses on individual U.S. cargo claims for the 2023 accident year.

Professional liability reserves decreased modestly due to favorable development on directors' and officers' ("D&O") claims driven by the 2020 accident year.

Assumed reinsurance reserves were increased due to higher reserve estimates in the Latin America surety business related to the 2021 to 2023 accident years.

Other reserve re-estimates, net, were decreased due to lower severity than expected on Personal Lines automobile physical damage for accident year 2023, partially offset by unfavorable development from participation in involuntary market pools.

Re-estimates of prior accident year reserves for the three months ended March 31, 2023

Workers’ compensation reserves were decreased within the 2014 to 2019 accident years primarily in small commercial, driven by lower than previously estimated claim severity. In addition, the 2020 accident year reflects a $20 reduction of COVID-19 related reserves.

General liability reserves were increased in middle & large commercial, driven by an increase in the frequency and estimated cost to settle large individual claims for the 2016 to 2021 accident years.

Package business reserves decreased primarily due to lower than previously estimated property severity for accident year 2021. Package liability is flat overall with improvement in accident year 2020 due to favorable claim count emergence offset by reserve increases in accident years 2019 and prior related to higher severity.

Commercial property reserves were increased due to unfavorable development for accident year 2022 in middle & large commercial.

Automobile liability reserves - Personal Lines were flat as decreases due to lower estimated severity, within accident years 2019 to 2021 were offset by increases in accident year 2022 due to higher estimated severity and increasing attorney representation rates.

Uncollectible reinsurance was increased primarily in Commercial Lines related to a captive reinsurer, and to a lesser extent in P&C Other Operations related to one larger reinsurer entering liquidation proceedings.

Other reserve re-estimates, net, were increased primarily due to an increase in accident year 2022 Personal Lines automobile physical damage severity.

Change in Deferred Gain on Retroactive Reinsurance

The Company has in place an ADC reinsurance agreement that covers substantially all reserve development of Navigators Insurance Company and certain of its affiliates for 2018 and prior accident years (the “Navigators ADC”) up to an aggregate limit of $300, for which the Company had previously ceded the available limit. As of December 31, 2023, the Company had paid claims related to the Navigators ADC in excess of the $1.816 billion acquisition date reserves plus the $100 retention. During the three months ended March 31, 2024, the Company began collecting recoveries from NICO and as a result amortized $24 of the deferred gain within benefits, losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations. As of March 31, 2024 and December


Table of Contents						Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

31, 2023, the deferred gain on the Navigators ADC was $185 and $209, respectively, and is included in other liabilities on the Condensed Consolidated Balance Sheets.

Settlement Agreement with Boy Scouts of America

On February 14, 2022, the Company executed a final settlement agreement (the “Settlement”) with the Boy Scouts of America (“BSA”), the Local Councils, and the attorneys representing a majority of the alleged victims, pursuant to which The Hartford agreed to pay $787 for sexual molestation and sexual abuse claims associated with liability policies issued by various

Hartford Writing Companies in the 1970s and early 1980s. In exchange for its payment, the Company receives a complete release of its policies issued to BSA and the Local Councils, as well as an injunction against further abuse claims involving BSA. All conditions precedent to the Settlement have been satisfied, including approval by the bankruptcy court and the district court, and on April 20, 2023, The Hartford paid the Settlement amount of $787. Certain objecting parties have appealed the district court’s ruling and that appeal is pending before the Third Circuit. If the court approvals for the BSA’s plan of reorganization are not affirmed on appeal, it is possible that adverse outcomes, if any, could have a material adverse effect on the Company’s operating results.

|GROUP LIFE, DISABILITY AND ACCIDENT PRODUCTS

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses


	For the three months ended March 31,
	2024		2023
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	8,274	$	8,160
Reinsurance recoverables	254		245
Beginning liabilities for unpaid losses and loss adjustment expenses, net	8,020		7,915

Provision for unpaid losses and loss adjustment expenses
Current incurral year	1,376		1,325
Prior year's discount accretion	53		53
Prior incurral year development [1]	(189)		(133)
Total provision for unpaid losses and loss adjustment expenses [2]	1,240		1,245
Payments
Current incurral year	(357)		(335)
Prior incurral years	(924)		(889)
Total payments	(1,281)		(1,224)
Ending liabilities for unpaid losses and loss adjustment expenses, net	7,979		7,936
Reinsurance recoverables	255		248
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	8,234	$	8,184

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

*[2]*Includes unallocated loss adjustment expenses ("ULAE") of $45 and $45 for the three months ended March 31, 2024 and 2023, respectively, that are recorded in insurance operating costs and other expenses in the Condensed Consolidated Statements of Operations.

Re-estimates of prior incurral years reserves for the three months ended March 31, 2024

Group disability- Prior period reserve estimates decreased by approximately $149 largely driven by group long-term disability claim incidence lower than prior assumptions and strong recoveries on prior incurral year claims.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $37 largely driven by favorable mortality emergence and continued low incidence in group life premium waiver.

Supplemental accident and health- Prior period reserve estimates decreased by approximately $3 driven by lower than previously expected claim incidence.

Re-estimates of prior incurral years reserves for the three months ended March 31, 2023

Group disability- Prior period reserve estimates decreased by approximately $120 largely driven by group long-term disability claim incidence lower than prior assumptions and strong recoveries on prior incurral year claims.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $8 largely driven by continued low incidence in group life premium waiver.

Supplemental Accident & Health- Prior period reserve estimates decreased by approximately $5 driven by lower than previously expected claim incidence.


Table of Contents						Note 10 - Reserve for Future Policy Benefits

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

10. RESERVE FOR FUTURE POLICY BENEFITS


Rollforward of Reserve for Future Policy Benefits
	For the three months ended March 31,
	2024						2023
	Payout Annuities		Life Conversions		Paid-up Life		Payout Annuities		Life Conversions		Paid-up Life
Present Value of Expected Net Premiums
Balance, beginning of the period			$	49					$	47
Balance, ending of the period			$	47					$	46

Present Value of Expected Future Policy Benefits
Beginning balance at single-A rate	$	137	$	113	$	185	$	140	$	112	$	192
Beginning adjustment for changes in single-A rate	7		(11)		(32)		4		(14)		(39)
Beginning balance at original discount rate	130		124		217		136		126		231
Effect of changes in cash flow assumptions	—		—		—		—		—		—
Effect of actual variances from expected experience	1		1		—		—		2		—
Adjusted beginning balance	131		125		217		136		128		231

Interest accrual and other	2		4		2		2		4		2
Benefit Payments	(3)		(8)		(7)		(3)		(7)		(6)
Ending balance at original discount rate	130		121		212		135		125		227
Ending adjustment for changes in single-A rate	5		(12)		(35)		8		(12)		(35)
Ending balance at single-A rate	$	135	$	109	$	177	$	143	$	113	$	192

Net reserve for future policy benefits	$	135	$	62	$	177	$	143	$	67	$	192
Weighted-average duration of the reserve for future policy benefits (years)	9.0		11.9		6.3		9.1		12.3		6.5


Net Reserve for Future Policy Benefits
	As of March 31,
	2024		2023
Payout Annuities	$	135	$	143
Life Conversions	62		67
Paid-up Life	177		192
Deferred Profit Liability	20		19
Other	85		87
Total	$	479	$	508


Table of Contents						Note 10 - Reserve for Future Policy Benefits

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Undiscounted Expected Future Gross Premiums and Benefit Payments
	As of March 31,
	2024		2023
Payout Annuities [1]
Expected future benefit payments	$	255	$	269
Life Conversions
Expected future gross premiums	$	111	$	118
Expected future benefit payments	$	201	$	208
Paid-up Life [1]
Expected future benefit payments	$	274	$	295

[1]Payout Annuities and Paid-up Life have no expected future gross premiums.


Weighted-Average Interest Rates
	As of March 31,
	2024		2023
Payout Annuities
Interest accretion rate	5.6	%	5.6	%
Current discount rate	5.1	%	5.0	%
Life Conversions
Interest accretion rate	4.2	%	4.2	%
Current discount rate	5.3	%	5.1	%
Paid-up Life
Interest accretion rate	2.9	%	2.9	%
Current discount rate	5.2	%	5.0	%

Gross premiums and interest accretion recognized on long-duration insurance policies for the three months ended March 31, 2024 and 2023 were immaterial.

11. OTHER POLICYHOLDER FUNDS AND BENEFITS PAYABLE

Other policyholder funds and benefits payable of $633 and $647 as of March 31, 2024 and 2023 respectively, included universal life long-duration contacts of $218 and $231 as well as policyholder balances related to short-duration contracts of $415

and $416. The universal life long-duration contacts presented in the table below were economically ceded to Prudential as part of the sale of the Company's former individual life business, which closed in 2013.


Universal Life Long Duration Contracts Rollforward
	For the three months ended March 31,
	2024			2023
Balance, beginning of the period	$	223		$	232
Premiums Received	3			3
Policy Charges	(5)			(5)
Surrenders and Withdrawals	(1)			(1)
Benefit Payments	(4)			(1)
Interest Credited	2			3
Balance, end of the period	$	218		$	231
Weighted-average crediting rate	4.2		%	4.2		%
Net Amount at Risk [1]	$	897		$	966
Cash Surrender Value	$	216		$	229

[1]Net amount at risk is defined as the current death benefit in excess of the current account value as of the balance sheet date.

As of March 31, 2024 and 2023, universal life contracts of $217 and $229, respectively, had crediting rates at their guaranteed minimums ranging from 4%-5%.


Table of Contents						Note 12 - Income Taxes

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. INCOME TAXES

Income Tax Expense


Income Tax Rate Reconciliation
	Three Months Ended March 31,
	2024		2023
Tax provision at U.S. federal statutory rate	$	191	$	137
Nontaxable investment income	(11)		(11)


Decrease in deferred tax valuation allowance	(12)		(3)
Stock-based compensation, net	(16)		(9)





Other	6		4
Provision for income taxes	$	158	$	118

Uncertain Tax Positions


Rollforward of Unrecognized Tax Benefits
	Three Months Ended March 31,
	2024		2023
Balance, beginning of period	$	26	$	22


Gross increases - tax positions in current period	1		1

Balance, end of period	$	27	$	23

The entire amount of unrecognized tax benefits, if recognized, would affect the effective tax rate in the period of the release. The Company believes it is reasonably possible approximately

$4 of its currently unrecognized tax benefits associated with R&D credits claimed on the Company's 2020 tax return may be recognized by the end of 2024 as a result of a lapse in the applicable statute of limitations.

Other Tax Matters

Management has assessed the need for a valuation allowance against its deferred tax assets based on tax character and jurisdiction, and as part of this assessment, the Company reduced the valuation allowance related to the deferred tax asset for foreign net operating losses from $12 as of December 31, 2023 to $0 as of March 31, 2024. In making the assessment, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryovers, taxable income in open carry back years and other tax planning strategies which management views as prudent and feasible.

The federal income tax audits for the Company have been completed through 2013. The acquired Navigators Group is currently under IRS audit for the pre-acquisition 2019 tax period. The statute of limitations is closed through the 2019 tax year with the exception of net operating loss carryforwards utilized in open tax years and the Navigators pre-acquisition 2019 tax period. Management believes that adequate provision has been made in the Company's Condensed Consolidated Financial Statements for any potential adjustments that may result from tax examinations and other tax-related matters for all open tax years.

13. COMMITMENTS AND CONTINGENCIES

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

Litigation

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves. Subject to the uncertainties related to sexual molestation and sexual abuse claims, including those discussed in Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of this Form 10-Q and in Note 11 - Reserve for Unpaid Losses and Loss Adjustment Expenses, of the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and in the following discussion under the caption “COVID-19 Pandemic Business Income Insurance Litigation” and under the caption “Run-off Asbestos and Environmental Claims,” management expects that the ultimate liability, if any, with respect to such ordinary-course claims

litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts. In addition to the matter described below, these actions include putative class actions seeking certification of a state or national class. Such putative class actions have alleged, for example, underpayment of claims or improper sales or underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile and property. The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims or other allegedly unfair or improper business practices. Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the consolidated financial condition of The Hartford. Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, the outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.


Table of Contents						Note 13 - Commitments and Contingencies

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

COVID-19 Pandemic Business Income Insurance Litigation

Like many others in the property and casualty insurance industry, beginning in April 2020, various direct and indirect subsidiaries of the Company (collectively the "Hartford Writing Companies”), and in some instances the Company itself, were named as defendants in lawsuits seeking insurance coverage under commercial insurance policies issued by the Hartford Writing Companies for alleged losses resulting from the shutdown or suspension of their businesses due to the spread of COVID-19. More than 300 such lawsuits were filed, including numerous lawsuits purportedly filed on behalf of broad nationwide or statewide classes of policyholders. Although the allegations vary, the plaintiffs generally seek a declaration of insurance coverage, damages for breach of contract in unspecified amounts, interest, and attorneys' fees. Many of the lawsuits also allege that the insurance claims were denied in bad faith or otherwise in violation of state laws and seek extra-contractual or punitive damages. Some of the lawsuits also allege that the Hartford Writing Companies engaged in unfair business practices by collecting or retaining excess premium.

The Company and its subsidiaries deny the allegations and maintain that based on the terms of the applicable insurance policies, they have no coverage obligations with respect to these suits for business income allegedly lost by the plaintiffs due to the COVID-19 pandemic. Specifically, the policies generally require direct physical loss or damage to insured property and/or contain exclusions for any loss caused directly or indirectly by the presence, growth, proliferation, spread or activity of a virus, subject to a narrow set of exceptions not applicable in connection with this pandemic, and which often contain a pollution and contamination exclusion that, among other things, expressly excludes from coverage any loss caused by material that threatens human health or welfare.

The Company has obtained numerous dismissals in its favor and affirmations on appeal and continues to vigorously defend the remaining suits in the trial and appellate courts. Nevertheless, given the inherent difficulty in predicting litigation outcomes, the COVID-19 pandemic business income coverage lawsuits still present uncertainties and contingencies that are not yet fully known, including whether additional claims or lawsuits could be filed, the extent to which any state or nationwide classes will be certified, and the size and scope of any such classes. In addition, business income calculations depend upon a wide range of factors that are particular to the circumstances of each individual policyholder and, here, almost none of the plaintiffs have submitted proofs of loss or otherwise quantified or factually supported any allegedly covered loss to allow management to reasonably estimate the possible loss or range of loss, if any. Thus, despite the high percentage of favorable outcomes to date in both the trial and appellate courts, given the lack of certainty around the remaining lawsuits, the indeterminate amounts sought, and the inherent unpredictability of litigation, it is possible that adverse outcomes, if any, in the aggregate, could have a material adverse effect on the Company’s consolidated operating results or liquidity.

Run-off Asbestos and Environmental Claims

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

The vast majority of the Company's exposure to A&E relates to accident years prior to 1986 that are reported in Property & Casualty Other Operations ("Run-off A&E"). In addition, since 1986, the Company has written A&E exposures under general liability policies and pollution liability under homeowners policies, which are reported in the Commercial Lines and Personal Lines segments, respectively.

