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What changed in Hartford (The)'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Hartford (The)'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+635 added−635 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-21)

Top changes in Hartford (The)'s 2025 10-K

635 paragraphs added · 635 removed · 557 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

87 edited+13 added−11 removed89 unchanged
Biggest changeOur strategy to maximize value creation for all stakeholders remains consistent and focuses on the following priorities across our businesses: • Advancing leading underwriting capabilities across our portfolio to offer expanded products and services that solve for a broader range of customer needs; • Investing in end-to-end transformation, responsibly leveraging data, analytics, digital and artificial intelligence capabilities to drive better, faster decisions and enhance customer experiences; • Embracing a culture of growth and innovation and cross-enterprise collaboration; • Attracting, developing and retaining talent by enhancing our leadership’s capabilities, fostering our differentiating culture and investing in talent pipelines; • Maximizing distribution channels and product breadth to increase market share; • Optimizing organizational efficiency with a focus on continuous improvement; • Balancing use of excess capital for growth initiatives, investments in the business, and return to stockholders through dividends and share repurchases; and • Continuing to advance the Company’s sustainability leadership to drive value creation while positively impacting society at large.
Biggest changeOur strategy to maximize value creation for all stakeholders remains consistent and focuses on the following priorities across our businesses: • Embracing a culture of growth, innovation and cross-enterprise collaboration; • Advancing leading underwriting capabilities across our portfolio to offer expanded products and services that solve for a broader range of customer needs; • Maximizing distribution channels to increase market share; • Deepening customer centricity by delivering seamless, personalized experiences that build lasting trust and reflect the evolving needs of those we serve; • Optimizing organizational efficiency with a focus on continuous improvement; • Accelerating artificial intelligence enablement and responsibly leveraging data, analytics, and digital capabilities to deliver smarter, faster outcomes across the businesses; • Developing future ready talent to lead in a constantly evolving world; and • Balancing use of excess capital for growth initiatives, investments in the business, and return to stockholders through dividends and share repurchases.
Pay and Benefits Compensation and Pay Equity We offer competitive pay and benefits to our employees, with performance-based variable compensation making up a large share of the total compensation paid to executives in the organization. Variable compensation for the majority of employees includes an annual bonus plan. Our executives also receive long-term incentive awards.
Pay and Benefits Compensation and Pay Equity We offer competitive pay and benefits to our employees, with performance-based variable compensation making up a large share of the total compensation paid to executives in the organization. Variable compensation for the majority of employees includes an annual bonus plan. Executives also receive long-term incentive awards.
The Hartford also engages in a number of additional practices to ensure pay fairness, including: • Centralized compensation function that helps maintain consistent programs and practices across the enterprise; • Enterprise-wide framework for evaluating and aligning roles and compensation levels based on job responsibilities, market competitiveness, strategic importance of the role, and other relevant factors; • Prohibition against asking external job applicants for current or historical compensation information; • A practice to disclose to applicants and employees the salary ranges for most posted positions; • Individual compensation decisions that consider each employee’s experience, proficiency, and performance; • Training available for managers and Human Resources business partners on performance assessment and compensation planning; and • Multiple levels of review and approval required for all compensation decisions.
The Hartford engages in a number of additional practices to ensure pay fairness, including: • Centralized compensation function that helps maintain consistent programs and practices across the enterprise; • Enterprise-wide framework for evaluating and aligning roles and compensation levels based on job responsibilities, market competitiveness, strategic importance of the role, and other relevant factors; • Prohibition against asking external job applicants for current or historical compensation information; • A practice to disclose to applicants and employees the salary ranges for most posted positions; • Individual compensation decisions that consider each employee’s experience, proficiency, and performance; • Training available for managers and Human Resources business partners on performance assessment and compensation planning; and • Multiple levels of review and approval required for all compensation decisions.
We are committed to our extensive, long-standing policies and practices to help ensure fair pay across the organization, while also staying attuned to external best practices and insights, and leveraging input from subject matter experts. We evaluate our performance every year, and as markets and talent pools shift over time we work to evolve our practices accordingly.
We are committed to our extensive, long-standing policies and practices to help ensure fair pay across the organization, while staying attuned to external best practices and insights, and leveraging input from subject matter experts. We evaluate our performance every year, and as markets and talent pools shift over time we work to evolve our practices accordingly.
