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

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


Fixed Maturities, AFS by Credit Quality
	June 30, 2025						December 31, 2024
	Amortized Cost		Fair Value		Percent of Total Fair Value		Amortized Cost		Fair Value		Percent of Total Fair Value
United States Government/Government agencies	$	5,520	$	5,130	11.5	%	$	5,424	$	4,937	11.6	%
AAA	7,455		7,333		16.4	%	7,340		7,166		16.8	%
AA	7,683		7,439		16.7	%	7,762		7,484		17.6	%
A	12,554		12,239		27.5	%	11,422		10,933		25.7	%
BBB	10,319		10,070		22.6	%	10,227		9,722		22.8	%
BB & below	2,349		2,347		5.3	%	2,363		2,325		5.5	%
Total fixed maturities, AFS [1]	$	45,880	$	44,558	100.0	%	$	44,538	$	42,567	100.0	%

*[1]*Excludes FVO securities. For further discussion on FVO securities, see Note 4 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.

Commercial & Residential Real Estate


Exposure to CMBS & RMBS Bonds by Credit Quality as of June 30, 2025
	AAA				AA				A				BBB				BB and Below				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
CMBS
Agency [1]	$	12	$	11	$	1,237	$	1,143	$	—	$	—	$	—	$	—	$	—	$	—	$	1,249	$	1,154
Bonds	489		472		421		397		210		195		170		164		139		123		1,429		1,351
Interest Only	45		44		26		26		4		5		5		5		—		—		80		80
Total CMBS	546		527		1,684		1,566		214		200		175		169		139		123		2,758		2,585
RMBS
Agency	—		—		3,078		2,915		—		—		—		—		—		—		3,078		2,915
Non-Agency	1,671		1,595		746		714		222		215		62		60		—		—		2,701		2,584
Sub-Prime	1		1		3		3		1		1		5		5		4		4		14		14


Total RMBS	1,672		1,596		3,827		3,632		223		216		67		65		4		4		5,793		5,513
Total CMBS & RMBS	$	2,218	$	2,123	$	5,511	$	5,198	$	437	$	416	$	242	$	234	$	143	$	127	$	8,551	$	8,098


Exposure to CMBS & RMBS Bonds by Credit Quality as of December 31, 2024
	AAA				AA				A				BBB				BB and Below				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
CMBS
Agency [1]	$	14	$	14	$	1,270	$	1,145	$	—	$	—	$	—	$	—	$	—	$	—	$	1,284	$	1,159
Bonds	609		578		407		376		267		240		147		137		167		153		1,597		1,484
Interest Only	53		51		31		31		6		6		5		5		—		—		95		93
Total CMBS	676		643		1,708		1,552		273		246		152		142		167		153		2,976		2,736
RMBS
Agency	—		—		3,002		2,784		—		—		—		—		—		—		3,002		2,784
Non-Agency	1,564		1,467		746		697		203		193		65		61		8		6		2,586		2,424
Sub-Prime	1		1		5		5		2		2		7		7		7		7		22		22


Total RMBS	1,565		1,468		3,753		3,486		205		195		72		68		15		13		5,610		5,230
Total CMBS & RMBS	$	2,241	$	2,111	$	5,461	$	5,038	$	478	$	441	$	224	$	210	$	182	$	166	$	8,586	$	7,966

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


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

As of June 30, 2025, mortgage loans had an amortized cost of $6.5 billion and carrying value of $6.5 billion, with an ACL of $43. As of December 31, 2024, mortgage loans had an amortized cost of $6.4 billion and carrying value of $6.4 billion, with an ACL of $44.

The Company funded $485 of commercial mortgage loans, primarily industrial and multifamily properties, with a weighted average loan-to-value (“LTV”) ratio of 57% and a weighted average yield of 6.6% during the six months ended June 30, 2025. The Company continues to originate commercial mortgage loans on institutional-quality properties with strong LTV ratios. There were no mortgage loans held for sale as of June 30, 2025, or December 31, 2024.