Prior to 1986, the Company wrote several different categories of insurance contracts that may cover A&E claims. First, the Company wrote primary policies providing the first layer of coverage in an insured’s liability program. Second, the Company wrote excess and umbrella policies providing higher layers of coverage for losses that exhaust the limits of underlying coverage. Third, the Company acted as a reinsurer assuming a portion of those risks assumed by other insurers writing primary, excess, umbrella and reinsurance coverages.

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

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

In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liability and damages against insureds, emerging risks such as per-and polyfluoroalkyl substances ("PFAS"), the risks inherent in major litigation, inconsistent and emerging legal doctrines concerning the existence and scope of coverage for


Table of Contents						Note 13 - Commitments and Contingencies

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

environmental claims, and the scope and level of complexity of the remediation required by regulators.

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

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

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

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

For its Run-off A&E claims, as of March 31, 2024, the Company reported $216 of net A&E reserves, including the benefit of losses ceded to an A&E ADC with NICO (collectively the "A&E ADC"). In addition, the Company has recorded a $788 deferred gain within other liabilities for losses economically ceded to NICO but for which the benefit is not recognized in earnings until later periods. While the Company believes that its current Run-off A&E reserves are appropriate, significant uncertainties limit our ability to estimate the ultimate reserves necessary for unpaid losses and related expenses. The ultimate liabilities, thus, could exceed the currently recorded reserves, and any such additional liability, while not reasonably estimable now, could be material to The Hartford's consolidated operating results or liquidity.

The Company’s A&E ADC reinsurance agreement reinsures substantially all A&E reserve development for 2016 and prior

accident years, including Run-off A&E and A&E reserves included in Commercial Lines and Personal Lines. The A&E ADC has a coverage limit of $1.5 billion above the Company’s existing net A&E reserves as of December 31, 2016 of approximately $1.7 billion. As of March 31, 2024, the Company has incurred $1,438 in cumulative adverse development on A&E reserves that have been ceded under the A&E ADC treaty, leaving $62 of coverage available for future adverse net reserve development, if any. Cumulative adverse development of A&E claims for accident years 2016 and prior could ultimately exceed the $1.5 billion treaty limit in which case any adverse development in excess of the treaty limit would be absorbed as a charge to earnings by the Company. In these scenarios, the effect of these charges could be material to the Company’s consolidated operating results or liquidity. For more information on the A&E ADC, refer to Note 11 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements included in the Company's 2023 Form 10-K Annual Report.

Derivative Commitments

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings, as set by nationally recognized statistical agencies, of the individual legal entity that entered into the derivative agreement. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could, in certain instances, terminate the agreements and demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement.

The settlement amount is determined by netting the derivative positions transacted under each agreement. If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of March 31, 2024 was $37 for which the legal entities have posted collateral of $34 in the normal course of business. Based on derivative contractual terms as of March 31, 2024, a downgrade of the current financial strength ratings by either Moody's or S&P would not require additional assets to be posted as collateral. This requirement could change as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated. The nature of the additional collateral that we would post, if required, would be primarily in the form of U.S. Treasury bills, U.S. Treasury notes and government agency securities.

14. EQUITY

Equity Repurchase Program

During the three months ended March 31, 2024 and 2023, the Company repurchased $350 (3.8 million shares) and $350 (4.7 million shares), respectively, of common stock under Board authorized share repurchase programs covering the applicable

periods. As of March 31, 2024, the Company has $1.0 billion remaining for equity repurchases under the current $3.0 billion share repurchase program, which is effective until December 31, 2024. During the period April 1, 2024 through April 24, 2024, the Company repurchased $113 (1.1 million shares) under this repurchase program.


Table of Contents						Note 14 - Equity

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The timing of any repurchases is dependent on 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.

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


Changes in AOCI, Net of Tax for the Three Months Ended March 31, 2024
	Changes in
	Net Unrealized Gain (Loss) on Fixed Maturities, AFS		Unrealized Losses on Fixed Maturities with ACL		Net Gain (Loss) on Cash Flow Hedging Instruments		Foreign Currency Translation Adjustments		Liability for Future Policy Benefits Adjustments		Pension and Other Postretirement Plan Adjustments		AOCI, net of tax
Beginning balance	$	(1,482)	$	(8)	$	21	$	37	$	25	$	(1,442)	$	(2,849)


OCI before reclassifications	(210)		1		—		(1)		6		2		(202)
Amounts reclassified from AOCI	7		—		—		—		—		7		14
OCI, before tax	(203)		1		—		(1)		6		9		(188)
Income tax benefit (expense)	43		—		—		—		(1)		(2)		40
OCI, net of tax	(160)		1		—		(1)		5		7		(148)
Ending balance	$	(1,642)	$	(7)	$	21	$	36	$	30	$	(1,435)	$	(2,997)


Reclassifications from AOCI
	Three Months Ended March 31, 2024		Affected Line Item in the Condensed Consolidated Statement of Operations
Net Unrealized Gain (Loss) on Fixed Maturities, AFS
Available-for-sale fixed maturities	$	(7)	Net realized gains (losses)
	(7)		Total before tax
	(1)		Income tax expense
	$	(6)	Net income






Net Gain (Loss) on Cash Flow Hedging Instruments

Interest rate swaps	$	(7)	Net investment income
Interest rate swaps	4		Interest expense
Foreign currency swaps	3		Net investment income

	—		Total before tax
	—		Income tax expense
	$	—	Net income
Pension and Other Postretirement Plan Adjustments
Amortization of prior service credit	$	2	Insurance operating costs and other expenses
Amortization of actuarial loss	(9)		Insurance operating costs and other expenses
	(7)		Total before tax
	(1)		Income tax expense
	$	(6)	Net income
Total amounts reclassified from AOCI	$	(12)	Net income


Table of Contents						Note 15 - Accumulated Other Comprehensive Income (Loss)

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


Changes in AOCI, Net of Tax for the Three Months Ended March 31, 2023
	Changes in
	Net Unrealized Gain (Loss) on Fixed Maturities, AFS		Unrealized Losses on Fixed Maturities with ACL		Net Gain (Loss) on Cash Flow Hedging Instruments		Foreign Currency Translation Adjustments		Liability for Future Policy Benefits Adjustments		Pension and Other Postretirement Plan Adjustments		AOCI, net of tax
Beginning balance	$	(2,594)	$	(7)	$	40	$	31	$	35	$	(1,346)	$	(3,841)
OCI before reclassifications	715		(8)		7		3		(10)		—		707
Amounts reclassified from AOCI	27		—		3		—		—		6		36
OCI, before tax	742		(8)		10		3		(10)		6		743
Income tax benefit (expense)	(156)		2		(2)		(1)		2		(1)		(156)
OCI, net of tax	586		(6)		8		2		(8)		5		587
Ending balance	$	(2,008)	$	(13)	$	48	$	33	$	27	$	(1,341)	$	(3,254)


Reclassifications from AOCI
	Three Months Ended March 31, 2023		Affected Line Item in the Condensed Consolidated Statement of Operations
Net Unrealized Gain (Loss) on Fixed Maturities, AFS
Available-for-sale fixed maturities	$	(27)	Net realized gains (losses)
	(27)		Total before tax
	(6)		Income tax expense

	$	(21)	Net income
Net Gain (Loss) on Cash Flow Hedging Instruments
Interest rate swaps	$	(8)	Net investment income
Interest rate swaps	3		Interest expense
Foreign currency swaps	2		Net investment income



	(3)		Total before tax
	(1)		Income tax expense

	$	(2)	Net income
Pension and Other Postretirement Plan Adjustments
Amortization of prior service credit	$	2	Insurance operating costs and other expenses
Amortization of actuarial loss	(8)		Insurance operating costs and other expenses
	(6)		Total before tax
	(1)		Income tax expense
	$	(5)	Net income
Total amounts reclassified from AOCI	$	(28)	Net income


Table of Contents						Note 16 - Employee Benefit Plans

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

16. EMPLOYEE BENEFIT PLANS

The Company’s employee benefit plans are described in Note 19 - Employee Benefit Plans of Notes to Consolidated Financial Statements included in The Hartford’s 2023 Form 10-K Annual Report. Net periodic cost (benefit) is recognized in insurance operating costs and other expenses in the Condensed Consolidated Statement of Operations.

Based on the funded status of the U.S. qualified defined benefit pension plan, the Company does not anticipate contributing to the plan in 2024.


Net Periodic Cost (Benefit)
		Pension Benefits					Other Postretirement Benefits
	Three Months Ended March 31,					Three Months Ended March 31,
		2024		2023			2024		2023
Service cost		$	—	$	1		$	—	$	—
Interest cost		44		45			2		2
Expected return on plan assets		(57)		(59)			—		—
Amortization of prior service credit		—		—			(2)		(2)
Amortization of actuarial loss		8		7			1		1
Net periodic cost (benefit)		$	(5)	$	(6)		$	1	$	1

17. RESTRUCTURING AND OTHER COSTS

In recognition of the need to become more cost efficient and competitive along with enhancing the experience we provide to agents and customers, on July 30, 2020 the Company announced an operational transformation and cost reduction plan it refers to as Hartford Next. Hartford Next reduced annual insurance operating costs and other expenses through reduction of the Company's headcount, investment in information technology ("IT") to further enhance our capabilities, and other activities. The activities were substantially completed as of December 31, 2023.

Termination benefits related to workforce reductions and professional fees are included within restructuring and other costs in the Condensed Consolidated Statement of Operations.

Subsequent to March 31, 2024, the Company expects to incur additional costs including amortization of right of use assets and other lease exit costs, other IT costs to retire applications and other expenses. Total restructuring and other costs are expected to be approximately $126, before tax, and will be recognized in Corporate for segment reporting.


Restructuring and Other Costs, Before Tax
	Incurred in the Three Months Ended March 31,					Cumulative Incurred Through March 31, 2024			Total Amount Expected to be Incurred
		2024		2023
Severance benefits		$	—	$	(3)		$	35		$	35
IT costs		—		1			25			25
Professional fees and other expenses		1		2			65			66
Total restructuring and other costs, before tax		$	1	$	—		$	125		$	126


Table of Contents						Index to MD&A

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


Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

The Hartford provides projections and other forward-looking information in the following discussions, which contain many forward-looking statements, particularly relating to the Company’s future financial performance. These forward-looking statements are estimates based on information currently available to the Company, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to the cautionary statements set forth on pages 4 and 5 of this Form 10-Q. Actual results are likely to differ, and in the past have differed, materially from those forecast by the Company, depending on the outcome of various factors, including, but not limited to, those set forth in the following discussion; Part I, Item 1A, Risk Factors in The Hartford’s 2023 Form 10-K Annual Report; and our other filings with the Securities and Exchange Commission ("SEC"). The Hartford undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

Certain reclassifications have been made to historical financial information presented in Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") to conform to the current period presentation.

The Hartford defines increases or decreases greater than or equal to 200%, or changes from a net gain to a net loss position, or vice versa, as “NM” or not meaningful.

INDEX


Description			Page
Key Performance Measures and Ratios			48
The Hartford's Operations			54
Financial Highlights			55
Consolidated Results of Operations			56
Investment Results			59
Critical Accounting Estimates			61
Commercial Lines			65
Personal Lines			70
Property & Casualty Other Operations			74
Group Benefits			75
Hartford Funds			77
Corporate			79
Enterprise Risk Management			79
Capital Resources and Liquidity			91
Impact of New Accounting Standards			96

Throughout the MD&A, we use certain terms and abbreviations, the more commonly used are summarized in the Acronyms section.

KEY PERFORMANCE MEASURES AND RATIOS

The Company considers the measures and ratios in the following discussion to be key performance indicators for its businesses. Management believes that these ratios and measures are useful in understanding the underlying trends in The Hartford’s businesses. However, these key performance indicators should only be used in conjunction with, and not in lieu of, the results presented in the segment discussions that follow in this MD&A. These ratios and measures may not be comparable to other performance measures used by the Company’s competitors.

Definitions of Non-GAAP and Other Measures and Ratios

Assets Under Management ("AUM")- Include mutual fund and exchange-traded fund ("ETF") assets. AUM is a measure used by the Company's Hartford Funds segment because a significant portion of the segment’s revenues and expenses are based upon asset values. 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.


Table of Contents						Index to MD&A

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

Book Value per Diluted Share excluding accumulated other comprehensive income ("AOCI")- This is a non-GAAP per share measure that is calculated by dividing (a) common stockholders' equity, excluding AOCI, after tax, by (b) common shares outstanding and dilutive potential common shares. The Company provides this measure to enable investors to analyze the amount of the Company's net worth that is primarily attributable to the Company's business operations. The Company believes that excluding AOCI from the numerator is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates. Book value per diluted share is the most directly comparable U.S. GAAP measure.

Combined Ratio- The sum of the loss and loss adjustment expense ("LAE") ratio, the expense ratio and the policyholder dividend ratio. This ratio is a relative measurement that describes the related cost of losses and expenses for every $100 of earned premiums. A combined ratio below 100 demonstrates underwriting profit; a combined ratio above 100 demonstrates underwriting losses.

Core Earnings- The Hartford uses the non-GAAP measure core earnings as an important measure of the Company’s operating performance. The Hartford believes that core earnings provides investors with a valuable measure of the performance of the Company’s ongoing businesses because it reveals trends in our insurance and financial services businesses that may be obscured by including the net effect of certain items. Therefore, the following items are excluded from core earnings:

Certain realized gains and losses - Generally realized gains and losses are primarily driven by investment decisions and external economic developments, the nature and timing of which are unrelated to the insurance and underwriting aspects of our business. Accordingly, core earnings excludes the effect of all realized gains and losses that tend to be highly variable from period to period based on capital market conditions. The Hartford believes, however, that some realized gains and losses are integrally related to our insurance operations, so core earnings includes net realized gains and losses such as net periodic settlements on credit derivatives. These net realized gains and losses are directly related to an offsetting item included in the income statement such as net investment income.
Restructuring and other costs - Costs incurred as part of a restructuring plan are not a recurring operating expense of the business.
Loss on extinguishment of debt - Largely consisting of make-whole payments or tender premiums upon paying debt off before maturity, these losses are not a recurring operating expense of the business.
Gains and losses on reinsurance transactions - Gains or losses on reinsurance, such as those entered into upon sale of a business or to reinsure loss reserves, are not a recurring operating expense of the business.
Integration and other non-recurring M&A costs - These costs, including transaction costs incurred in connection with an acquired business, are incurred over a short period of time and do not represent an ongoing operating expense of the business.
Change in loss reserves upon acquisition of a business - These changes in loss reserves are excluded from core earnings because such changes could obscure the ability to compare results in periods after the acquisition to results of periods prior to the acquisition.
Deferred gain resulting from retroactive reinsurance and subsequent changes in the deferred gain - Retroactive reinsurance agreements economically transfer risk to the reinsurers and excluding the deferred gain on retroactive reinsurance and related amortization of the deferred gain from core earnings provides greater insight into the economics of the business.
Change in valuation allowance on deferred taxes related to non-core components of before tax income - These changes in valuation allowances are excluded from core earnings because they relate to non-core components of before tax income, such as tax attributes like capital loss carryforwards.
Results of discontinued operations - These results are excluded from core earnings for businesses sold or held for sale because such results could obscure the ability to compare period over period results for our ongoing businesses.