The products are marketed and distributed using independent retail agents and brokers, wholesale agents and global and specialty insurance and reinsurance brokers, with business also sold direct-to-consumer. In addition, the Company offers insurance products to customers of payroll service providers through its relationships with major national payroll companies in the United States and to members of affinity organizations.
The products are marketed and distributed using independent retail agents and brokers, wholesale agents and specialty insurance and reinsurance brokers, with business also sold direct-to-consumer. In addition, the Company offers insurance products to customers of payroll service providers through its relationships with major national payroll companies in the United States and to members of affinity organizations.
Actively-managed ETFs include fixed income, domestic equity and commodity products utilizing the same investment platform as our mutual funds. Multifactor ETFs are designed to track indices using passive investment techniques that strive to improve performance relative to traditional capitalization-weighted indices.
Actively-managed ETFs include fixed income and domestic equity products utilizing the same investment platform as our mutual funds. Multifactor ETFs are designed to track indices using passive investment techniques that strive to improve performance relative to traditional capitalization-weighted indices.
PURPOSE AND STRATEGIC PRIORITIES The Hartford’s mission is to provide people with the support and protection they need to pursue their unique ambitions, seize opportunity, and prevail through unexpected challenges.
Purpose and Strategic Priorities The Hartford’s mission is to provide people and businesses with the support and protection they need to pursue their unique ambitions, seize opportunity, and prevail through unexpected challenges.
These activities are performed by approximately 6,900 claim employees including, among others, claim adjusters, appraisers, attorneys, doctors, nurses, behavioral health specialists, investigators and data analytics professionals as well as training staff, management, and support staff. The Company contracts with a select number of approved regional, national and international suppliers to enhance claim capabilities and business resiliency.
These activities are performed by approximately 6,700 claim employees including, among others, claim adjusters, appraisers, attorneys, doctors, nurses, behavioral health specialists, investigators and data analytics professionals as well as training staff, management, and support staff. The Company contracts with a select number of approved regional, national and international suppliers to enhance claim capabilities and business resiliency.
In 2024, many personal lines insurance companies, including The Hartford, increased marketing spend in order to increase new business production after returning to new business rate adequacy. Personal Insurance is written by insurance companies of varying sizes that compete principally on the basis of price, product, service, including claims handling, the insurer's ratings and brand recognition.
In 2025, many personal lines insurance companies, including The Hartford, increased marketing spend in order to increase new business production after returning to new business rate adequacy. Personal Insurance is written by insurance companies of varying sizes that compete principally on the basis of price, product, service, including claims handling, the insurer's ratings and brand recognition.
References in this report to our website address are provided only as a convenience and do not constitute, and should not be viewed as, an incorporation by reference of the information contained on, or available through, the website. Therefore, such information should not be considered part of this report. 20 | Table of Contents Part I - Item 1A.
References in this report to our website address are provided only as a convenience and do not constitute, and should not be viewed as, an incorporation by reference of the information contained on, or available through, the website. Therefore, such information should not be considered part of this report. 20 Table of Contents Part I - Item 1A. Risk Factors
Total Property & Casualty Reserves as of December 31, 2024 Further discussion of The Hartford’s property and casualty insurance product reserves, including run-off asbestos and environmental claims reserves within P&C Other Operations, may be found in Part II, Item 7, MD&A — Critical Accounting Estimates — Property and Casualty Insurance Product Reserves, Net of Reinsurance.
Total Property & Casualty Reserves as of December 31, 2025 Further discussion of The Hartford’s property and casualty insurance product reserves, including run-off asbestos and environmental claims reserves within P&C Other Operations, may be found in Part II, Item 7, MD&A — Critical Accounting Estimates — Property and Casualty Insurance Product Reserves, Net of Reinsurance.
Business Principal Products and Services Mutual Funds Includes approximately 60 actively managed mutual funds across a variety of asset classes including domestic and international equity, fixed income, and multi-strategy investments, principally sub-advised by two unaffiliated institutional asset management firms. Exchange-traded funds Exchange-traded funds ("ETF") include actively managed ETFs and multifactor ETFs.