Municipal Bonds


Available-For-Sale Investments in Municipal Bonds
	June 30, 2025					December 31, 2024
	Amortized Cost		Fair Value		Weighted Average Credit Quality	Amortized Cost		Fair Value		Weighted Average Credit Quality
General Obligation	$	940	$	911	AA	$	1,033	$	1,008	AA
Pre-refunded [1]	47		47		AA+	86		87		AA+
Revenue
Transportation	913		843		A+	1,134		1,084		A+
Health Care	907		822		A+	864		789		A+
Leasing [2]	564		526		AA	627		588		AA
Education	379		356		AA	402		385		AA
Water & Sewer	296		269		AA	308		289		AA
Housing	185		175		AA	195		185		AA
Power	174		160		A+	281		272		A
Sales Tax	166		159		AA	183		183		AA
Other	414		382		A+	461		434		AA-
Total Revenue	3,998		3,692		AA-	4,455		4,209		AA-
Total Municipal	$	4,985	$	4,650	AA-	$	5,574	$	5,304	AA-

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

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

As of June 30, 2025, the largest issuer concentrations were the State of California, the State of Illinois, and CommonSpirit Health, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds. As of December 31, 2024, the largest issuer concentrations were the State of Illinois, the State of California, and the Metropolitan Transportation Authority, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds. In total, municipal bonds make up 8% of the fair value of the Company's investment portfolio.

Limited Partnerships and Other Alternative Investments

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

Income or losses on investments in limited partnerships and other alternative investments are recognized on a lag as results from private equity investments and other funds are generally reported on a three-month delay.


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Limited Partnerships and Other Alternative Investments - Net Investment Income
	Three Months Ended June 30,								Six Months Ended June 30,
	2025				2024				2025				2024
	Amount		Yield [1]		Amount		Yield [1]		Amount		Yield [1]		Amount		Yield [1]
Real estate joint ventures and funds	$	(14)	(3.1	%)	$	(34)	(7.2	%)	$	(22)	(2.4	%)	$	(66)	(6.7	%)
Private equity funds	(1)		(0.1	%)	22		4.7	%	39		3.9	%	42		4.5	%
Other funds	19		11.7	%	12		9.2	%	26		8.0	%	28		11.2	%
Other alternative investments [2]	9		6.5	%	16		12.9	%	9		3.4	%	28		11.0	%
Total	$	13	1.0	%	$	16	1.3	%	$	52	2.1	%	$	32	1.3	%

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

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


Investments in Limited Partnerships and Other Alternative Investments
	June 30, 2025				December 31, 2024
	Amount		Percent		Amount		Percent
Real estate joint ventures and funds	$	1,903	35.7	%	$	1,907	37.8	%
Private equity funds	2,164		40.6	%	1,956		38.8	%
Other funds	696		13.1	%	623		12.4	%
Other alternative investments [1]	562		10.6	%	556		11.0	%
Total	$	5,325	100.0	%	$	5,042	100.0	%

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

Fixed Maturities, AFS — Unrealized Loss Aging

The total gross unrealized losses were $1.8 billion as of June 30, 2025, and have decreased $453 since December 31, 2024, primarily due to lower interest rates. As of June 30, 2025, $1.3 billion of the gross unrealized losses were associated with fixed maturities, AFS depressed less than 20% of amortized cost. The remaining $0.4 billion of gross unrealized losses were associated with fixed maturities, AFS depressed greater than 20%. The fixed maturities, AFS depressed more than 20% primarily related to corporate fixed maturities, municipal bonds, and U.S. Treasuries, that are mainly depressed because current interest rates are higher than at the respective purchase dates.