In addition to the above components of net income available to common stockholders that are excluded from core earnings, preferred stock dividends declared, which are excluded from net income, are included in the determination of core earnings. Preferred stock dividends are a cost of financing more akin to interest expense on debt and are expected to be a recurring expense as long as the preferred stock is outstanding.

Net income (loss) and net income (loss) available to common stockholders are the most directly comparable U.S. GAAP measures to core earnings. Core earnings should not be considered as a substitute for net income (loss) or net income (loss) available to common stockholders and does not reflect the overall profitability of the Company’s business. Therefore, The Hartford believes that it is useful for investors to evaluate net income (loss), net income (loss) available to common stockholders, and core earnings when reviewing the Company’s performance.


Table of Contents						Index to MD&A

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


Reconciliation of Net Income to Core Earnings
	Three Months Ended March 31,
		2024		2023
Net income		$	753	$	535
Preferred stock dividends		5		5
Net income available to common stockholders		748		530
Adjustments to reconcile net income available to common stockholders to core earnings:
Net realized losses (gains) excluded from core earnings, before tax		(30)		7
Restructuring and other costs, before tax		1		—


Integration and other non-recurring M&A costs, before tax		2		2

Change in deferred gain on retroactive reinsurance, before tax [1]		(24)		—
Income tax expense (benefit) [2]		12		(3)
Core earnings		$	709	$	536

[1]During the three months ended March 31, 2024, the Company began collecting recoveries from National Indemnity Company ("NICO”), a subsidiary of Berkshire Hathaway Inc. related to the Navigators adverse development cover ("Navigators ADC") and as a result amortized $24 of the deferred gain within benefits, losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations. For additional information regarding the ADC reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

[2]Primarily represents the federal income tax benefit related to before tax items not included in core earnings.

Core Earnings Margin- The Hartford uses the non-GAAP measure core earnings margin to evaluate, and believes it is an important measure of, the Group Benefits segment's operating performance. Core earnings margin is calculated by dividing core earnings by revenues, excluding buyouts and realized gains (losses). Net income margin, calculated by dividing net income by revenues, is the most directly comparable U.S. GAAP measure. The Company believes that core earnings margin provides investors with a valuable measure of the performance of Group Benefits because it reveals trends in the business that may be obscured by the effect of buyouts and realized gains (losses) as well as other items excluded in the calculation of core earnings. Core earnings margin should not be considered as a substitute for net income margin and does not reflect the overall profitability of Group Benefits. Therefore, the Company believes it is important for investors to evaluate both core earnings margin and net income margin when reviewing performance. A reconciliation of net income margin to core earnings margin is set forth in the Results of Operations section within MD&A - Group Benefits.

Current Accident Year Catastrophe Ratio- A component of the loss and loss adjustment expense ratio, represents the ratio of catastrophe losses incurred in the current accident year ("CAY") (net of reinsurance) to earned premiums. For U.S. events, a catastrophe is an event that causes $25 or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers, as defined by the Property Claim Services office of Verisk. For international events, the Company's approach is similar, informed, in part, by how Lloyd's of London defines major losses. Lloyd's of London is an insurance market-place operating worldwide ("Lloyd's"). Lloyd's does not underwrite risks. The Company accepts risks as the sole member of Lloyd's Syndicate 1221 ("Lloyd's Syndicate"). The current accident year catastrophe ratio includes the effect of catastrophe losses, but does not include the effect of reinstatement premiums.

Expense Ratio- For Commercial Lines and Personal Lines is the ratio of underwriting expenses less fee income, to earned premiums. Underwriting expenses include the amortization of deferred policy acquisition costs ("DAC") and insurance

operating costs and other expenses, including certain centralized services costs and bad debt expense. DAC includes commissions, taxes, licenses and fees and other incremental direct underwriting expenses and are amortized over the policy term.

The expense ratio for Group Benefits is expressed as the ratio of insurance operating costs and other expenses including amortization of intangibles and amortization of DAC, to premiums and other considerations, excluding buyout premiums.

The expense ratio for Commercial Lines, Personal Lines and Group Benefits does not include integration and other transaction costs associated with an acquired business.

Fee Income- Is largely driven from amounts earned as a result of contractually defined percentages of AUM in our Hartford Funds business. These fees are generally earned on a daily basis. Therefore, this fee income increases or decreases with the rise or fall in AUM whether caused by changes in the market or through net flows.

Gross New Business Premium- Represents the amount of premiums charged, before ceded reinsurance, for policies issued to customers who were not insured with the Company in the previous policy term. Gross new business premium plus gross renewal written premium less ceded reinsurance equals total written premium.

Loss and Loss Adjustment Expense Ratio- A measure of the cost of claims incurred in the calendar year divided by earned premium and includes losses and loss adjustment expenses incurred for both the current and prior accident years. Among other factors, the loss and loss adjustment expense ratio needed for the Company to achieve its targeted return on equity ("ROE") fluctuates from year to year based on changes in the expected investment yield over the claim settlement period, the timing of expected claim settlements and the targeted returns set by management based on the competitive environment.


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The loss and loss adjustment expense ratio is affected by claim frequency and claim severity, particularly for shorter-tail property lines of business, where the emergence of claim frequency and severity is credible and likely indicative of ultimate losses. Claim frequency represents the percentage change in the average number of reported claims per unit of exposure in the current accident year compared to that of the previous accident year. Claim severity represents the percentage change in the estimated average cost per claim in the current accident year compared to that of the previous accident year. As one of the factors used to determine pricing, the Company’s practice is to first make an overall assumption about claim frequency and severity for a given line of business and then, as part of the rate-making process, adjust the assumption as appropriate for the particular state, product or coverage.

Current Accident Year Loss and Loss Adjustment Expense Ratio Before Catastrophes- A measure of the cost of non-catastrophe loss and loss adjustment expenses incurred in the current accident year divided by earned premiums. Management believes that the current accident year loss and loss adjustment expense ratio before catastrophes is a performance measure that is useful to investors as it removes the impact of volatile and unpredictable catastrophe losses and prior accident year development ("PYD").

Loss Ratio, excluding Buyouts- Utilized for the Group Benefits segment and is expressed as a ratio of benefits, losses and loss adjustment expenses, excluding those related to buyout premiums, to premiums and other considerations, excluding buyout premiums. Since Group Benefits occasionally buys a block of claims for a stated premium amount, the Company excludes this buyout from the loss ratio used for evaluating the profitability of the business as buyouts may distort the loss ratio. Buyout premiums represent takeover of open claim liabilities and other non-recurring premium amounts.

Mutual Fund and Exchange-Traded Fund Assets- Are owned by the shareowners of those products and not by the Company and, therefore, are not reflected in the Company’s Condensed Consolidated Financial Statements, except in instances where the Company seeds new investment products.

Mutual fund and ETF assets are a measure used by the Company primarily because a significant portion of the Company’s Hartford Funds segment revenues and expenses are based upon asset values. 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.

Net New Business Premium- Represents the amount of premiums charged, after ceded reinsurance, for policies issued to customers who were not insured with the Company in the previous policy term. Net new business premium plus renewal written premium equals total written premium.

Policy Count Retention- Represents the number of renewal policies issued during the current year period divided by the new and renewal policies issued in the prior period. Policy count retention is affected by a number of factors, including the percentage of renewal policy quotes accepted and decisions by the Company to non-renew policies because of specific policy underwriting concerns or because of a decision to reduce

premium writings in certain classes of business or states. Policy count retention is also affected by advertising and rate actions taken by us and competitors.

Effective Policy Count Retention- Represents the number of policies expected to renew in the current year period, based on contract effective dates, divided by the new and renewal policies effective in the prior period. Effective policy count retention is affected by a number of factors, including the percentage of renewal policy quotes accepted and decisions by the Company to non-renew policies because of specific policy underwriting concerns or because of a decision to reduce premium writings in certain classes of business or states. Effective policy count retention is also affected by advertising and rate actions taken by us and competitors, as well as the effect of subsequent cancellations and non-renewals by customers. Effective policy count retention statistics are subject to change from period to period based on the effect of differences between actual and expected policy cancellations throughout the policy period.

Policies in Force- Represents the number of policies with coverage in effect as of the end of the period. The number of policies in force is a growth measure used for Personal Lines as well as small commercial within Commercial Lines and is affected by both new business growth and policy count retention.

Policyholder Dividend Ratio- The ratio of policyholder dividends to earned premium.

Premium Retention- For middle & large commercial, represents the ratio of prior period premiums that were successfully renewed divided by premiums associated with policies available for renewal in the current period. Premium retention excludes premium amounts from annual audits, renewal written price increases and changes in exposure, including amount of insurance. Premium retention statistics are subject to change from period to period based on a number of factors, including the effect of subsequent cancellations and non-renewals.

Prior Accident Year Loss and Loss Adjustment Expense Ratio- Represents the increase (decrease) in the estimated cost of settling catastrophe and non-catastrophe claims incurred in prior accident years as recorded in the current calendar year divided by earned premiums.

Reinstatement Premiums- Represents additional ceded premium paid for the reinstatement of the amount of reinsurance coverage that was reduced as a result of the Company ceding losses to reinsurers.

Renewal Earned Price Increase (Decrease)- Written premiums are earned over the policy term, which is six months for certain Personal Lines automobile business and twelve months for substantially all of the remainder of the Company’s Property and Casualty ("P&C") business. Since the Company earns premiums over the six to twelve month term of the policies, renewal earned price increases (decreases) lag renewal written price increases (decreases) by six to twelve months.


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Renewal Written Price Increase (Decrease)- For Commercial Lines, represents the combined effect of rate changes and individual risk pricing decisions per unit of exposure on policies that renewed and includes amount of insurance. For Personal Lines, renewal written price increases represent the total change in premium per policy since the prior year on those policies that renewed and includes the combined effect of rate changes, amount of insurance and other changes in exposure. For Personal Lines, other changes in exposure include, but are not limited to, the effect of changes in number of drivers, vehicles and incidents, as well as changes in customer policy elections, such as deductibles and limits. The rate component represents the change in rate impacting renewal policies as previously filed with and approved by state regulators during the period. Amount of insurance represents the change in the value of the rating base, such as model year/vehicle symbol for automobiles, building replacement costs for property and wage inflation for workers’ compensation. A number of factors affect renewal written price increases (decreases) including expected loss costs as projected by the Company’s pricing actuaries, rate filings approved by state regulators, risk selection decisions made by the Company’s underwriters and marketplace competition. Renewal written price changes reflect the property and casualty insurance market cycle. Prices tend to increase for a particular line of business when insurance carriers have incurred significant losses in that line of business in the recent past or the industry as a whole commits less of its capital to writing exposures in that line of business. Prices tend to decrease when recent loss experience has been favorable or when competition among insurance carriers increases. Renewal written price statistics are subject to change from period to period, based on a number of factors, including changes in actuarial estimates and the effect of subsequent cancellations and non-renewals, and modifications made to better reflect ultimate pricing achieved.

**Return on Assets (“ROA”), Core Earnings-**The Company uses this non-GAAP financial measure to evaluate, and believes is an important measure of, the Hartford Funds segment’s operating performance. ROA, core earnings is calculated by dividing annualized core earnings by a daily average AUM. ROA is the most directly comparable U.S. GAAP measure. The Company believes that ROA, core earnings, provides investors with a valuable measure of the performance of the Hartford Funds segment because it reveals trends in our business that may be obscured by the effect of items excluded in the calculation of core earnings. ROA, core earnings, should

not be considered as a substitute for ROA and does not reflect the overall profitability of our Hartford Funds business. Therefore, the Company believes it is important for investors to evaluate both ROA, and ROA, core earnings when reviewing the Hartford Funds segment performance. A reconciliation of ROA to ROA, core earnings is set forth in the Results of Operations section within MD&A - Hartford Funds.

Underlying Combined Ratio- This non-GAAP financial measure of underwriting results represents the combined ratio before catastrophes, prior accident year development and current accident year change in loss reserves upon acquisition of a business. Combined ratio is the most directly comparable GAAP measure. The Company believes this ratio is an important measure of the trend in profitability since it removes the impact of volatile and unpredictable catastrophe losses and prior accident year loss and loss adjustment expense reserve development. The changes to loss reserves upon acquisition of a business are excluded from underlying combined ratio because such changes could obscure the ability to compare results in periods after the acquisition to results of periods prior to the acquisition as such trends are valuable to our investors' ability to assess the Company's financial performance.

A reconciliation of combined ratio to underlying combined ratio is set forth in the Results of Operations section within MD&A - Commercial Lines and Personal Lines.

Underwriting Gain (Loss)- The Hartford's management evaluates profitability of the Commercial and Personal Lines segments primarily on the basis of underwriting gain or loss. Underwriting gain (loss) is a before tax non-GAAP measure that represents earned premiums less incurred losses, loss adjustment expenses and underwriting expenses. Net income (loss) is the most directly comparable GAAP measure. Underwriting gain (loss) is influenced significantly by earned premium growth and the adequacy of The Hartford's pricing. Underwriting profitability over time is also greatly influenced by The Hartford's underwriting discipline, as management strives to manage exposure to loss through favorable risk selection and diversification, effective management of claims, use of reinsurance and its ability to manage its expenses. The Hartford believes that underwriting gain (loss) provides investors with a valuable measure of profitability, before tax, derived from underwriting activities, which are managed separately from the Company's investing activities.


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


Reconciliation of Net Income to Underwriting Gain (Loss)
	Three Months Ended March 31,
		2024		2023
Commercial Lines
Net income		$	573	$	421
Adjustments to reconcile net income to underwriting gain:

Net investment income		(391)		(338)
Net realized losses (gains)		(12)		19
Other expense		2		—


Income tax expense		129		100
Underwriting gain		$	301	$	202
Personal Lines
Net income (loss)		$	34	$	(1)
Adjustments to reconcile net income (loss) to underwriting loss:

Net investment income		(50)		(38)
Net realized losses (gains)		(1)		1
Net servicing and other income		(4)		(6)

Income tax expense (benefit)		8		(1)
Underwriting loss		$	(13)	$	(45)
P&C Other Operations
Net income		$	8	$	6
Adjustments to reconcile net income (loss) to underwriting loss:
Net investment income		(18)		(16)
Net realized losses		—		3
Income tax expense		1		1
Underwriting loss		$	(9)	$	(6)

Written and Earned Premiums- Written premium represents the amount of premiums charged for policies issued, net of reinsurance, during a fiscal period. Premiums are considered earned and are included in the financial results on a pro rata basis over the policy period. Management believes that written premium is a performance measure that is useful to investors as it reflects current trends in the Company’s sale of property and casualty insurance products. Written and earned premium are recorded net of ceded reinsurance premium.