Business Principal Products and Services Mutual Funds Includes approximately 60 actively managed mutual funds across a variety of asset classes including domestic and international equity, fixed income, and multi-strategy investments, principally sub-advised by two unaffiliated institutional asset management firms. Exchange-traded funds Includes actively managed ETFs and multifactor ETFs.
The Company also writes coverage in the excess and surplus lines market, primarily within global specialty, which is characterized by the absence of regulation related to rate and form and allows for more pricing and coverage flexibility to write certain classes of business.
The Company also writes coverage in the excess and surplus lines market, within global specialty and small business, which is characterized by the absence of regulation related to rate and form and allows for more pricing and coverage flexibility to write certain classes of business.
Through its three lines of business, small business (formerly "small commercial"), middle & large business (formerly "middle & large commercial"), and global specialty, Business Insurance offers its products and services to businesses in the United States ("U.S.") and internationally.
Through its three lines of business, small business, middle & large business, and global specialty, Business Insurance offers its products and services to businesses in the United States ("U.S.") and internationally.
Other programs written within middle & large business are retrospectively-rated where the ultimate premium collected from the insured is adjusted based on how incurred losses for the policy year develop over time, subject to a minimum and maximum premium.
Other programs written within middle & large business are loss sensitive, or retrospectively-rated where the ultimate premium collected from the insured is adjusted based on how incurred losses for the policy year develop over time, subject to a minimum and maximum premium.
Statutory paid family leave ("PFL") and paid family and medical leave ("PFML") programs are a source of growth as the Company offers fully insured coverage or administers self-insured coverage for some of these programs. As of year-end 2024, thirteen states and the District of Columbia have enacted mandated PFL or PFML programs.
Statutory paid family and medical leave ("PFML") programs are a source of growth as the Company offers fully insured coverage or administers self-insured coverage for some of these programs. As of year-end 2025, thirteen states and the District of Columbia have enacted mandated PFML programs.
Patents are of varying duration depending on filing date, and will typically expire at the end of their natural term. HUMAN CAPITAL RESOURCES The Hartford has approximately 19,100 employees as of December 31, 2024. Management, including the CEO and Chief Human Resources Officer ("CHRO"), establishes the hiring and compensation practices for our Company.
Patents are of varying duration depending on filing date, and will typically expire at the end of their natural term. Human Capital Resources The Hartford has approximately 19,200 employees as of December 31, 2025. Management, including the CEO and Chief Human Resources Officer ("CHRO"), establishes the hiring and compensation practices for our Company.
Within this competitive environment, The Hartford is continuing to invest in its underwriting systems and capabilities, including investing in speed to market solutions for the lower end of middle market, enhancing its digital experience, leveraging its sales and underwriting talent and expanding its use of data analytics, artificial intelligence capabilities and third party data to make risk selection and pricing decisions as the firm pursues responsible growth strategies to deliver target returns.
Within this competitive environment, The Hartford is continuing to invest in its underwriting systems and capabilities, including investing in speed to market solutions, enhancing its digital experience, leveraging its sales and underwriting talent and expanding its use of data analytics, artificial intelligence capabilities and third party data to make expert risk selection and pricing decisions as the firm pursues responsible growth strategies to deliver target returns.
Business | EMPLOYEE BENEFITS 2024 Premiums and Other Considerations of $6,615 Principal Products and Services Group Life Typically is term life insurance provided in the form of a yearly renewable policy. Other life coverages in this category include accidental loss of life and severe injury benefits and business travel accident insurance.
Employee Benefits 2025 Premiums and Other Considerations of $6,645 Principal Products and Services Group Life Typically is term life insurance provided in the form of a yearly renewable policy. Other life coverages in this category include accidental loss of life and severe injury benefits and business travel accident insurance.
Employee Benefits reserves include unpaid loss and loss adjustments expenses for long-term disability ("LTD"), group life and other lines of business as well as reserves for other policyholder funds and reserves for future policy benefits.
Employee Benefits reserves include unpaid loss and loss adjustments expenses for LTD, group life and other lines of business as well as reserves for other policyholder funds and reserves for future policy benefits.
To keep pace with the evolving needs of our customers and the expectations of employees and external candidates, we focus on a broad array of actions, including: • Providing career growth and development opportunities aligned to our strategies through our strategic workforce plans, executive, professional and front-line recruitment, internal mobility and job progression, and retention strategies; • Offering extensive learning and development opportunities to sustain the skills needed for the roles we have today and those we anticipate in the future; and • Holding leaders accountable for their progress against human capital goals that include development, engagement, mobility, succession, and retention.