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


Unrealized Loss Aging for Fixed Maturities, AFS Securities
	June 30, 2025									December 31, 2024
Consecutive Months	Items	Amortized Cost		ACL		Unrealized Loss		Fair Value		Items	Amortized Cost		ACL		Unrealized Loss		Fair Value
Three months or less	117	$	1,431	$	—	$	(11)	$	1,420	1,044	$	9,577	$	—	$	(186)	$	9,391
Greater than three to six months	214	2,032		—		(34)		1,998		71	678		—		(24)		654
Greater than six to nine months	286	2,936		—		(74)		2,862		13	33		—		(1)		32
Greater than nine to eleven months	49	530		—		(16)		514		44	363		—		(32)		331
Twelve months or more	2,469	16,975		(14)		(1,639)		15,322		2,761	18,938		(13)		(1,984)		16,941
Total	3,135	$	23,904	$	(14)	$	(1,774)	$	22,116	3,933	$	29,589	$	(13)	$	(2,227)	$	27,349


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Unrealized Loss Aging for Fixed Maturities, AFS Continuously Depressed Over 20%
	June 30, 2025									December 31, 2024
Consecutive Months	Items	Amortized Cost		ACL		Unrealized Loss		Fair Value		Items	Amortized Cost		ACL		Unrealized Loss		Fair Value
Three months or less	34	$	243	$	—	$	(53)	$	190	132	$	1,003	$	(3)	$	(224)	$	776
Greater than three to six months	32	220		—		(50)		170		3	3		—		(1)		2
Greater than six to nine months	49	344		—		(82)		262		4	24		(1)		(6)		17
Greater than nine to eleven months	—	—		—		—		—		4	44		—		(12)		32
Twelve months or more	89	814		(1)		(252)		561		93	811		(1)		(259)		551
Total	204	$	1,621	$	(1)	$	(437)	$	1,183	236	$	1,885	$	(5)	$	(502)	$	1,378

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

Three and six months ended June 30, 2025

For the three months ended June 30, 2025, the Company recorded no credit losses. For the six months ended June 30, 2025, the Company recorded a net credit loss reversal of $2, primarily attributable to a decrease in the ACL of $3 on one below investment grade corporate issuer, partially offset by a credit loss of $1 related to a CMBS. For the three and six months ended June 30, 2025, there were no unrealized losses on securities with an ACL recognized in other comprehensive income ("OCI"). For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

There were no intent-to-sell impairments.

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

Future intent-to-sell impairments or credit losses may develop as the result of changes in our intent to sell specific securities that are in an unrealized loss position or if modeling assumptions, such as macroeconomic factors or security specific developments, change unfavorably from our current modeling assumptions, resulting in lower cash flow expectations.

Three and six months ended June 30, 2024

For the three and six months ended June 30, 2024, the Company recorded net credit losses of $1 and $2, respectively. Net credit losses were primarily attributable to increases in the ACL of $1 in both periods on CMBS, in addition for the six month period, net credit losses of $1 primarily attributable to one below investment grade corporate issuer. Unrealized losses on securities with an ACL recognized in OCI were less than $1.

There were no intent-to-sell impairments.

ACL on Mortgage Loans

Three and six months ended June 30, 2025

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

There were no credit loss adjustments on mortgage loans.

Three and six months ended June 30, 2024

For the three months ended June 30, 2024, the ACL on mortgage loans was unadjusted. For the six months ended June 30, 2024, the Company recorded a release in the ACL on mortgage loans of $3. The release reflected improved economic scenario forecasts and property specific reductions, partially offset by net additions of new loans.


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Capital Resources and Liquidity

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

Summary of Capital Resources and Liquidity

Capital available to the HIG Holding Company as of June 30, 2025:

Approximately $1.3 billion in fixed maturities, short-term investments, investment sales receivable and cash at the HIG Holding Company;
A senior unsecured revolving credit facility that provides for borrowing capacity up to $750 of unsecured credit through October 27, 2026. As of June 30, 2025, there were no borrowings outstanding; and
An intercompany liquidity agreement that allows for short-term advances of funds among the HIG Holding Company and certain affiliates of up to $2.0 billion for liquidity and other general corporate purposes. As of June 30, 2025, $1.85 billion was available, $150 was outstanding between certain affiliates and there were no amounts outstanding at the HIG Holding company.