Traditional life and disability insurance type products, such as those sold by Group Benefits, collect premiums from policyholders in exchange for financial protection for the policyholder from a specified insurable loss, such as death or disability. These premiums together with net investment income earned are used to pay the contractual obligations under these insurance contracts. Two major factors, new sales and persistency, impact premium growth. Sales can increase or decrease in a given year based on a number of factors, including but not limited to, customer demand for the Company’s product offerings, pricing competition, distribution channels and the Company’s reputation and ratings. Persistency refers to the percentage of premium remaining in-force from year-to-year.


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THE HARTFORD’S OPERATIONS

The Hartford conducts business principally in five reporting segments including Commercial Lines, Personal Lines, Property & Casualty Other Operations, Group Benefits and Hartford Funds, as well as a Corporate category. The Company includes in the Corporate category reserves for run-off structured settlement and terminal funding agreement liabilities, restructuring costs, capital raising activities (including equity financing, debt financing and related interest expense), transaction expenses incurred in connection with an acquisition, certain M&A costs, purchase accounting adjustments related to goodwill and other expenses not allocated to the reporting segments. Corporate also includes investment management fees and expenses related to managing third-party assets.

The Company derives its revenues principally from: (a) premiums earned for insurance coverage provided to insureds; (b) management fees on mutual fund and ETF assets; (c) net investment income; (d) fees earned for services provided to third parties; and (e) net realized gains and losses. Premiums charged for insurance coverage are earned principally on a pro rata basis over the terms of the related policies in-force.

The profitability of the Company's property and casualty insurance businesses over time is greatly influenced by the Company’s underwriting discipline, which seeks to manage exposure to loss through favorable risk selection and diversification, its management of claims, its use of reinsurance, the size of its in force block, making reliable estimates of actual mortality and morbidity, and its ability to manage its expense ratio which it accomplishes through economies of scale and its management of acquisition costs and other underwriting expenses. Pricing adequacy depends on a number of factors, including the ability to obtain regulatory approval for rate changes, proper evaluation of underwriting risks, the ability to project future loss cost frequency and severity based on historical loss experience adjusted for known trends, the Company’s response to rate actions taken by competitors, its expense levels and expectations about regulatory and legal developments. The Company seeks to price its insurance policies such that insurance premiums and future net investment income earned on premiums received will cover underwriting expenses and the ultimate cost of paying claims reported on the policies and provide for a profit margin. For many of its insurance products, the Company is required to obtain approval for its premium rates from state insurance departments and the Lloyd's Syndicate's ability to write business is subject to Lloyd's approval for its premium capacity each year. Most of Personal Lines written premium is associated with our exclusive licensing agreement with AARP, which is effective through December 31, 2032. This agreement provides an important competitive advantage given the size of the 50 plus population and the strength of the AARP brand.

Similar to property and casualty, profitability of the group benefits business depends, in large part, on the ability to evaluate and price risks appropriately and make reliable estimates of mortality, morbidity, disability and longevity. To manage the pricing risk, Group Benefits generally offers term insurance policies, allowing for the adjustment of rates or policy

terms in order to minimize the adverse effect of market trends, loss costs, declining interest rates and other factors. However, as policies are typically sold with rate guarantees an average of three years, pricing for the Company’s products could prove to be inadequate if loss and expense trends emerge adversely during the rate guarantee period or if investment returns are lower than expected at the time the products were sold. For some of its products, the Company is required to obtain approval for its premium rates from state insurance departments. New and renewal business for group benefits business, particularly for long-term disability ("LTD"), are priced using an assumption about expected investment yields over time. While the Company employs asset-liability duration matching strategies to mitigate risk and may use interest-rate sensitive derivatives to hedge its 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. In addition to appropriately evaluating and pricing risks, the profitability of the Group Benefits business depends on other factors, including the Company’s response to pricing decisions and other actions taken by competitors, its ability to offer voluntary products and self-service capabilities, the persistency of its sold business and its ability to manage its expenses which it seeks to achieve through economies of scale and operating efficiencies.

The financial results of the Company’s mutual fund and ETF businesses depend largely on the amount of AUM and the level of fees charged based, in part, on asset share class and fund type. Changes in AUM are driven by the two main factors of net flows and the market return of the funds, which are heavily influenced by the return realized in the equity and bond markets. Net flows are comprised of new sales less redemptions by mutual fund and ETF shareowners. Financial results are highly correlated to the growth in AUM since these funds generally earn fee income on a daily basis.

The investment return, or yield, on invested assets is an important element of the Company’s earnings since insurance products are priced with the assumption that premiums received can be invested for a period of time before benefits, losses and loss adjustment expenses are paid. Due to the need to maintain sufficient liquidity to satisfy claim obligations, the majority of the Company’s invested assets have been held in available-for-sale ("AFS") securities, including, among other asset classes, corporate bonds, municipal bonds, government debt, short-term debt, mortgage-backed securities, asset-backed securities ("ABS") and collateralized loan obligations ("CLO"). The Company also invests in commercial mortgage loans as well as limited partnerships and alternative investments, which are private investments that are less liquid, but have the potential to generate higher returns. The primary investment objective for the Company is to maximize economic value, consistent with acceptable risk parameters, including the management of credit risk and interest rate sensitivity of invested assets, while generating sufficient net of tax income to meet policyholder and corporate obligations. Investment strategies are developed based on a variety of factors including business needs, regulatory requirements and tax considerations.


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FIRST QUARTER FINANCIAL HIGHLIGHTS


Net Income Available to Common Stockholders						Net Income Available to Common Stockholders per Diluted Share						Book Value per Diluted Share


Ý	Increased $218 or 41%		Ý	Increased $0.81 or 49%		Ý	Increased $0.80 or 2%
+	Higher net investment income		+	Increase in net income available to common stockholders		+	Net income in excess of common stockholder dividends
+	The effect of higher earned premiums in P&C and Group Benefits
	+	Reduction in outstanding shares due to share repurchases		-	Dilutive effect of share repurchases
+	Favorable prior accident year development in the 2024 period			-	A decrease in AOCI, primarily driven by an increase in net unrealized losses on AFS securities
+	A change to net realized gains from net realized losses
+	Lower catastrophe losses in P&C
+	Improved group life and group disability loss ratios


Investment Yield, After Tax						Property & Casualty Combined Ratio						Group Benefits Net Income Margin


Ý	Increased 30 bps			Þ	Improved 2.9 points		Ý	Increased 0.9 points
+	A higher yield on fixed maturity securities due to reinvesting at higher rates and an increased yield on variable-rate securities			-	Favorable prior accident year development in the 2024 period		+	Lower group life and group disability loss ratios
	-	Lower catastrophe losses			+	The effect of higher fully insured ongoing premiums
-	Lower returns on limited partnerships and other alternative investments			-	A lower expense ratio, primarily driven by higher earned premium
		+	Higher net investment income
					-	A higher expense ratio
					-	Lower net realized gains


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

CONSOLIDATED RESULTS OF OPERATIONS

The Consolidated Results of Operations should be read in conjunction with the Company's Condensed Consolidated Financial Statements and the related Notes as well as with the segment operating results sections of MD&A.

Consolidated Results of Operations


	Three Months Ended March 31,
		2024		2023		Change
Earned premiums		$	5,446	$	5,063	8	%
Fee income		333		319		4	%
Net investment income		593		515		15	%
Net realized gains (losses)		28		(7)		NM
Other revenues		19		20		(5)	%
Total revenues		6,419		5,910		9	%
Benefits, losses and loss adjustment expenses		3,611		3,482		4	%
Amortization of deferred policy acquisition costs		545		491		11	%
Insurance operating costs and other expenses		1,283		1,216		6	%



Interest expense		50		50		—	%
Amortization of other intangible assets		18		18		—	%
Restructuring and other costs		1		—		NM
Total benefits, losses and expenses		5,508		5,257		5	%
Income, before tax		911		653		40	%
Income tax expense		158		118		34	%
Net income		753		535		41	%
Preferred stock dividends		5		5		—	%
Net income available to common stockholders		$	748	$	530	41	%

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income available to common stockholders increased by $218, primarily driven by:

An increase in P&C underwriting gain of $128, before tax, driven by the effect of earned premium growth, including a lower expense ratio, favorable prior accident year reserve development, and lower current accident year catastrophe losses;
Higher net investment income of $78, before tax, primarily driven by a higher yield on fixed maturities and a higher level of invested assets, partially offset by lower income from limited partnerships and other alternative investments;
A $35, before tax, change to net realized gains in the 2024 period from net realized losses in the prior year period; and
In Group Benefits, improved group life and group disability loss ratios and the effect of higher fully insured ongoing premiums, partially offset by a higher expense ratio.

For a discussion of the Company's operating results by segment, see MD&A - Segment Operating Summaries.


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

REVENUE

Earned Premiums

1522

Earned premiums increased $383 primarily due to:

An increase in P&C reflecting a 10% increase in both Commercial Lines and Personal Lines.

–Contributing to the increase in Commercial Lines was the effect of an increase in new business across all lines of business, earned pricing increases, and higher insured exposures, principally in workers’ compensation and property lines.

–For Personal Lines, earned premium was up primarily due to the effect of earned pricing increases, partially offset by non-renewals.

An increase in Group Benefits earned premium of 2%, including an increase in exposure on existing accounts, new business sales, and lower persistency compared to the prior year period.

Fee income increased primarily due to a $9 increase in Hartford Funds driven by higher daily average assets resulting from an increase in equity market levels, partially offset by net outflows over the preceding twelve months.

Net Investment Income

2194

Net investment income increased primarily due to the impact of reinvesting at higher interest rates, a higher level of invested assets, and a higher yield on variable-rate securities, partially offset by a lower level of income on limited partnerships and other alternative investments.

Net realized gains (losses) changed to a gain in the 2024 period from a loss in the 2023 period primarily due to:

Fewer net losses on sales of fixed maturities in the 2024 period; and
Appreciation in value of fixed maturities, at fair value using the fair value option ("FVO securities") in the 2024 period compared to depreciation in the 2023 period due to changes in credit spreads.

For further discussion of investment results, see MD&A - Investment Results, Net Realized Gains and MD&A - Investment Results, Net Investment Income.


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BENEFITS, LOSSES AND EXPENSES

Losses and LAE Incurred for P&C

2970

Benefits, losses and loss adjustment expenses increased due to:

An increase in Property & Casualty of $135 which was attributable to:

–An increase in P&C CAY loss and loss adjustment expenses before catastrophes of $215, before tax, primarily due to the effect of higher earned premiums in all P&C lines of business;

Partially offset by:

–A decrease in current accident year catastrophe losses of $24, before tax. Catastrophe losses in the 2024 period included losses from tornado, wind and hail, mainly in the Midwest, South and mid-Atlantic regions, as well as winter storms, primarily in the Northeast, Pacific and South regions. Catastrophe losses in the 2023 period included losses from winter storms along the East and West Coasts and tornado, wind and hail events across several regions of the United States; and

–Net favorable prior accident year reserve development of $56, before tax, in P&C compared to no net prior accident year reserve development in the 2023 period. Favorable prior year reserve development in the 2024 period was primarily driven by decreases in reserves related to workers' compensation and Personal Lines automobile physical damage, partially offset by increases in reserves for general liability, assumed reinsurance, and marine. The 2024 period also included a benefit of $24 related to amortization of the Navigators ADC deferred gain. For the 2023 period, prior year reserve development primarily included a decrease in reserves related to workers’ compensation and package business, offset by increases in reserves for Personal Lines automobile physical damage,

Losses and LAE Incurred for Group Benefits

4627

general liability, and uncollectible reinsurance. For further discussion, see Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

A decrease in Group Benefits of $6, before tax, primarily driven by the impact of lower mortality levels and favorable long-term disability claim recoveries, partially offset by the effect of an increase in earned premiums and higher incidence on paid family leave and short-term disability products.

Amortization of deferred policy acquisition costs increased from the prior year period driven by Commercial Lines, reflecting an increase in earned premiums across all commercial lines of business.

Insurance operating costs and other expenses increased due to:

Increased expense from higher staffing costs and commissions in Commercial Lines and Group Benefits, partly in response to increased business volume;
Higher direct marketing costs in Personal Lines as marketing resumed at normalized levels; and
Investments in technology to support business growth and innovation initiatives.

Income tax expense increased primarily due to an increase in income before tax. For further discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.


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

INVESTMENT RESULTS


Composition of Invested Assets
	March 31, 2024				December 31, 2023
	Amount		Percent		Amount		Percent
Fixed maturities, AFS, at fair value	$	40,840	72.8	%	$	39,818	71.2	%
FVO securities	292		0.5	%	327		0.6	%
Equity securities, at fair value	736		1.3	%	864		1.5	%
Mortgage loans (net of allowance for credit losses ("ACL") of $48 and $51)	6,197		11.0	%	6,087		10.9	%
Limited partnerships and other alternative investments	4,866		8.7	%	4,785		8.6	%
Other investments [1]	201		0.4	%	191		0.3	%
Short-term investments	2,975		5.3	%	3,850		6.9	%
Total investments	$	56,107	100.0	%	$	55,922	100.0	%

*[1]*Primarily consists of equity fund investments, overseas deposits, consolidated investment funds, and derivative instruments which are carried at fair value.

March 31, 2024 compared to December 31, 2023

Total investments increased slightly primarily due to an increase in fixed maturities, AFS, at fair value, partially offset by a decrease in short-term investments.

Fixed maturities, AFS, at fair value increased primarily due to net additions of corporate bonds, partially offset by a decrease in valuations due to higher interest rates, net of tighter credit spreads.

Short-term investments decreased primarily due to reallocation into fixed maturities, AFS.


Net Investment Income
		Three Months Ended March 31,
	2024	2023
(Before tax)		Amount		Yield [1]		Amount		Yield [1]
Fixed maturities [2]		$	526	4.5	%	$	445	4.0	%
Equity securities		9		4.2	%	13		2.9	%
Mortgage loans		63		4.0	%	57		3.7	%
Limited partnerships and other alternative investments		16		1.3	%	26		2.5	%
Other [3]		6				(2)
Investment expense		(27)				(24)
Total net investment income		$	593	4.1	%	$	515	3.7	%
Total net investment income excluding limited partnerships and other alternative investments		$	577	4.3	%	$	489	3.8	%

*[1]*Yields calculated using annualized net investment income divided by the monthly average invested assets at amortized cost, as applicable, excluding derivatives book value.

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

*[3]*Primarily includes changes in fair value of certain equity fund investments and income from derivatives that qualify for hedge accounting and are used to hedge fixed maturities.