To keep pace with the evolving needs of our customers and the expectations of employees and external candidates, we focus on a broad array of actions, including: • Establishing comprehensive hiring strategies across executive, professional, and front-line roles to fill talent needs; • Providing career growth and development opportunities aligned to our succession and strategic workforce plans through internal mobility, job progressions and learning programs; • Offering extensive learning and development opportunities to sustain the skills needed for the roles we have today and those we anticipate in the future; and • Holding leaders accountable for their progress against human capital goals that include development, engagement, mobility, succession, and retention.
For a discussion of coverages provided under policies written with exposure to A&E prior to 1986 reported within the P&C Other Operations segment (“Run-off A&E”), run-off assumed reinsurance and all other non-A&E exposures, see Part II, Item 7, MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves, Net of Reinsurance. 11 | Table of Contents Index to Business Part I - Item 1.
For a discussion of coverages provided under policies written with exposure to A&E prior to 1986 reported within the P&C Other Operations segment (“Run-off A&E”), run-off assumed reinsurance and all other non-A&E exposures, see Part II, Item 7, MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves, Net of Reinsurance.
In addition to the day-to-day support and counseling they provide to our leaders, managers and employees, the Human Resources team also monitors key indicators to keep a pulse on trends across our employee population including strategic workforce planning, employee engagement, employee relations matters, career mobility, talent attraction, retention, and development.
In addition to the day-to-day support and counseling they provide to our leaders, managers and employees, the Human Resources team also monitors key indicators and devises talent strategies based on trends across our employee population including strategic workforce planning, employee engagement, employee relations matters, career mobility, talent attraction, retention, and development.
In addition, the Board’s Compensation and Management Development Committee (“Compensation Committee”) is responsible for reviewing performance and approving compensation paid to senior executives, and, among other things, the oversight of succession and continuity planning for senior executive roles, setting the Company's executive compensation policy and administering the Company's Clawback Policy for senior executives.
In addition, the Compensation Committee is responsible for reviewing performance and approving compensation paid to senior executives, and, among other things, the oversight of succession and continuity planning for senior executive roles, setting the Company's executive compensation policy and administering the Company's Clawback Policy for senior executives.
We offer our voluntary products including critical illness, accident and hospital indemnity coverage to employees through our Employee Choice Benefits programs. The Company's enhanced enrollment and marketing tools, such as My Tomorrow©, are providing additional opportunities to educate individual participants about supplementary benefits and deepen their knowledge about product selection.
We offer our voluntary products including critical illness, accident and hospital indemnity coverage to employees through our Employee Choice Benefits programs. The Company's enhanced enrollment and marketing tools, such as digital decision support and personalized recommendations, are providing additional opportunities to educate individual participants about supplementary benefits and deepen their knowledge about product selection.
As of December 31, 2024 and 2023, the fair value of HIMCO’s total assets under management was approximately $112.0 billion and $108.5 billion, respectively, including $50.9 billion and $50.3 billion, respectively, that were held in HIMCO managed third party accounts and $3.6 billion and $3.8 billion, respectively, that support the Company's pension and other postretirement benefit plans.
As of December 31, 2025 and 2024, the fair value of HIMCO’s total assets under management was approximately $121.9 billion and $112.0 billion, respectively, including $55.6 billion and $50.9 billion, respectively, that were held in HIMCO managed third party accounts and $3.5 billion and $3.6 billion, respectively, that support the Company's pension and other postretirement plans.
Fidelity bonds may include ERISA bonds related to the handling of retirement plan assets and bonds protecting against employee theft or fraud. The Company also provides credit and political risk insurance ("CPRI") offered to clients with global operations.
Contract surety bonds may include payment and performance bonds for contractors. Fidelity bonds may include ERISA bonds related to the handling of retirement plan assets and bonds protecting against employee theft or fraud. The Company also provides credit and political risk insurance ("CPRI") offered to clients with global operations.
The Hartford's Investment Portfolio of $59.2 billion as of December 31, 2024 Management of The Hartford's Investment Portfolio HIMCO manages the Company's investment portfolios to maximize economic value, ensure sufficient funding of the Company's liabilities, and achieve enterprise financial objectives while remaining within acceptable risk tolerances.