Dividends and other sources of capital for the six months ended June 30, 2025:

The future payment of dividends from our subsidiaries is dependent on several factors including the business results, capital position and liquidity of our subsidiaries.

P&C -** HIG Holding Company received $729 of net dividends from the Company's property and casualty insurance subsidiaries through June 30, 2025;
Employee Benefits -** HIG Holding Company received $442 in dividends from Hartford Life and Accident Insurance Company ("HLA") through June 30, 2025;
Hartford Funds** - HIG Holding Company received $75 in dividends from Hartford Funds through June 30, 2025; and

Expected liquidity requirements for the next twelve months as of June 30, 2025:

$194 of interest on debt. See Note 13 - Debt of Notes to Consolidated Financial Statements in The Hartford's 2024 Form 10-K Annual Report.
$21 dividends on preferred stock, subject to the discretion of the Board of Directors; and
$590 of common stockholders' dividends, subject to the discretion of the Board of Directors and before share repurchases.

Expected liquidity requirements for beyond the next twelve months as of June 30, 2025:

Interest on and repayments of debt. See Note 13 - Debt of Notes to Consolidated Financial Statements in The Hartford's 2024 Form 10-K Annual Report; and
Preferred stock and common stock dividends, subject to the discretion of the Board of Directors.

Equity repurchase program:

During the six months ended June 30, 2025, the Company repurchased 6.8 million common shares for $800 under the $3.3 billion share repurchase authorized by the Board of Directors, effective through December 31, 2026. As of June 30, 2025, the Company has $2.35 billion remaining for equity repurchases under the current share repurchase program. During the period July 1, 2025 through July 25, 2025, the Company repurchased 1.2 million common shares for $146.

The timing of any repurchases of shares 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.

Liquidity Requirements and Sources of Capital

The HIG Holding Company

The liquidity requirements of the HIG Holding Company will primarily be met by HIG Holding Company's fixed maturities; short-term investments and cash; and dividends from its subsidiaries, principally its insurance operations. The Company maintains sufficient liquidity and has a variety of contingent liquidity resources to manage liquidity across a range of economic scenarios.

The HIG Holding Company expects to continue to receive dividends from its operating subsidiaries in the future and manages capital in its operating subsidiaries to be sufficient under significant economic stress scenarios. Dividends from subsidiaries and other sources of funds at the holding company may be used to repurchase shares under the authorized share repurchase program at the discretion of management.

Under significant economic stress scenarios, the Company has the ability to meet short-term cash requirements, if needed, by borrowing under its revolving credit facility or by having its insurance subsidiaries take collateralized advances under a facility with the FHLBB. The Company could also choose to


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have its insurance subsidiaries sell certain highly liquid, high quality fixed maturities or the Company could issue debt in the public markets under its shelf registration.

Dividends

The Hartford's Board of Directors declared the following quarterly dividends since April 1, 2025:

Common Stock Dividends


Declared	Record	Payable	Amount per share
May 21, 2025	June 2, 2025	July 2, 2025	$	0.520
July 23, 2025	September 2, 2025	October 2, 2025	$	0.520

Preferred Stock Dividends


Declared	Record	Payable	Amount per share
May 21, 2025	August 1, 2025	August 15, 2025	$	375.00
July 23, 2025	November 3, 2025	November 17, 2025	$	375.00

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

For a discussion of restrictions on dividends to the HIG Holding Company from its insurance subsidiaries, see the following "Dividends from Subsidiaries" discussion. For a discussion of potential restrictions on the HIG Holding Company's ability to pay dividends, see the risk factor "Our ability to declare and pay dividends is subject to limitations" in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Dividends From Subsidiaries

Dividends to HIG Holding Company from its insurance subsidiaries are restricted by insurance regulation. For a discussion of restrictions on dividends to HIG Holding Company from its insurance subsidiaries see Part II, Item 7, MD&A – Capital Resources and Liquidity - Dividends from Subsidiaries in The Hartford’s 2024 Form 10-K Annual Report.