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Total net investment income increased primarily due to the impact of reinvesting at higher rates, a higher level of invested assets, and a higher yield on variable-rate securities, partially offset by lower income from limited partnerships and other alternative investments.

Annualized net investment income yield, excluding limited partnerships and other alternative investments, was up

primarily due to the impact of reinvesting at higher rates and a higher yield on variable-rate securities.

Average reinvestment rate, on fixed maturities and mortgage loans, excluding certain U.S. Treasury securities, for the three months ended March 31, 2024 was 6.1% which was above the average yield of sales and maturities of 5.0% for the same period. Average reinvestment rate, on fixed maturities and mortgage loans, excluding certain U.S. Treasury securities, for the three months ended March 31, 2023 was 5.8% which was above the average yield of sales and maturities of 4.2% for the same period.


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

For the 2024 calendar year, we expect the annualized net investment income yield, excluding limited partnerships and other alternative investments, to be above the portfolio yield earned in 2023 due to the higher rate environment. The

estimated impact on annualized net investment income yield is subject to variability including the impact of evolving market conditions.


Net Realized Gains (Losses)
	Three Months Ended March 31,
(Before tax)		2024		2023
Gross gains on sales of fixed maturities		$	5	$	17
Gross losses on sales of fixed maturities		(11)		(39)
Equity securities [1]		35		35
Net credit losses on fixed maturities, AFS [2]		(1)		(5)
Change in ACL on mortgage loans [3]		3		—

Other, net [4]		(3)		(15)



Net realized gains (losses)		$	28	$	(7)

*[2]*See Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments within the Investment Portfolio Risks and Risk Management section of the MD&A.

*[3]*See ACL on Mortgage Loans within the Investment Portfolio Risks and Risk Management section of the MD&A.

*[4]*For the three months ended March 31, 2024, and 2023 includes gains (losses) from transactional foreign currency revaluation of $2 and $(7), respectively, and gains (losses) on non-qualifying derivatives of $(2) and $5, respectively.

Three months ended March 31, 2024

Gross gains and losses on sales were primarily due to sales of corporate securities and tax-exempt municipals.

Equity securities net gains were primarily driven by an increase in value due to higher equity market levels.

Other, net losses include losses of $5 on equity derivatives due to higher equity market levels and $1 on impairments of limited partnerships and other alternative investments. Also included are gains of $4 on FVO securities due to appreciation in value and $3 on interest rate derivatives driven by changes in interest rates.

Three months ended March 31, 2023

Gross gains and losses on sales were primarily due to sales of corporate securities and tax-exempt municipals, in addition to sales of U.S. treasuries for duration and/or liquidity management.

Equity securities net gains were primarily driven by repositioning and appreciation in value due to higher equity market levels.

Other, net losses were primarily due to $16 on credit derivatives and $8 on FVO securities due to changes in credit spreads, as well as, $7 on transactional foreign currency revaluation. These losses were partially offset by gains of $21 on interest rate derivatives driven by changes in interest rates.


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

CRITICAL ACCOUNTING ESTIMATES

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

The Company has identified the following estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability:

property and casualty insurance product reserves, net of reinsurance;
group benefit LTD reserves, net of reinsurance;
evaluation of goodwill for impairment;
valuation of investments and derivative instruments including evaluation of credit losses on fixed maturities, AFS and ACL on mortgage loans; and
contingencies relating to corporate litigation and regulatory matters.

In developing these estimates, management makes subjective and complex judgments that are inherently uncertain and subject to material change as facts and circumstances develop. Although variability is inherent in these estimates, management believes the amounts provided are appropriate based upon the facts available upon compilation of the financial statements. Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Condensed Consolidated Financial Statements.

The Company’s critical accounting estimates are discussed in Part II, Item 7 MD&A in the Company’s 2023 Form 10-K Annual Report. In addition, - Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in the Company's 2023 Form 10-K Annual Report should be read in conjunction with this section to assist with obtaining an understanding of the underlying accounting policies related to these estimates. The following discussion updates certain of the Company’s critical accounting estimates as of March 31, 2024.

|PROPERTY & CASUALTY INSURANCE PRODUCT RESERVES, NET OF REINSURANCE

P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as of March 31, 2024

159

Based on the results of the quarterly reserve review process, the Company determines the appropriate reserve adjustments, if any, to record. Recorded reserve estimates represent the Company's best estimate of the ultimate settlement amount of unpaid losses and loss adjustment expenses. The Company does not use statistical loss distributions or confidence levels in the process of determining its reserve estimate and, as a result, does not disclose reserve ranges. Assumptions used in arriving at the selected actuarial indications consider a number of factors, including the immaturity of emerged claims in recent accident years, emerging trends in the recent past, and the level of volatility within each line of business. In general, adjustments are made more quickly to more mature accident years and less volatile lines of business. Such adjustments of reserves are referred to as “prior accident year development”. Increases in previous estimates of ultimate loss costs are referred to as either an increase in prior accident year reserves or as unfavorable reserve development. Decreases in previous estimates of ultimate loss costs are referred to as either a decrease in prior accident year reserves or as favorable reserve development. Reserve development can influence the comparability of year over year underwriting results and is set forth in the paragraphs and tables that follow.


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Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Three Months Ended March 31, 2024
	Commercial Lines		Personal Lines		Property & Casualty Other Operations		Total Property & Casualty
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	29,181	$	2,068	$	2,795	$	34,044
Reinsurance and other recoverables	4,599		28		2,069		6,696
Beginning liabilities for unpaid losses and loss adjustment expenses, net	24,582		2,040		726		27,348
Provision for unpaid losses and loss adjustment expenses
Current accident year before catastrophes	1,725		575		—		2,300
Current accident year catastrophes	109		52		—		161
Prior accident year development [1]	(56)		(7)		7		(56)
Total provision for unpaid losses and loss adjustment expenses	1,778		620		7		2,405
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	24		—		—		24
Payments	(1,312)		(584)		(44)		(1,940)

Foreign currency adjustment	(5)		—		—		(5)
Ending liabilities for unpaid losses and loss adjustment expenses, net	25,067		2,076		689		27,832
Reinsurance and other recoverables	4,612		27		2,066		6,705
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	29,679	$	2,103	$	2,755	$	34,537
Earned premiums and fee income	$	3,059	$	821
Loss and loss expense paid ratio [2]	42.9		71.1
Loss and loss expense incurred ratio	58.3		76.3
Prior accident year development (pts) [3]	(1.8)		(0.9)

*[1]*Prior accident year development for the three months ended March 31, 2024 includes a $24 benefit for amortization of a deferred gain under retroactive reinsurance accounting related to the Navigators ADC as the Company began collecting recoveries of the ceded losses from NICO during the period. For additional information regarding the Navigators ADC reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

*[2]*The “loss and loss expense paid ratio” represents the ratio of paid losses and loss adjustment expenses to earned premiums and fee income.

[3]**“Prior accident year development (pts)” represents the ratio of prior accident year development to earned premiums.


Current Accident Year Catastrophe Losses, Net of Reinsurance
	Three Months Ended March 31, 2024
		Commercial Lines		Personal Lines		Total
Wind and hail		$	42	$	38	$	80
Winter storms		52		14		66








Catastrophes before assumed reinsurance		94		52		146
Global assumed reinsurance business [1]		15		—		15
Total catastrophe losses		$	109	$	52	$	161

*[1]*Catastrophe losses incurred on global assumed reinsurance business are not covered under the Company's aggregate property catastrophe treaty. For further information on the treaty, refer to Enterprise Risk Management — Insurance Risk section of this MD&A.


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



Unfavorable (Favorable) Prior Accident Year Development for the Three Months Ended March 31, 2024
	Commercial Lines		Personal Lines		Property & Casualty Other Operations		Total Property & Casualty Insurance
Workers’ compensation	$	(67)	$	—	$	—	$	(67)
Workers’ compensation discount accretion	12		—		—		12
General liability	17		—		—		17
Marine	7		—		—		7
Package business	—		—		—		—
Commercial property	(3)		—		—		(3)
Professional liability	(5)		—		—		(5)
Bond	—		—		—		—
Assumed reinsurance	9		—		—		9
Automobile liability	—		—		—		—
Homeowners	—		—		—		—


Net asbestos and environmental ("A&E") reserves	—		—		—		—
Catastrophes	—		—		—		—
Uncollectible reinsurance	(7)		—		7		—
Other reserve re-estimates, net	5		(7)		—		(2)
Prior accident year development before change in deferred gain	(32)		(7)		7		(32)
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	(24)		—		—		(24)
Total prior accident year development	$	(56)	$	(7)	$	7	$	(56)

*[1]*The $24 change in deferred gain on retroactive reinsurance for the three months ended March 31, 2024, related to amortization of the Navigators ADC deferred gain under retroactive reinsurance accounting. For additional information regarding the Navigators ADC reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.


Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Three Months Ended March 31, 2023
	Commercial Lines		Personal Lines		Property & Casualty Other Operations		Total Property & Casualty Insurance
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	28,453	$	1,857	$	2,773	$	33,083
Reinsurance and other recoverables	4,574		28		1,863		6,465
Beginning liabilities for unpaid losses and loss adjustment expenses, net	23,879		1,829		910		26,618

Provision for unpaid losses and loss adjustment expenses
Current accident year before catastrophes	1,564		521		—		2,085
Current accident year catastrophes	138		47		—		185
Prior accident year development	(23)		20		3		—
Total provision for unpaid losses and loss adjustment expenses	1,679		588		3		2,270

Payments	(1,359)		(567)		(41)		(1,967)

Foreign currency adjustment	8		—		—		8
Ending liabilities for unpaid losses and loss adjustment expenses, net	24,207		1,850		872		26,929
Reinsurance and other recoverables	4,584		29		1,856		6,469
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	28,791	$	1,879	$	2,728	$	33,398
Earned premiums and fee income	$	2,776	$	747
Loss and loss expense paid ratio [1]	49.0		76.0
Loss and loss expense incurred ratio	60.7		79.6
Prior accident year development (pts) [2]	(0.8)		2.7

*[1]*The “loss and loss expense paid ratio” represents the ratio of paid losses and loss adjustment expenses to earned premiums and fee income.

[2]**“Prior accident year development (pts)” represents the ratio of prior accident year development to earned premiums.


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Current Accident Year Catastrophe Losses, Net of Reinsurance
	Three Months Ended March 31, 2023
		Commercial Lines		Personal Lines		Total
Wind and hail		$	43	$	33	$	76
Winter storms		80		14		94






Catastrophes before assumed reinsurance		123		47		170
Global assumed reinsurance business [1]		15		—		15
Total catastrophe losses		$	138	$	47	$	185



Unfavorable (Favorable) Prior Accident Year Development for the Three Months Ended March 31, 2023
	Commercial Lines		Personal Lines		Property & Casualty Other Operations		Total Property & Casualty Insurance
Workers’ compensation	$	(61)	$	—	$	—	$	(61)
Workers’ compensation discount accretion	11		—		—		11
General liability	12		—		—		12
Marine	1		—		—		1
Package business	(5)		—		—		(5)
Commercial property	5		—		—		5
Professional liability	—		—		—		—
Bond	—		—		—		—
Assumed Reinsurance	2		—		—		2
Automobile liability	—		—		—		—
Homeowners	—		(1)		—		(1)


Net A&E reserves	—		—		—		—
Catastrophes	—		—		—		—
Uncollectible reinsurance	5		—		3		8
Other reserve re-estimates, net [1]	7		21		—		28


Total prior accident year development	$	(23)	$	20	$	3	$	—

*[1]*Other reserve re-estimates, net for the three months ended March 31, 2023 includes a $20 increase in personal automobile physical damage reserves.

For discussion of the factors contributing to unfavorable (favorable) prior accident year reserve development for both the 2024 and 2023 periods, please refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.


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SEGMENT OPERATING SUMMARIES


\|COMMERCIAL LINES - RESULTS OF OPERATIONS

Underwriting Summary


	Three Months Ended March 31,
		2024		2023		Change
Written premiums		$	3,362	$	3,109	8	%
Change in unearned premium reserve		314		343		(8)	%
Earned premiums		3,048		2,766		10	%
Fee income		11		10		10	%
Losses and loss adjustment expenses
Current accident year before catastrophes		1,725		1,564		10	%
Current accident year catastrophes [1]		109		138		(21)	%
Prior accident year development [1]		(56)		(23)		(143)	%
Total losses and loss adjustment expenses		1,778		1,679		6	%
Amortization of deferred policy acquisition costs		476		424		12	%
Underwriting expenses		487		456		7	%
Amortization of other intangible assets		7		7		—	%
Dividends to policyholders		10		8		25	%

Underwriting gain		301		202		49	%

Net investment income [2]		391		338		16	%
Net realized gains (losses) [2]		12		(19)		NM

Other income (expense) [3]		(2)		—		NM

Income before income taxes		702		521		35	%
Income tax expense [4]		129		100		29	%
Net income		$	573	$	421	36	%

*[1]*For additional information on current accident year catastrophes and prior accident year development, see MD&A - Critical Accounting Estimates, Property and Casualty Insurance Product Reserves Development, Net of Reinsurance and Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

*[2]*For discussion of consolidated investment results, see MD&A - Investment Results.

*[3]*Includes integration costs in connection with the 2019 acquisition of Navigators Group.

*[4]*For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.


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

Premium Measures


	Three Months Ended March 31,
	2024			2023
Small Commercial:
Net new business premium	$	268		$	242
Policy count retention	85		%	86		%

Renewal written price increases	5.2		%	3.8		%
Renewal earned price increases	4.9		%	4.0		%
Policies in-force as of end of period (in thousands)	1,512			1,439
Middle Market [1]:
Net new business premium	$	174		$	148

Premium retention	83		%	82		%
Renewal written price increases	6.9		%	6.5		%
Renewal earned price increases	7.5		%	6.0		%


Global Specialty:
Global specialty gross new business premium [2]	$	223		$	191
Renewal written price increases [3]	6.1		%	3.7		%

Renewal earned price increases [3]	5.4		%	6.3		%

*[1]*Except for net new business premium, metrics for middle market exclude loss sensitive and programs businesses.

*[2]*Excludes Global Re and is before ceded reinsurance.

*[3]*Excludes Global Re, offshore energy policies, credit and political risk insurance policies, political violence and terrorism ("PV&T") policies, and any business under which the managing agent of our Lloyd's Syndicate delegates underwriting authority to coverholders and other third parties.

Underwriting Ratios


	Three Months Ended March 31,
		2024	2023	Change
Loss and loss adjustment expense ratio
Current accident year before catastrophes		56.6	56.5	0.1
Current accident year catastrophes		3.6	5.0	(1.4)
Prior accident year development		(1.8)	(0.8)	(1.0)
Total loss and loss adjustment expense ratio		58.3	60.7	(2.4)
Expense ratio		31.5	31.7	(0.2)
Policyholder dividend ratio		0.3	0.3	—
Combined ratio		90.1	92.7	(2.6)
Impact of current accident year catastrophes and prior year development		(1.8)	(4.2)	2.4

Underlying combined ratio		88.4	88.5	(0.1)


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

Net Income

1100

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income increased primarily due to a higher underwriting gain, higher net investment income, and a change to net realized gains in the current year period from net realized losses in the prior year period. For further discussion of investment results, see MD&A - Investment Results.