The Hartford's Investment Portfolio of $64.0 billion as of December 31, 2025 Management of The Hartford's Investment Portfolio HIMCO manages the Company's investment portfolios to maximize economic value, ensure sufficient funding of the Company's liabilities, and achieve enterprise financial objectives while remaining within acceptable risk tolerances.
The majority of Business Insurance written premium is generated by small business and middle market lines, which provide coverage options and customized pricing based on the policyholder’s individual risk characteristics.
The majority of Business Insurance written premium is generated by small business and middle market lines (the portion of middle & large business excluding the loss-sensitive book), which provide coverage options and customized pricing based on the policyholder’s individual risk characteristics.
The Company seeks to drive greater efficiency, shorten the quoting process and improve the customer’s experience through expanded use of digital and artificial intelligence capabilities. 9 | Table of Contents Index to Business Part I - Item 1. Business Global specialty also writes business in the London market via its Lloyd’s syndicate platform.
The Company seeks to drive greater efficiency, shorten the quoting process and improve the customer’s experience through expanded use of digital and artificial intelligence capabilities. Global specialty also writes business in the London market via its Lloyd’s syndicate platform.
For entry-level roles in the organization, we recruit at colleges and universities, and offer a range of training and development programs, including: • The Hartford’s Leadership Development Program, which provides curriculum to enhance leadership skill sets for all participants – from first-time leaders through our executive ranks; • The Hartford Early Career Leadership Program, which offers programs in Actuarial, Finance, Underwriting, Claims & Operations and Technology through rotational development to gain a breadth of experiences; • The Hartford’s Apprenticeship Program, which prepares students for careers in insurance; and • Our Hart-Academy Tech training program for employees introduced HartCloud Academy in 2024 offering an immersive training program for our mid-career engineers to advance their proficiency in cloud technologies.
For entry-level roles in the organization, we recruit at colleges and universities, and offer a range of training and development programs, including: • The Hartford’s Leadership Development Program, which provides curriculum to enhance leadership skill sets for all participants – from first-time leaders through our executive ranks; • The Hartford Early Career Leadership Program, which offers programs in Actuarial, Finance, Underwriting, Claims, Operations, Technology, Data and Analytics through rotational development to gain a breadth of experiences; • The Hartford’s Apprenticeship Program, which prepares students for careers in insurance; • HartCloud Academy which offers an immersive training program for our mid-career engineers to advance their proficiency in cloud technologies; 18 Table of Contents Index to Business Part I - Item 1.
Carriers that can quote business in an automated way have a competitive advantage by shortening the time from quoting to issuance. Through its ICON quoting tool, The Hartford quotes over 75% of its Spectrum package business and workers’ compensation new business policies without human intervention.
Carriers that can quote business in an automated way have a competitive advantage by shortening the time from quoting to issuance. Through its industry-leading ICON quoting tool, The Hartford quotes over 75% of new business policies from admitted markets without human intervention.
Business RESERVES Total Reserves as of December 31, 2024 [1] [1] Includes reserves for future policy benefits and other policyholder funds and benefits payable of $448 and $614, respectively, of which $290 and $401, respectively, relate to the Employee Benefits segment with the remainder related to run-off structured settlement and terminal funding agreements within Corporate.
Business Reserves Total Reserves as of December 31, 2025 [1] [1] Includes reserves for future policy benefits and other policyholder funds and benefits payable of $444 and $612, respectively, of which $291 and $409, respectively, relate to the Employee Benefits segment with the remainder related to run-off structured settlement and terminal funding agreements within Corporate.
Currently in the states where the Prevail product has rolled out, The Hartford offers its telematics program, TrueLane, which uses a mobile app solution to offer discounts for good driving behavior based on such attributes as braking, speed, distracted driving, and acceleration.
In the states where the Prevail product has been rolled out, The Hartford offers its telematics program, TrueLane, which uses a mobile app solution to offer individualized pricing for policyholders based on their personal driving behavior including such attributes as braking, speed, distracted driving, and acceleration.
In addition to offering standard commercial lines products, including workers' compensation, property, general liability and commercial automobile products, middle & large business includes program business which provides tailored programs, primarily to customers with common risk characteristics. For national accounts, a significant portion of the business is written through large deductible programs.