Through the first six months of 2025, HIG Holding Company received $1.2 billion of net dividends from its subsidiaries, including $442 from HLA, $75 from Hartford Funds and $729 from its P&C subsidiaries, excluding $25 of P&C dividends that were subsequently contributed to P&C subsidiaries and $25 of P&C dividends related to interest payments on an intercompany note owed by Hartford Holdings, Inc. ("HHI") to Hartford Fire Insurance Company.

Other Sources of Capital for the HIG Holding Company

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

Shelf Registrations

The Hartford filed an automatic shelf registration statement with the Securities and Exchange Commission on September 23, 2024 that permits it to offer and sell debt and equity securities during the three-year life of the registration statement.

For further information regarding shelf registrations, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company's 2024 Form 10-K Annual Report.

Revolving Credit Facility

The Hartford has a senior unsecured revolving credit facility (the "Credit Facility") that provides up to $750 of unsecured credit through October 27, 2026. As of June 30, 2025, no borrowings were outstanding and no letters of credit were issued under the Credit Facility and The Hartford was in compliance with all financial covenants. For further information regarding the Credit Facility, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2024 Form 10-K Annual Report.

Intercompany Liquidity Agreements

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

As of June 30, 2025, $1.85 billion was available, $150 was outstanding between certain affiliates, and there were no amounts outstanding at the HIG Holding Company.

Collateralized Advances with Federal Home Loan Bank of Boston

The Company’s subsidiaries, Hartford Fire Insurance Company (“Hartford Fire”) and HLA, are members of the FHLBB. Membership allows these subsidiaries access to collateralized advances, which may be short- or long-term with fixed or variable rates. Advances may be used to support general corporate purposes, which would be presented as short- or long-term debt, or to earn incremental investment income, which


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would be presented in other liabilities consistent with other collateralized financing transactions. As of June 30, 2025, there were no advances outstanding.

For further information regarding collateralized advances with FHLBB, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2024 Form 10-K Annual Report.

Lloyd's Letter of Credit Facility

The Hartford has a committed credit facility agreement with a syndicate of lenders (the "Lloyd's Facility"). On October 21, 2024, The Hartford amended and restated its Lloyd’s Facility agreement. The amended and restated Lloyd's Facility has two tranches with one tranche extending a $74 commitment and the other tranche extending a £74 million ($101 as of June 30, 2025) commitment. As of June 30, 2025, letters of credit with an aggregate face amount of $74 and £74 million, or $101, were outstanding under the Lloyd's Facility.

Among other covenants, the Lloyd's Facility contains financial covenants regarding The Hartford's consolidated net worth and financial leverage. As of June 30, 2025, The Hartford was in compliance with all financial covenants of the facility.

For further information regarding the Lloyd's Facility, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2024 Form 10-K Annual Report.

Pension Plans and Other Postretirement Benefits

The Company does not have a 2025 required minimum funding contribution for the U.S. qualified defined benefit pension plan and the funding requirements for all pension plans are expected to be immaterial. The Company has not determined whether, and to what extent, contributions may be made to the U.S. qualified defined benefit pension plan in 2025. The Company will monitor the funded status of the U.S. qualified defined benefit pension plan during 2025 to make this determination. For further discussion of pension and other postretirement benefit obligations, see Note 16 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements.

Derivative Commitments

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

As of June 30, 2025, no derivative positions would be subject to immediate termination in the event of a downgrade of one level below the current financial strength ratings. This could change as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated.

Insurance Operations

While subject to variability period to period, underwriting and investment cash flows continue to provide sufficient liquidity to meet anticipated demands.

The principal sources of operating funds are premiums, fees earned from insurance and administrative service agreements and investment income, while investing cash flows primarily originate from maturities and sales of invested assets.

The Company’s insurance operations consist of property and casualty insurance products (collectively referred to as “Property & Casualty Operations”) and Employee Benefits products.

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

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


Property & Casualty Operations
	As of June 30, 2025
Fixed maturities	$	36,562
Short-term investments	1,707
Cash	138
Less: Derivative collateral	53
Total	$	38,354

Property & Casualty operations invested assets also include $140 in equity securities, $4.9 billion in mortgage loans and $4.1 billion in limited partnerships and other alternative investments.