Underwriting Gain

1543

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Underwriting gain increased by the effect of earned premium growth, higher favorable prior accident year development, including $24 of a benefit for amortization of a deferred gain on the Navigators ADC, and lower current accident year catastrophe losses.

Expense ratio decreased driven by the impact of higher earned premium, partially offset by higher underwriting staffing costs and, to a lesser extent, investments in technology.


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

Earned Premiums

2288

[1]Other earned premiums of $13 and $15, for the three months ended March 31, 2023, and 2024, respectively.

Written Premiums

2459

*[1]*Other written premiums of $13 and $14 for the three months ended March 31, 2023, and 2024, respectively.

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Earned premiums increased due to written premium increases over the prior twelve months, including the effect of higher insured exposures.

Written premiums increased driven by growth across small commercial, middle & large commercial and global specialty.

Small commercial written premium increased driven by double-digit new business growth, renewal written price increases and higher insured exposures. Written premium grew in all lines of business, including package business, excess and surplus, automobile and workers' compensation.
Middle & large commercial written premium increased driven by double-digit new business growth, renewal written price increases in all lines and higher insured exposures. Written premium grew in nearly all lines across general industries, industry verticals and large property.
Global specialty written premium increased driven by written price increases across almost all lines as well as an increase in gross new business, primarily in wholesale. Written premiums grew across most U.S. lines, global reinsurance and international lines.

Renewal written price increases were recognized in nearly all lines, with price increases across most lines other than directors and officers ("D&O").

In small commercial, renewal written price increases were higher in 2024, with low-double digit price increases in package business and automobile and mid double-digit increases in excess and surplus lines. Workers' compensation pricing was slightly positive, but moderated from 2023 due to lower net rates and lower wage inflation.
In middle market, the Company recognized high single-digit to low double-digit price increases in most lines other than workers’ compensation, which was positive due to the effect of wage inflation offset by lower net rates.
In global specialty, U.S. price increases were higher than prior year levels and we achieved mid single-digit renewal written price increases overall, with the high-single to low double-digit increases in property, marine and casualty lines. D&O pricing continues to be negative, but to a lesser extent than the prior year.


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Current Accident Year Loss and LAE Ratio before Catastrophes

5004

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Current accident year loss and LAE ratio before catastrophes was substantially consistent with the prior year quarter as earned pricing is generally keeping pace with loss cost trends across most lines of business.

Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

5539

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Current accident year catastrophe losses for the three months ended March 31, 2024 included losses from winter

storms, mainly in the Northeast, Pacific and South regions, as

well as tornado, wind and hail events in the Midwest, South and

mid-Atlantic regions.

Current accident year catastrophe losses for the three months ended March 31, 2023 included losses from winter storms primarily on the East and West Coasts as well as losses from various tornado, wind and hail events in several regions of the United States.

Prior accident year development was net favorable for the three months ended March 31, 2024 and included reserve decreases for workers' compensation and uncollectible reinsurance, partially offset by reserve increases for general liability, assumed reinsurance and marine. Also included is a benefit of $24 related to amortization of the Navigators ADC deferred gain. For additional information regarding the ADC reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

Prior accident year development was net favorable for the three months ended March 31, 2023 and included reserve decreases for workers' compensation and package business, partially offset by reserve increases for general liability, property and uncollectible reinsurance.


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\|PERSONAL LINES - RESULTS OF OPERATIONS

Underwriting Summary


	Three Months Ended March 31,
		2024		2023		Change
Written premiums		$	844	$	747	13	%
Change in unearned premium reserve		31		8		NM
Earned premiums		813		739		10	%
Fee income		8		8		—	%
Losses and loss adjustment expenses
Current accident year before catastrophes		575		521		10	%
Current accident year catastrophes [1]		52		47		11	%
Prior accident year development [1]		(7)		20		NM
Total losses and loss adjustment expenses		620		588		5	%
Amortization of DAC		60		58		3	%
Underwriting expenses		153		145		6	%
Amortization of other intangible assets		1		1		—	%
Underwriting loss		(13)		(45)		71	%

Net investment income [2]		50		38		32	%
Net realized gains (losses) [2]		1		(1)		NM
Net servicing and other income (expense) [3]		4		6		(33)	%

Income (loss) before income taxes		42		(2)		NM
Income tax expense (benefit) [4]		8		(1)		NM
Net income (loss)		$	34	$	(1)	NM

*[1]*For additional information on current accident year catastrophes and prior accident year development, see MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves, Net of Reinsurance and Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

*[2]*For discussion of consolidated investment results, see MD&A - Investment Results.

*[3]*Includes servicing revenues of $19 and $19 for the three months ended March 31, 2024 and 2023, respectively. Includes servicing expenses of $15 and $14 for the three months ended March 31, 2024 and 2023, respectively.

*[4]*For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.

Written and Earned Premiums


	Three Months Ended March 31,
Written Premiums		2024		2023		Change
Product Line
Automobile		$	600	$	529	13	%
Homeowners		244		218		12	%
Total		$	844	$	747	13	%
Earned Premiums
Product Line
Automobile		$	566	$	509	11	%
Homeowners		247		230		7	%
Total		$	813	$	739	10	%


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

Premium Measures


	Three Months Ended March 31,
Premium Measures	2024			2023
Policies in-force end of period (in thousands)
Automobile	1,233			1,305
Homeowners	701			731
Net new business premium
Automobile	$	72		$	46
Homeowners	$	34		$	21
Policy count retention
Automobile	84		%	85		%
Homeowners	84		%	84		%
Effective Policy Count Retention
Automobile	80		%	84		%
Homeowners	83		%	84		%
Renewal written price increase
Automobile	25.7		%	9.9		%
Homeowners	15.2		%	13.9		%
Renewal earned price increase
Automobile	19.1		%	6.0		%
Homeowners	14.4		%	11.3		%

Underwriting Ratios


	Three Months Ended March 31,
Underwriting Ratios		2024	2023	Change
Loss and loss adjustment expense ratio
Current accident year before catastrophes		70.7	70.5	0.2
Current accident year catastrophes		6.4	6.4	—
Prior year development		(0.9)	2.7	(3.6)
Total loss and loss adjustment expense ratio		76.3	79.6	(3.3)
Expense ratio		25.3	26.5	(1.2)
Combined ratio		101.6	106.1	(4.5)
Impact of current accident year catastrophes and prior year development		(5.5)	(9.1)	3.6
Underlying combined ratio		96.1	97.0	(0.9)

Product Combined Ratios


	Three Months Ended March 31,
		2024	2023	Change
Automobile
Combined ratio		103.9	110.2	(6.3)
Underlying combined ratio		104.4	105.1	(0.7)
Homeowners
Combined ratio		96.2	96.8	(0.6)
Underlying combined ratio		77.0	78.9	(1.9)


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

Net Income (Loss)

846

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income changed to a net gain for the three months ended March 31, 2024 compared to a net loss for the prior year period, largely driven by improved underwriting results and an increase in net investment income.

Underwriting Loss

1262

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Underwriting loss decreased driven by the effect of an increase in earned premium due to renewal written price increases and a change from unfavorable to favorable prior accident year development, partially offset by a slight increase in the current accident year loss and LAE ratio before catastrophes, an increase in current accident year catastrophe losses and an increase in direct marketing costs.


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Expense ratio decreased primarily due to the impact of higher earned premium driven by earned pricing increases, partially offset by an increase in direct marketing costs.

Earned Premiums

2292

Written Premiums

2311

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Earned premiums increased due to higher written premium over the prior twelve months in both automobile and homeowners.

Written premiums increased driven by the effect of written pricing increases in both automobile and homeowners.

Renewal written pricing increases were higher for both automobile and homeowners, primarily in response to recent higher loss cost trends as well as higher insured values in homeowners.

Policy count retention slightly decreased in automobile, and was stable for homeowners.

Effective Policy count retention decreased both for automobile and for homeowners in response to renewal written pricing increases.

Policies in-force declined for both automobile and for homeowners, reflecting the level of new business in relation to non-renewed policies.

Current Accident Year Loss and LAE Ratio before Catastrophes

3289

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Current accident year Loss and LAE ratio before catastrophes increased slightly in automobile and was partially offset by a decrease in homeowners. The increase in automobile was primarily due to an increase in automobile liability and physical damage claim severity, as well as a slightly higher level of frequency in the current period, mostly offset by the impact of earned pricing increases. The automobile severity increases, although moderated from prior year, continue to include the inflationary effects on bodily injury claims and automobile parts and repairs, and also include higher attorney representation rates for liability claims. For homeowners, the decrease in the current accident year loss and LAE ratio before catastrophes was due to a decrease in frequency for both weather and non-weather claims, as well as the impact of earned pricing increases, partially offset by an increase in severity for both weather and non-weather claims. Contributing to the increase in homeowners severity was the effect of higher rebuilding costs due to inflation.


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Current Accident Year Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

4435

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Current accident year catastrophe losses increased for the three months ended March 31, 2024, compared to the prior year. Current accident year catastrophe losses for 2024 included from tornado, wind and hail events, mainly in the Midwest and South regions, as well as winter storms in the Pacific and South regions. Current accident year catastrophe losses for the three months ended March 31, 2023 included tornado, wind and hail events in several regions of the United States, as well as losses from winter storms primarily on the East and West coasts.

Prior accident year development was favorable for the three months ended March 31, 2024, primarily driven by improved severity on automobile physical damage. Net unfavorable prior accident year development for the three months ended March 31, 2023 was primarily driven by higher severity on automobile physical damage.


\|PROPERTY & CASUALTY OTHER OPERATIONS - RESULTS OF OPERATIONS

Underwriting Summary


	Three Months Ended March 31,
		2024		2023		Change
Losses and loss adjustment expenses
Prior accident year development [1]		$	7	$	3	133	%
Total losses and loss adjustment expenses		7		3		133	%
Underwriting expenses		2		3		(33)	%
Underwriting loss		(9)		(6)		(50)	%
Net investment income [2]		18		16		13	%
Net realized gains (losses) [2]		—		(3)		100	%
Income before income taxes		9		7		29	%
Income tax expense [3]		1		1		—	%
Net income		$	8	$	6	33	%

*[1]*For additional information on prior accident year development, see Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

*[2]*For discussion of consolidated investment results, see MD&A - Investment Results.

*[3]*For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.


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Net income

359

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income increased primarily due to net realized losses in the 2023 period and higher net investment income, partially offset by a greater underwriting loss.

Underwriting loss increased primarily due to higher unfavorable prior accident year reserve development in the 2024 period related to an increase in reserves for uncollectible reinsurance.

Asbestos and environmental reserve comprehensive annual reviews will occur in the fourth quarter of 2024. For information on A&E reserves, see MD&A - Critical Accounting Estimates, Asbestos and Environmental Reserves included in the Company's 2023 Form 10-K Annual Report.


\|GROUP BENEFITS - RESULTS OF OPERATIONS


Operating Summary
	Three Months Ended March 31,
		2024		2023		Change
Premiums and other considerations		$	1,639	$	1,609	2	%
Net investment income [1]		114		110		4	%
Net realized gains [1]		1		5		(80)	%
Total revenues		1,754		1,724		2	%
Benefits, losses and loss adjustment expenses		1,204		1,210		—	%
Amortization of DAC		9		9		—	%
Insurance operating costs and other expenses		397		380		4	%
Amortization of other intangible assets		10		10		—	%
Total benefits, losses and expenses		1,620		1,609		1	%
Income before income taxes		134		115		17	%
Income tax expense [2]		26		23		13	%
Net income		$	108	$	92	17	%

*[1]*For discussion of consolidated investment results, see MD&A - Investment Results.

*[2]*For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.


Premiums and Other Considerations
	Three Months Ended March 31,
		2024		2023		Change
Fully insured – ongoing premiums		$	1,585	$	1,557	2	%
Buyout premiums		—		1		(100)	%
Fee income		54		51		6	%
Total premiums and other considerations		$	1,639	$	1,609	2	%
Fully insured ongoing sales		$	444	$	474	(6)	%


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Ratios, Excluding Buyouts
	Three Months Ended March 31,
		2024		2023		Change
Group disability loss ratio		70.1	%	70.4	%	(0.3)
Group life loss ratio		82.6	%	86.7	%	(4.1)
Total loss ratio		73.5	%	75.2	%	(1.7)
Expense ratio [1]		25.4	%	24.7	%	0.7

[1]Integration and transaction costs related to the acquisition of Aetna's U.S. group life and disability business are not included in the expense ratio.


Margin
	Three Months Ended March 31,
		2024		2023		Change
Net income margin		6.2	%	5.3	%	0.9
Adjustments to reconcile net income margin to core earnings margin:
Net realized gains, before tax		(0.1	%)	(0.3	%)	0.2
Integration and other non-recurring M&A costs, before tax		—	%	0.1	%	(0.1)
Income tax benefit		—	%	0.1	%	(0.1)

Core earnings margin		6.1	%	5.2	%	0.9

Net Income

362

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income increased primarily due to a lower loss ratio, higher fully insured ongoing premiums, and higher net investment income, partially offset by a higher expense ratio and lower net realized gains.

Insurance operating costs and other expenses were higher primarily due to the effect of higher earned premium, including higher staffing costs and commissions and increased investments in technology.

Fully Insured Ongoing Premiums

1060

[1]Other of $100 and $104 for the three months ended March 31, 2023 and 2024 respectively, which includes other group coverages such as retiree health insurance, critical illness, accident and hospital indemnity coverages.

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Fully insured ongoing premiums increased over prior year and included an increase in exposure on existing accounts, new business sales, and lower persistency compared to the prior year period.

Fully insured ongoing sales decreased compared to prior year driven by lower group life sales, partially offset by an increase in group disability sales.


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Ratios

1714

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Loss ratio improved 1.7 points compared to the prior year period reflecting lower group life and group disability loss ratios. The group life loss ratio decreased 4.1 points driven by a lower level of mortality compared to the prior year period. The group disability loss ratio decreased 0.3 points due to favorable long-term disability claim recoveries, largely offset by higher incidence in paid family leave and short-term disability products.

Expense ratio increased in 2024 driven by higher staffing costs, increased investments in technology, and higher commission expense, partially offset by the effects of higher earned premium.