Middle & large business offers standard commercial lines products, including workers' compensation, property, general liability, commercial automobile and, umbrella and excess products, coupled with global specialty offerings. Middle & large business includes programs business which provides tailored programs, primarily to customers with common risk characteristics. For national accounts, a significant portion of the business is written through large deductible programs.
Geographic Distribution of Earned Premium (% of total) Location Business Insurance Personal Insurance Employee Benefits Total California 8 % 2 % 2 % 12 % New York 6 % 1 % 3 % 10 % Texas 5 % 2 % 2 % 9 % Florida 3 % 1 % 2 % 6 % All other [1] 35 % 9 % 19 % 63 % Total 57 % 15 % 28 % 100 % [1] No other single state or country accounted for 5% or more of the Company's consolidated earned premium in 2024.
Geographic Distribution of Earned Premium (% of total) Location Business Insurance Personal Insurance Employee Benefits Total California 9 % 1 % 2 % 12 % New York 5 % 1 % 3 % 9 % Texas 5 % 2 % 2 % 9 % Florida 3 % 1 % 1 % 5 % All other [1] 36 % 10 % 19 % 65 % Total 58 % 15 % 27 % 100 % [1] No other single state or country accounted for 5% or more of the Company's consolidated earned premium in 2025.
We have nine Employee Resource Groups (“ERG’s”) that are voluntary participation groups led by employees, open to all and dedicated to enabling people to share their unique perspectives and experience. These groups focus on the development and success of our employees and our business results through education, networking, mentorship and volunteer opportunities.
We have nine Employee Resource Groups (“ERG’s”) that are voluntary participation groups led by employees, open to all and dedicated to enabling people to connect and collaborate for professional and business success. These groups focus on advancing the development of our employees and strengthening our business results through education, networking, mentorship and volunteer opportunities.
The Company sells diverse and innovative products through multiple distribution channels to individuals and businesses and is considered a leading property and casualty and employee group benefits insurer. The Hartford Stag logo is one of the most recognized symbols in the financial services industry.
The Company sells diverse and innovative products through multiple distribution channels to individuals and businesses and is considered a leading property & casualty and employee group benefits insurer. The Hartford Stag logo is a widely recognized symbol in the insurance industry.
The segment also competes directly with lower cost passive investment strategies, which continue taking share from active managers. | CORPORATE The Company includes in the Corporate category capital raising activities (including equity financing, debt financing and related interest expense), purchase accounting adjustments related to goodwill, reserves for run-off structured settlement and terminal funding agreement liabilities, restructuring costs, transaction expenses incurred in connection with an acquisition, certain M&A costs, and other expenses not allocated to the reportable segments.
Corporate The Company includes in the Corporate category capital raising activities (including equity financing, debt financing and related interest expense), purchase accounting adjustments related to goodwill, reserves for run-off structured settlement and terminal funding agreement liabilities, restructuring costs, transaction expenses incurred in connection with an acquisition, certain M&A costs, and other expenses not allocated to the reportable segments.
Also, automobile technology advancements, including lane departure warnings, backup cameras, automatic braking and active collision alerts, continue to be deployed and are expected to improve driver safety and reduce the likelihood of vehicle collisions. However, these features include expensive parts, contributing to increasing average claim severity. In 2024, inflation continued to impact the industry.
Also, automobile technology advancements, including lane departure warnings, backup cameras, automatic braking and active collision alerts, continue to be deployed and are expected to improve driver safety and reduce the likelihood of vehicle collisions. However, these features include expensive parts, contributing to increasing average claim severity. 11 Table of Contents Index to Business Part I - Item 1.
Total Employee Benefits Reserves as of December 31, 2024 [1] [1]Includes short duration contract reserves of $183 for short-term disability and $39 of supplemental health as well as reserves for future policy benefits that include $204 of paid up life reserves and policy reserves on life policies, $67 of reserves for conversions to individual life and $19 of other reserves.
Total Employee Benefits Reserves as of December 31, 2025 [1] [1]Includes short duration contract reserves of $169 for short-term disability and $45 of supplemental health as well as reserves for future policy benefits that include $203 of paid up life reserves and policy reserves on life policies, $68 of reserves for conversions to individual life and $20 of other reserves.