Employee Benefits Operations
	As of June 30, 2025
Fixed maturities	$	7,990
Short-term investments	285
Cash	17
Less: Derivative collateral	18
Total	$	8,274

Employee Benefits operations invested assets also include $28 in equity securities, $1.6 billion in mortgage loans and $1.1 billion in limited partnerships and other alternative investments.

The primary uses of funds are to pay claims, claim adjustment expenses, commissions and other underwriting and insurance operating costs, to pay taxes, to purchase new investments and to make dividend payments to the HIG Holding Company.


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

Property & Casualty reserves for unpaid losses and loss adjustment expenses as of June 30, 2025 were $37.4 billion and net of reinsurance and other recoverables were $30.7 billion. Reserves for Property & Casualty unpaid losses and loss adjustment expenses include case reserves and incurred but not reported ("IBNR") reserves. The ultimate amount to be paid to settle both case and IBNR reserves is an estimate, subject to significant uncertainty. The actual amount to be paid is not finally determined until the Company reaches a settlement with the claimant. Final claim settlements may vary significantly from the present estimates, particularly since many claims will not be settled until well into the future. For a discussion of The Hartford’s judgment in estimating reserves for Property & Casualty see Part II, Item 7, MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves, Net of Reinsurance, in the Company's 2024 Form 10-K Annual Report, and for historical payments by reserve line net of reinsurance, see Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements included in the Company's 2024 Form 10-K Annual Report. The timing of future payments for the next twelve months and for beyond twelve months could vary materially from historical payment patterns due to, among other things, changes in claim reporting and payment patterns and large unanticipated settlements. In particular, there is significant uncertainty over the claim payment patterns of asbestos and environmental claims.

Employee Benefits reserves as of June 30, 2025 were $8.8 billion and net of reinsurance were $8.5 billion. Group life and disability obligations are estimated using assumptions based on the Company’s historical experience, modified for recent observed trends. For a discussion of The Hartford’s judgment in estimating LTD reserves for Employee Benefits see Part II, Item 7, MD&A - Critical Accounting Estimates, Employee Benefit LTD Reserves, Net of Reinsurance, in the Company’s 2024 Form 10-K Annual Report. For additional information about future policy benefits and other policyholder funds and benefits payable, see Note 10 - Reserve for Future Policy Benefits and Note 11 - Other Policyholder Funds and Benefits Payable of Notes to Condensed Consolidated Financial Statements. For historical payments by reserve line, net of reinsurance, see Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements included in the Company's 2024 Form 10-K Annual Report. Due to the significance of the assumptions used, payments for the next twelve months and beyond twelve months could materially differ from historical patterns.

Corporate reserves as of June 30, 2025 were $362 and net of reinsurance were $145. These reserves related to retained run-off liabilities of its former life and annuity business. For additional information about future policy benefits and other policyholder funds and benefits payable, see Note 10 - Reserve for Future Policy Benefits and Note 11 - Other Policyholder Funds and Benefits Payable of Notes to Condensed Consolidated Financial Statements.

Hartford Funds

Hartford Funds' principal sources of operating funds are fees earned from basis points on AUM with uses primarily for payments to subadvisors and other general operating expenses. As of June 30, 2025, Hartford Funds cash and short-term investments were $330.

Purchase and Other Obligations

The Hartford’s unfunded commitments to purchase investments in limited partnerships and other alternative investments, mortgage loans, private debt and equity securities, as well as tax credits are disclosed in Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements in The Hartford's 2024 Form 10-K Annual Report. It is anticipated that these unfunded commitments will be funded through the Company’s normal operating and investing activities.

In the normal course of business, the Company enters into contractual commitments to purchase various goods and services such as maintenance, human resources, and information technology. The Company’s operating lease commitments are disclosed in Note 20 - Leases of Notes to Consolidated Financial Statements in The Hartford's 2024 Form 10-K Annual Report. It is anticipated that these purchase commitments and operating lease obligations will be funded through the Company’s normal operating and investing activities.