\|HARTFORD FUNDS - RESULTS OF OPERATIONS

Operating Summary


	Three Months Ended March 31,
		2024		2023		Change
Fee income and other revenue		$	250	$	241	4	%
Net investment income		4		3		33	%
Net realized gains		5		5		—	%
Total revenues		259		249		4	%

Operating costs and other expenses		203		198		3	%

Income before income taxes		56		51		10	%
Income tax expense [1]		11		10		10	%
Net income		$	45	$	41	10	%
Daily average Hartford Funds AUM		$	131,648	$	127,084	4	%
ROA [2]		13.7		12.9		6	%
Adjustment to reconcile ROA to ROA, core earnings:
Effect of net realized gains excluded from core earnings, before tax		(1.5)		(1.6)		6	%
Effect of income tax expense		0.3		0.3		—	%
ROA, core earnings [2]		12.5		11.6		8	%

[1]For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.

[2]Represents annualized earnings divided by a daily average of assets under management, as measured in basis points.


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Hartford Funds Segment AUM


	Three Months Ended March 31,
		2024		2023		Change
Mutual Fund and ETF AUM - beginning of period		$	119,316	$	112,472	6	%
Sales - Mutual Fund		5,637		6,239		(10)	%
Redemptions - Mutual Fund		(7,939)		(7,485)		(6)	%
Net flows - ETF		(209)		67		NM
Net flows - Mutual Fund and ETF		(2,511)		(1,179)		(113)	%
Change in market value and other		6,754		4,215		60	%
Mutual Fund and ETF AUM - end of period		123,559		115,508		7	%
Third-party life and annuity separate account AUM		12,083		11,672		4	%
Hartford Funds AUM - end of period		$	135,642	$	127,180	7	%

Mutual Fund and ETF AUM by Asset Class


	As of March 31,
	2024		2023		Change
Equity - Mutual Funds	$	83,337	$	76,132	9	%
Fixed Income - Mutual Funds	17,201		16,399		5	%
Multi-Strategy Investments - Mutual Funds [1]	19,268		19,941		(3)	%
Equity - ETF	1,851		1,878		(1)	%
Fixed Income - ETF	1,902		1,158		64	%
Mutual Fund and ETF AUM	$	123,559	$	115,508	7	%

[1]Includes balanced, allocation and alternative investment products.

Net Income

396

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income increased for the three months ended March 31, 2024 primarily due to an increase in fee income net of variable expenses driven by an increase in daily average AUM, and higher net investment income.

Hartford Funds AUM

915

March 31, 2024 compared to March 31, 2023

Hartford Funds AUM increased primarily due to an increase in market values, partly offset by net outflows over the previous twelve months. Net outflows were $2.5 billion for the three months ended March 31, 2024 compared to net outflows of $1.2 billion for the three months ended March 31, 2023.


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\|CORPORATE - RESULTS OF OPERATIONS

Operating Summary


	Three Months Ended March 31,
		2024		2023		Change
Fee income [1]		$	10	$	9	11	%


Other revenue		—		1		(100)	%
Net investment income [2]		16		10		60	%
Net realized gains [2]		9		6		50	%
Total revenues (losses)		35		26		35	%
Benefits, losses and loss adjustment expenses [3]		2		2		—	%

Insurance operating costs and other expenses [1]		14		13		8	%



Interest expense [4]		50		50		—	%
Restructuring and other costs		1		—		NM
Total benefits, losses and expenses		67		65		3	%
Loss before income taxes		(32)		(39)		18	%
Income tax benefit [5]		(17)		(15)		(13)	%
Net loss		(15)		(24)		38	%
Preferred stock dividends		5		5		—	%
Net loss available to common stockholders		$	(20)	$	(29)	31	%

[1]Includes investment management fees and expenses related to managing third-party business.

*[2]*For discussion of consolidated investment results, see MD&A - Investment Results.

[3]Includes benefits expense on life and annuity business previously underwritten by the Company.

[4]For discussion of debt, see Note 14 - Debt of Notes to Consolidated Financial Statements in The Hartford's 2023 Form 10-K Annual Report.

[5]For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.

Net loss available to common stockholders

542

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net loss available to common stockholders for the three months ended March 31, 2024 decreased primarily due to higher net investment income, higher net realized gains, and a higher tax benefit related to the vesting of stock-based compensation awards during the quarter.

ENTERPRISE RISK MANAGEMENT

The Company’s Board of Directors has ultimate responsibility for risk oversight, as described more fully in our Proxy Statement, while management is tasked with the day-to-day management of the Company’s risks.

The Company manages and monitors risk through risk policies,

controls and limits. At the senior management level, an Enterprise Risk and Capital Committee (“ERCC”) oversees the risk profile and risk management practices of the Company.

The Company's enterprise risk management ("ERM") function supports the ERCC and functional committees, and is tasked with, among other things:

risk identification and assessment;
the development of risk appetites, tolerances, and limits;
risk monitoring; and


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internal and external risk reporting.

The Company categorizes its main risks as insurance risk, operational risk and financial risk. Insurance risk and financial risk are described in more detail below. Operational risk, including cybersecurity, and specific risk tolerances for natural catastrophes, terrorism and pandemic risk are described in the ERM section of the MD&A in The Hartford’s 2023 Form 10-K Annual Report.

|INSURANCE RISK

Insurance risk is the risk of losses of both a catastrophic and non-catastrophic nature on the P&C and Group Benefits products the Company has sold. Catastrophe insurance risk is the exposure arising from both natural catastrophes (e.g., weather, earthquakes, wildfires, pandemics) and man-made catastrophes (e.g., terrorism, cyber-attacks) that create a concentration or aggregation of loss across the Company's insurance or asset portfolios.

Sources of Insurance Risk Non-catastrophe insurance risks exist within each of the Company's segments except Hartford Funds and include:

Property-** Risk of loss to personal or commercial property from automobile related accidents, weather, explosions, smoke, shaking, fire, theft, vandalism, inadequate installation, faulty equipment, collisions and falling objects, and/or machinery mechanical breakdown resulting in physical damage, losses from PV&T and other covered perils.
Liability-** Risk of loss from automobile related accidents, uninsured and underinsured drivers, lawsuits from accidents, defective products, breach of warranty, negligent acts by professional practitioners, environmental claims, latent exposures, fraud, coercion, forgery, failure to fulfill obligations per contract surety, liability from errors and omissions, losses from credit and political risk insurance ("CPRI") coverages, losses from derivative lawsuits, and other securities actions and covered perils.
Mortality-** Risk of loss from unexpected trends in insured deaths impacting timing of payouts from group life insurance, personal or commercial automobile related accidents, and death of employees or executives during the course of employment, while on disability, or while collecting workers compensation benefits.
Morbidity-** Risk of loss to an insured from illness incurred during the course of employment or illness from other covered perils.
Disability-** Risk of loss incurred from personal or commercial automobile related losses, accidents arising outside of the workplace, injuries or accidents incurred during the course of employment, or from equipment, with each loss resulting in short-term or long-term disability payments.
Longevity-** Risk of loss from increased life expectancy trends among policyholders receiving long-term benefit payments.
Cyber Insurance**- Risk of loss to property, breach of data and business interruption from various types of cyber-attacks.

Catastrophe risk primarily arises in the property, automobile, workers' compensation, casualty, group life, and group disability lines of business but could also arise from other coverages such as losses under PV&T and CPRI policies. Not all insurance losses arising from catastrophe risk are categorized as catastrophe losses within the segment operating results. For example, losses arising from the COVID-19 pandemic were not categorized as catastrophe losses within either the P&C or Group Benefits segments as the pandemic was not identified as a catastrophe event by the Property Claim Service in the U.S. See the term Current Accident Year Catastrophe Ratio within the Key Performance Measures section of MD&A for an explanation of how the Company defines catastrophe losses in its financial reporting.

Impact Non-catastrophe insurance risk can arise from unexpected loss experience, underpriced business and/or underestimation of loss reserves and can have significant effects on the Company’s earnings. Catastrophe insurance risk can arise from various unpredictable events and can have significant effects on the Company's earnings and may result in losses that could constrain its liquidity.

Management The Company's policies and procedures for managing these risks include disciplined underwriting protocols, exposure controls, sophisticated risk-based pricing, risk modeling, risk transfer, and capital management strategies. The Company has established underwriting guidelines for both individual risks, including individual policy limits, and risks in the aggregate, including aggregate exposure limits by geographic zone and peril. The Company uses both internal and third-party models to estimate the potential loss resulting from various catastrophe events and the potential financial impact those events would have on the Company's financial position and results of operations across its businesses.

The Hartford closely monitors scientific literature on climate change to help identify climate change risks impacting our business. We use data from the scientific community and other outside experts including partnerships with third-party catastrophe modeling firms to inform our risk management activities and stay abreast of potential implications of climate-related impacts that we incorporate into our risk assessment. We regularly study these climate change implications and incorporate these risks into our catastrophe risk assessment and management strategy through product pricing, underwriting and management of aggregate risk to manage implications of severe weather and climate change in our insurance portfolio.

In addition, certain insurance products offered by The Hartford provide coverage for losses incurred due to cyber events and the Company has assessed and modeled how those products would respond to different events in order to manage its aggregate exposure to losses incurred under the insurance policies we sell. The Company models numerous deterministic scenarios including losses caused by malware, data breach, distributed denial of service attacks, intrusions of cloud environments and attacks of power grids.


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Among specific risk tolerances set by the Company, risk limits are set for natural catastrophes, terrorism risk and pandemic risk.

Reinsurance as a Risk Management Strategy

The Company uses reinsurance to transfer certain risks to reinsurance companies based on specific geographic or risk concentrations. A variety of traditional reinsurance products are used as part of the Company's risk management strategy, including excess of loss occurrence-based products that reinsure property and workers' compensation exposures, and individual risk (including facultative reinsurance) or quota share arrangements that reinsure losses from specific classes or lines of business. The Company has no significant finite risk contracts in place and the statutory surplus benefit from all such prior year contracts is immaterial. The Hartford also participates in governmentally administered reinsurance facilities such as the Florida Hurricane Catastrophe Fund (“FHCF”), the Terrorism

Risk Insurance Program Reauthorization Act (“TRIPRA") and other reinsurance programs relating to particular risks or specific lines of business.

Reinsurance for Catastrophes- The Company utilizes various reinsurance programs to mitigate catastrophe losses including excess of loss occurrence-based treaties covering property and workers’ compensation, a catastrophe bond, an aggregate property catastrophe treaty, and individual risk agreements (including facultative reinsurance) that reinsure losses from specific classes or lines of business. The occurrence property catastrophe treaty and workers’ compensation catastrophe treaties beginning with the January 1, 2021 renewal do not cover pandemic losses, as most industry reinsurance programs exclude communicable disease. The Company has reinsurance in place to cover individual group life losses in excess of $1 per person.

Primary Catastrophe Treaty Reinsurance Coverages as of March 31, 2024 [1]


	Portion of losses reinsured	Portion of losses retained by The Hartford
Per Occurrence Property Catastrophe Treaty from 1/1/2024 to 12/31/2024 [1] [2]
Losses of $0 to $200	None	100% retained
Losses of $200 to $350 for earthquakes and named hurricanes and tropical storms [3]	None	100% retained
Losses of $200 to $350 from one event other than earthquakes and named hurricanes and tropical storms [3]	40% of $150 in excess of $200	60% co-participation
Losses of $350 to $500 from one event (all perils)	75% of $150 in excess of $350	25% co-participation
Losses of $500 to $1.2 billion from one event [4] (all perils)	90% of $700 in excess of $500	10% co-participation
Per Occurrence Property Catastrophe Bond from 1/1/2024 to 12/31/2026 [5]
Losses of $1.1 billion to $1.4 billion for tropical cyclone and earthquake events [6]	66.67% of $300 in excess of $1.1 billion	33.33% of $300 in excess of $1.1 billion
Aggregate Property Catastrophe Treaty for 1/1/2024 to 12/31/2024 [7]
$0 to $750 of aggregate losses	None	100% Retained
$750 to $950 of aggregate losses	100%	None
Workers' Compensation Catastrophe Treaty for 1/1/2024 to 12/31/2024
Losses of $0 to $100 from one event	None	100% Retained
Losses of $100 to $450 from one event [8]	80% of $350 in excess of $100	20% co-participation

*[1]*These agreements do not cover the assumed reinsurance business which purchases its own retrocessional coverage.

*[2]*In addition to the Per Occurrence Property Catastrophe Treaty, for Florida homeowners wind events, The Hartford has purchased the mandatory FHCF reinsurance for the annual period starting June 1, 2023, and will renew for the annual period starting June 1, 2024. Retention and coverage varies by writing company. For the 2023 - 2024 period, the writing company with the largest coverage under FHCF is Hartford Insurance Company of the Midwest, with coverage of $38 in per event losses in excess of a $20 retention (estimates are based on best available information at this time and are periodically updated as information is made available by Florida).

*[3]*Named hurricanes and tropical storms are defined as any storm or storm system declared to be a hurricane or tropical storm by the US National Hurricane Center, US Weather Prediction Center, or their successor organizations (being divisions of the US National Weather Service).

*[4]*Portions of this layer of coverage extend beyond a traditional one year term.

*[5]*For further information on the Company's catastrophe bond, see MD&A - Enterprise Risk Management, Insurance Risk included in the Company's 2023 Form 10-K Annual report.

*[6]*Tropical cyclones are defined as a storm or storm system that has been declared by National Weather Service or any division or agency thereof (including the National Hurricane Center or the Weather Prediction Center) or any of their successors to be a hurricane, tropical storm, or tropical depression.

*[7]*The aggregate treaty is not limited to a single event; rather, it is designed to provide reinsurance protection for the aggregate of all catastrophe events (up to $350 per event), either designated by the Property Claim Services office of Verisk or, for international business, net losses arising from two or more risks involved in the same loss occurrence totaling at least $500 thousand. All catastrophe losses, except assumed reinsurance business losses, apply toward satisfying the $750 attachment point under the aggregate treaty.

*[8]*In addition to the limits shown, the workers' compensation reinsurance includes a non-catastrophe, industrial accident layer, providing coverage for 80% of $25 in per event losses in excess of a $25 retention.

In addition to the property catastrophe reinsurance coverage described in the above table, the Company has other reinsurance agreements that cover property catastrophe losses,

some of which provide for reinstatement of limits in the event of a loss with reinstatement provisions varying depending on the layer of coverage. The Per Occurrence Property Catastrophe


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Treaty, and Workers' Compensation Catastrophe Treaty include a provision to reinstate one limit in the event that a catastrophe loss exhausts limits on one or more layers under the treaties.

Reinsurance for Terrorism- For the risk of terrorism, private sector catastrophe reinsurance capacity is generally limited and largely unavailable for terrorism losses caused by nuclear, biological, chemical or radiological attacks. As such, the Company's principal reinsurance protection against large-scale terrorist attacks is the coverage currently provided through TRIPRA to the end of 2027.

TRIPRA provides a backstop for insurance-related losses resulting from any “act of terrorism”, which is certified by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Attorney General, for losses that exceed a threshold of industry losses of $200. Under the program, in any one calendar year, the federal government will pay a percentage of losses incurred from a certified act of terrorism after an insurer's losses exceed 20% of the Company's eligible direct commercial earned premiums of the prior calendar year up to a combined annual aggregate limit for the federal government and all insurers of $100 billion. The percentage of losses paid by the federal government is 80%. The Company's estimated deductible under the program is $2.0 billion for 2024. If an act of terrorism or acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, Congress would be responsible for determining how additional losses in excess of $100 billion will be paid.

Reinsurance for A&E and Navigators Group Reserve Development - The Company has two ADC reinsurance agreements in place, both of which are accounted for as retroactive reinsurance. One agreement covers substantially all A&E reserve development for 2016 and prior accident years (the “A&E ADC”) up to an aggregate limit of $1.5 billion and the other covered substantially all reserve development of Navigators Insurance Company and certain of its affiliates for 2018 and prior accident years (the “Navigators ADC”) up to an aggregate limit of $300, for which the Company had previously ceded the available limit. As of December 31, 2023, the Company had paid claims related to the Navigators ADC in excess of the $1.816 billion acquisition date reserves plus the $100 retention. During the three months ended March 31, 2024, the Company began collecting recoveries from NICO and as a result amortized $24 of the $209 deferred gain within benefits, losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations. As of March 31, 2024 and December 31, 2023, the deferred gain on the Navigators ADC was $185 and $209, respectively, and is included in other liabilities on the Condensed Consolidated Balance Sheets.

For more information on the A&E ADC and the Navigators ADC, see Note 1 - Basis of Presentation and Significant Accounting Policies and Note 11 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements, included in The Hartford's 2023 Form 10-K Annual Report.

|FINANCIAL RISK

Financial risks include direct and indirect risks to the Company's financial objectives from events that impact financial market conditions and the value of financial assets. Some events may

cause correlated movement in multiple risk factors. The primary sources of financial risks are the Company's invested assets.

Consistent with its risk appetite, the Company establishes financial risk limits to control potential loss on a U.S. GAAP, statutory, and economic basis. Exposures are actively monitored and managed, with risks mitigated where appropriate. The Company uses various risk management strategies, including limiting aggregation of risk, portfolio re-balancing and hedging with over-the-counter ("OTC") and exchange-traded derivatives with counterparties meeting the appropriate regulatory and due diligence requirements. Derivatives may be used to achieve the following Company-approved objectives: (1) hedging risk arising from interest rate, equity market, commodity market, credit spread and issuer default, price or currency exchange rate risk or volatility; (2) managing liquidity; (3) controlling transaction costs; and (4) engaging in income generation covered call transactions and synthetic replication transactions. Derivative activities are monitored and evaluated by the Company’s compliance and risk management teams and reviewed by senior management. The Company identifies different categories of financial risk, including liquidity, credit, interest rate, equity, and foreign currency exchange.

Liquidity Risk

Liquidity risk is the risk to current or prospective earnings or capital arising from the Company's inability or perceived inability to meet its contractual funding obligations as they come due.

Sources of Liquidity Risk Sources of liquidity risk include funding risk, company-specific liquidity risk and market liquidity risk resulting from differences in the amount and timing of sources and uses of cash as well as company-specific and general market conditions. Stressed market conditions may impact the ability to sell assets or otherwise transact business and may result in a significant loss in value of the investment portfolio.

Impact Inadequate capital resources and liquidity could negatively affect the Company’s overall financial strength and its ability to generate cash flows from its businesses, borrow funds at competitive rates, and raise new capital to meet operating and growth needs.

Management The Company has defined ongoing monitoring and reporting requirements to assess liquidity across the enterprise under both current and stressed market conditions. The Company measures and manages liquidity risk exposures and funding needs within prescribed limits across legal entities, taking into account legal, regulatory and operational limitations to the transferability of liquid assets among legal entities. The Company also monitors internal and external conditions, and identifies material risk changes and emerging risks that may impact operating cash flows or liquid assets. The liquidity requirements of The Hartford Financial Services Group, Inc. ("HFSG Holding Company") have been and will continue to be met by the HFSG Holding Company's fixed maturities, short-term investments and cash, and dividends from its subsidiaries, principally from its insurance operations, as well as the issuance of common stock, debt or other capital securities and borrowings from its credit facilities, as needed. The Company maintains multiple sources of contingent liquidity including a revolving credit facility, an intercompany liquidity agreement that allows for short-term advances of funds among


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the HFSG Holding Company and certain affiliates, and access to collateralized advances from the Federal Home Loan Bank of Boston ("FHLBB") for certain affiliates. The Company's CFO has primary responsibility for liquidity risk.

Credit Risk and Counterparty Risk

Credit risk is the risk to earnings or capital due to uncertainty of an obligor’s or counterparty’s ability or willingness to meet its obligations in accordance with contractually agreed upon terms. Credit risk is comprised of three major factors: the risk of change in credit quality, or credit migration risk; the risk of default; and the risk of a change in value due to changes in credit spreads.

Sources of Credit Risk The majority of the Company’s credit risk is concentrated in its investment holdings and use of derivatives, but it is also present in the Company’s ceded reinsurance activities and various insurance products.

Impact A decline in creditworthiness is typically reflected as an increase in an investment’s credit spread and an associated decline in the investment's fair value, potentially resulting in recording an ACL and an increased probability of a realized loss upon sale. In certain instances, counterparties may default on their obligations and the Company may realize a loss on default. Premiums receivable, including premiums for retrospectively rated plans, reinsurance recoverable and deductible losses recoverable are also subject to credit risk based on the counterparty’s inability to pay.

Management The objective of the Company’s enterprise credit risk management strategy is to identify, quantify and manage credit risk in aggregate and to limit potential losses in accordance with the Company's credit risk management policy. The Company manages its credit risk by managing aggregations of risk, holding a diversified mix of issuers and counterparties across its investment, reinsurance and insurance portfolios and limiting exposure to any specific reinsurer or counterparty. Potential credit losses can be mitigated through diversification (e.g., geographic regions, asset types, industry sectors), hedging and the use of collateral to reduce net credit exposure.

The Company manages credit risk through the use of various surveillance, analyses and governance processes. The investment and reinsurance areas have formal policies and procedures for counterparty approvals and authorizations, which establish criteria defining minimum levels of creditworthiness and financial stability for eligible counterparties. Potential investments are subject to underwriting reviews and private securities are subject to management approval. Mitigation strategies vary across the three sources of credit risk, but may include:

Investing in a portfolio of high-quality and diverse securities;
Selling investments subject to heightened credit risk;
Hedging through use of credit default swaps;
Clearing derivative transactions through central clearing houses that require daily variation margin;
Entering into derivative and reinsurance contracts only with strong creditworthy institutions;
Requiring collateral; and
Non-renewing policies/contracts or reinsurance treaties.

The Company has developed credit exposure thresholds which are based upon counterparty ratings. Aggregate counterparty credit quality and exposure are monitored on a daily basis utilizing an enterprise-wide credit exposure information system that contains data on issuers, ratings, exposures, and credit limits. Exposures are tracked on a current and potential basis and aggregated by ultimate parent of the counterparty across investments, reinsurance receivables, insurance products with credit risk, and derivatives.

As of March 31, 2024, the Company had no investment exposure to any credit concentration risk of a single issuer or counterparty greater than 10% of the Company’s stockholders' equity, other than the U.S. government and certain U.S. government agencies. For further discussion of concentration of credit risk in the investment portfolio, see the Concentration of Credit Risk section in Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

Credit Risk of Derivatives

The Company uses various derivative counterparties in executing its derivative transactions. The use of counterparties creates credit risk that the counterparty may not perform in accordance with the terms of the derivative transaction.

Downgrades to the credit ratings of the Company’s insurance operating companies may have adverse implications for its use of derivatives. In some cases, downgrades may give derivative counterparties for OTC derivatives and clearing brokers for OTC-cleared derivatives the right to cancel and settle outstanding derivative trades or require additional collateral to be posted. In addition, downgrades may result in counterparties and clearing brokers becoming unwilling to engage in or clear additional derivatives or may require additional collateralization before entering into any new trades.

The Company also has derivative counterparty exposure policies which limit the Company’s exposure to credit risk. Credit exposures are generally quantified based on the prior business day’s net fair value, including income accruals, of all derivative positions transacted with a single counterparty for each separate legal entity. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not necessarily reflective of credit risk. The Company enters into collateral arrangements in connection with its derivatives positions and collateral is pledged to or held by, or on behalf of, the Company to the extent the exposure is greater than zero, subject to minimum transfer thresholds, if applicable. In accordance with industry standards and the contractual requirements, collateral is typically settled on the same business day. For further discussion, see the Derivative Commitments section of Note 13 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.


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Use of Credit Derivatives

The Company may also use credit default swaps to manage credit exposure or to assume credit risk to enhance yield.

Credit Risk Reduced Through Credit Derivatives

The Company uses credit derivatives to purchase credit protection with respect to a single entity or referenced index. The Company purchases credit protection through credit default swaps to economically hedge and manage credit risk of certain fixed maturity investments across multiple sectors of the investment portfolio.

Credit Risk Assumed Through Credit Derivatives

The Company may also enter into credit default swaps that assume credit risk as part of replication transactions. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that are permissible investments under the Company’s investment policies. These swaps primarily reference investment grade single corporate issuers and indexes.

For further information on credit derivatives, see Note 6 - Derivatives of Notes to Condensed Consolidated Financial Statements.

Credit Risk of Business Operations

The Company is subject to credit risk related to the Company's Commercial Lines business that is written with large deductible policies or retrospectively-rated plans (referred to as "loss sensitive business"). The Company’s results of operations could be adversely affected if a significant portion of such contract holders failed to reimburse the Company for the deductible amount or the retrospectively rated policyholders failed to pay additional premiums owed. While the Company attempts to manage the risks discussed above through underwriting, credit analysis, collateral requirements, provision for bad debt, and other oversight mechanisms, the Company’s efforts may not be successful.

Interest Rate Risk

Interest rate risk is the risk of financial loss due to adverse changes in the value of assets and liabilities arising from movements in interest rates. Interest rate risk encompasses exposures with respect to changes in the level of interest rates, the shape of the term structure of rates and the volatility of interest rates. Interest rate risk does not include exposure to changes in credit spreads.

Sources of Interest Rate Risk The Company has exposure to interest rate risk arising from investments in fixed maturities and commercial mortgage loans, issuances by the Company of debt securities, preferred stock and similar securities, discount rate assumptions associated with the Company’s claim reserves and pension and other postretirement benefit obligations, and assets that support the Company's pension and other postretirement benefit plans.

Impact Changes in interest rates from current levels can have both favorable and unfavorable effects for the Company.

Management The Company primarily manages its exposure to interest rate risk by constructing investment portfolios that seek to protect the Company from the economic impact

associated with changes in interest rates by setting portfolio duration targets that are aligned with the duration of the liabilities that they support. The Company analyzes interest rate risk using various models including parametric models and cash flow simulation under various market scenarios of the liabilities and their supporting investment portfolios. Key metrics that the Company uses to quantify its exposure to interest rate risk inherent in its invested assets and the associated liabilities include duration, convexity and key rate duration.

The Company may also use interest rate swaps and, to a lesser extent, futures to mitigate interest rate risk associated with its investment portfolio or liabilities and to manage portfolio duration.

Equity Risk

Equity risk is the risk of financial loss due to changes in the value of global equities or equity indices.

Sources of Equity Risk The Company has exposure to equity risk from invested assets, assets that support the Company’s pension and other postretirement benefit plans, and fee income derived from Hartford Funds AUM.

Impact The investment portfolio is exposed to losses from market declines affecting equity securities and derivatives, which could negatively impact the Company's reported earnings. In addition, investments in limited partnerships and other alternative investments generally have a level of correlation to domestic equity market levels and can expose the Company to losses in earnings if valuations decline; however, earnings impacts are recognized on a lag as results from private equity investments and other funds are generally reported on a three-month delay. For assets supporting pension and other postretirement benefit plans, the Company may be required to make additional plan contributions if equity investments in the plan portfolios decline in value. Hartford Funds earnings are also significantly influenced by the U.S. and other equity markets. Generally, declines in equity markets will reduce the value of average daily AUM and the amount of fee income generated from those assets. Increases in equity markets will generally have the inverse impact.

Management The Company uses various approaches in managing its equity exposure, including limits on the proportion of assets invested in equities, diversification of the equity portfolio, and, at times, hedging of changes in equity indices. For assets supporting pension and other postretirement benefit plans, the asset allocation mix is reviewed on a periodic basis. In order to minimize risk, the pension plans maintain a listing of permissible and prohibited investments and impose concentration limits and investment quality requirements on permissible investment options.


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Foreign Currency Exchange Risk

Foreign currency exchange risk is the risk of financial loss due to changes in the relative value between currencies.

Sources of Currency Risk The Company has foreign currency exchange risk in non-U.S. dollar denominated cash, fixed maturities, equities, and derivative instruments. In addition, the Company has non-U.S. subsidiaries, some with functional currencies other than U.S. dollar, and which transact business in multiple currencies resulting in assets and liabilities denominated in foreign currencies.

Impact Changes in relative values between currencies can create variability in cash flows and realized or unrealized gains and losses on changes in the fair value of assets and liabilities.

Management The Company manages its foreign currency exchange risk primarily through asset-liability matching and through the use of derivative instruments. However, legal entity

capital is invested in local currencies in order to satisfy regulatory requirements and to support local insurance operations. The foreign currency exposure of non-U.S. dollar denominated investments will most commonly be reduced through the sale of the assets or through hedges using foreign currency swaps and forwards.

Investment Portfolio Risk

The following table presents the Company’s fixed maturities, AFS, by credit quality. The credit ratings referenced throughout this section are based on availability and are generally the midpoint of the available ratings among Moody’s, S&P, and Fitch. If no rating is available from a rating agency, then an internally developed rating is used. Accrued investment income related to fixed maturities is not included in the amortized cost or fair value of the fixed maturities. For further information refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.


Fixed Maturities, AFS by Credit Quality
	March 31, 2024						December 31, 2023
	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
United States Government/Government agencies	$	5,330	$	4,846	11.9	%	$	5,174	$	4,776	12.0	%
AAA	7,061		6,838		16.7	%	7,277		7,055		17.7	%
AA	7,872		7,578		18.5	%	7,527		7,270		18.3	%
A	10,981		10,488		25.7	%	10,253		9,828		24.7	%
BBB	9,805		9,264		22.7	%	9,710		9,198		23.1	%
BB & below	1,897		1,826		4.5	%	1,785		1,691		4.2	%
Total fixed maturities, AFS	$	42,946	$	40,840	100.0	%	$	41,726	$	39,818	100.0	%

The fair value of fixed maturities, AFS increased as compared to December 31, 2023, primarily due to net additions of corporate bonds, partially offset by a decrease in valuations due to higher interest rates, net of tighter credit spreads. FVO securities are

not included in the preceding table. For further discussion on FVO securities, see Note 4 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.


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