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

Capitalization


Capital Structure
	June 30, 2025			December 31, 2024			Change

Long-term debt	$	4,369		$	4,366		—	%
Total debt	4,369			4,366			—	%
Common stockholders' equity excluding AOCI, net of tax	19,568			18,999			3	%
Preferred stock	334			334			—	%
AOCI, net of tax	(2,384)			(2,886)			17	%
Total stockholders’ equity	$	17,518		$	16,447		7	%
Total capitalization	$	21,887		$	20,813		5	%
Debt to stockholders’ equity	25		%	27		%
Debt to capitalization	20		%	21		%

Total capitalization increased $1,074 as of June 30, 2025 compared to December 31, 2024 primarily due to net income in excess of common stockholder dividends in the period, and a decrease in net unrealized losses on fixed maturities, AFS partially offset by share repurchases.

For additional information on AOCI, net of tax, including net unrealized gain (losses) from securities, see Note 15 - Changes

In and Reclassifications From Accumulated Other Comprehensive Income (Loss) and Note 5 - Investments of Notes to Condensed Consolidated Financial Statements. For additional information on debt, see Note 13 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2024 Form 10-K Annual Report.

Cash Flow


	Six Months Ended June 30,
	2025		2024
Net cash provided by operating activities	$	2,276	$	2,357
Net cash used for investing activities	$	(1,144)	$	(1,323)
Net cash used for financing activities	$	(1,151)	$	(1,009)
Cash and restricted cash– end of period	$	219	$	210

Cash provided by operating activities decreased in 2025 as compared to the prior year period primarily driven by an increase in P&C loss and loss adjustment expenses paid, higher operating expenses, including increased commissions and staffing costs, an increase in taxes paid, and a decrease in partnership cash income, partially offset by an increase in P&C and Employee Benefits premiums received.

Cash used for investing activities decreased in 2025 due to lower cash generated from operating activities and more cash used in financing activities.

Cash used for financing activities increased in 2025 as compared to the prior year period driven by an increase in treasury stock acquired, an increase in the net return of shares under incentive and stock compensation plans, and an increase in dividends paid on common stock.

Operating cash flows for the six months ended June 30, 2025 has been adequate to meet liquidity requirements.

Equity Markets

For a discussion of the potential impact of the equity markets on capital and liquidity, see the Financial Risk section in this MD&A and the Financial Risk on Statutory Capital section of the MD&A in the Company's 2024 Form 10-K Annual Report.


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

Ratings

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

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

Among other factors, rating agencies consider the level of statutory capital and surplus of our U.S. insurance subsidiaries as well as the level of GAAP capital held by the Company in determining the Company's financial strength and credit ratings. Rating agencies may implement changes to their capital formulas that have the effect of increasing the amount of capital we must hold in order to maintain our current ratings. See Risk Factors disclosed in Item 1A of Part I of the Company's 2024 Form 10-K Annual Report.

On July 3, 2025, A.M. Best upgraded the senior debt rating of the Company to "a" from "a-". The upgrade of the debt rating was based on the Company's balance sheet strength, operating performance, favorable business profile and enterprise risk management. A.M. Best also affirmed the insurance financial strength ratings for the Company.


Insurance Financial Strength Ratings as of July 25, 2025
	A.M. Best	Standard & Poor’s	Moody’s
Hartford Fire Insurance Company	A+	A+	A1
Hartford Life and Accident Insurance Company	A+	A+	A1
Navigators Insurance Company	A+	A+	Not Rated
Other Ratings:
The Hartford Insurance Group, Inc.:
Senior debt	a	BBB+	Baa1

Statutory Capital


U.S. Statutory Capital Rollforward for the Company's Insurance Subsidiaries
	Property and Casualty Insurance Subsidiaries [1] [2]		Employee Benefits Insurance Subsidiary		Total
U.S statutory capital at January 1, 2025	$	13,294	$	2,708	$	16,002
Statutory income	1,101		296		1,397
Dividends to parent	(729)		(442)		(1,171)
Other items	20		(2)		18
Net change to U.S. statutory capital	392		(148)		244
U.S statutory capital at June 30, 2025	$	13,686	$	2,560	$	16,246

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

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

Contingencies

Legal Proceedings

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

Legislative and Regulatory Developments

For a discussion regarding legislative and regulatory developments, see Part II, Item 7, MD&A - Capital Resources and Liquidity, Contingencies in the Company’s 2024 Form 10-K Annual Report.

On March 27, 2025, the Securities and Exchange Commission voted to end its defense of its climate disclosure rules, originally finalized in March of 2024, which would have required companies to report on their climate-related risks and greenhouse gas emissions in much greater detail than previously required. This development relieves companies of certain additional climate-related disclosure obligations which would have come into effect under the new rules. Additional future impacts could include shifts in regulatory approaches and increased uncertainty for businesses regarding climate-related disclosures. State-level efforts to require additional climate-related disclosure, notably in California, remain ongoing but face legal challenges similar to those faced by the SEC climate rules.

H.R.1, known as the “One Big Beautiful Bill Act” was signed into law on July 4, 2025. This comprehensive budget reconciliation package consolidates a wide array of public policy priorities, reshaping federal policy across numerous sectors of the American economy, including taxation, healthcare, social safety nets, immigration and education. The changes in H.R.1 are not expected to have a material impact on the Company's results of operations.


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

Impact of New Accounting Standards

For a discussion of accounting standards, see Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in The Hartford’s 2024 Form 10-K Annual Report.

Acronyms


A&E	Asbestos and Environmental	HIG	The Hartford Insurance Group, Inc.
ABS	Asset-Backed Securities	HIMCO	Hartford Investment Management Company
ACL	Allowance for Credit Losses	HLA	Hartford Life and Accident Insurance Company
ADC	Adverse Development Cover	IBNR	Incurred But Not Reported
AFS	Available-For-Sale	IT	Information Technology
ALAE	Allocated Loss Adjustment Expenses	LAE	Loss Adjustment Expense
AOCI	Accumulated Other Comprehensive Income	LCL	Liability for Credit Losses
AUM	Assets Under Management	LTD	Long-Term Disability
CAY	Current Accident Year	LTV	Loan-to-Value
CLOs	Collateralized Loan Obligations	MD&A	Management's Discussion and Analysis of Financial Conditions and Results of Operations
CMBS	Commercial Mortgage-Backed Securities	NAIC	National Association of Insurance Commissioners
CODM	Chief Operating Decision Maker	NICO	National Indemnity Company, a subsidiary of Berkshire Hathaway Inc. (“Berkshire”)
CPRI	Credit and Political Risk Insurance	NM	Not Meaningful
DAC	Deferred Policy Acquisition Costs	OCI	Other Comprehensive Income
DLR	Disabled Life Reserve	OTC	Over-the-Counter
D&O	Directors and Officers	P&C	Property and Casualty
DSCR	Debt Service Coverage Ratio	PV&T	Political Violence and Terrorism
ERCC	Enterprise Risk and Capital Committee	PYD	Prior Accident Year Development
ESPP	The Hartford Employee Stock Purchase Plan	RBC	Risk-Based Capital
ETF	Exchange-Traded Funds	RMBS	Residential Mortgage-Backed Securities
FASB	Financial Accounting Standards Board	ROA	Return on Assets
FHCF	Florida Hurricane Catastrophe Fund	ROE	Return on Equity
FHLBB	Federal Home Loan Bank of Boston	SEC	Securities and Exchange Commission
FVO	Fair Value Option	SOFR	Secured Overnight Financing Rate
GAAP	Generally Accepted Accounting Principles	TRIPRA	Terrorism Risk Insurance Program Reauthorization Act
HHI	Hartford Holdings, Inc.	ULAE	Unallocated Loss Adjustment Expenses


Table of Contents

Part I - Item 4. Controls and Procedures

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