Within small business, both property and general liability coverages are offered under a single package policy, marketed under the Spectrum name. Small business also provides excess and surplus lines coverage to small businesses including umbrella, general liability, property and other coverages.
Primary coverages provided include workers' compensation, property, general liability and commercial automobile, with both property and general liability coverages offered as a single package policy, marketed under the Spectrum name. Small business also provides excess and surplus lines coverage to small businesses including property, general liability, umbrella and other coverages.
As the sole corporate member of Lloyd's Syndicate 1221, the Company has the exclusive right to underwrite business up to an approved level of premium in the Lloyd’s of London ("Lloyd's") market. In the United States, independent agents, brokers and wholesalers are consolidating.
As the sole corporate member of Lloyd's Syndicate 1221, the Company has the exclusive right to underwrite business up to an approved level of premium in the Lloyd’s of London ("Lloyd's") market. In the United States, independent agents, brokers and wholesalers are consolidating. While acquisition activity has slowed, we continue to expect large deals by well positioned companies.
Employee Benefits generally offers term insurance policies, allowing for the adjustment of rates or policy terms at renewal in order to minimize the adverse effect of market trends, loss costs, changes in interest rates and other factors. Policies are typically sold with one, two or three-year rate guarantees depending upon the product and market segment.
Business order to minimize the adverse effect of market trends, loss costs, changes in interest rates and other factors. Policies are typically sold with one, two or three-year rate guarantees depending upon the product and market segment.
REINSURANCE For discussion of reinsurance, see Part II, Item 7, MD&A — Enterprise Risk Management and Note 8 - Reinsurance of Notes to Consolidated Financial Statements. 16 | Table of Contents Index to Business Part I - Item 1. Business INVESTMENT OPERATIONS Hartford Investment Management Company (“HIMCO”) is an SEC registered investment advisor and manages the Company's investment operations.
Reinsurance For discussion of reinsurance, see Part II, Item 7, MD&A — Enterprise Risk Management and Note 8 - Reinsurance of Notes to Consolidated Financial Statements. 16 Table of Contents Index to Business Part I - Item 1.
In addition, a tight labor market and inflation on material prices increased the cost to repair homes. | P&C OTHER OPERATIONS Property & Casualty Other Operations includes certain property and casualty operations managed by the Company that have discontinued writing new business and includes substantially all of the Company's pre-1986 asbestos and environmental ("A&E") exposures.
Business P&C Other Operations Property & Casualty Other Operations includes certain property and casualty operations managed by the Company that have discontinued writing new business and includes substantially all of the Company's pre-1986 asbestos and environmental ("A&E") exposures.
The Hartford Funds segment competes with a large number of asset management firms and other financial institutions and differentiates itself through its global sub-advisors, product breadth, competitive fees and strong distribution.
The Hartford Funds segment competes with a large number of asset management firms and other financial institutions and differentiates itself through its global sub-advisors, product breadth, competitive fees and strong distribution. The segment also competes directly with lower cost passive investment strategies, which continue taking share from active managers.
In addition to offering insurance products, global specialty also offers assumed reinsurance for various risks including property, liability, surety, marine, credit and political, and agricultural primarily in Europe and the America’s.
Global specialty also offers various products internationally as a sole corporate member of Lloyd’s Syndicate 1221 ("Lloyd's Syndicate"). In addition, global specialty also offers assumed reinsurance for various risks including property, liability, surety, marine, credit and political, and agricultural, primarily in Europe and the America’s.
For further discussion, see Part II, Item 7, MD&A - Capital Resources and Liquidity. | PERSONAL INSURANCE 2024 Earned Premiums of $3,453 by Line of Business 2024 Earned Premiums of $3,453 by Product Principal Products and Services Personal Automobile Covers damage to an individual insured’s own vehicle due to collision or other perils and is referred to as automobile physical damage.
Personal Insurance 2025 Earned Premiums of $3,725 by Line of Business 2025 Earned Premiums of $3,725 by Product Principal Products and Services Personal Automobile Covers damage to an individual insured’s own vehicle due to collision or other perils and is referred to as automobile physical damage.
The use of comparative rater tools increases price competition. Insurers that are able to capitalize on their brand and reputation, differentiate their products and deliver strong customer service are more likely to be successful in this market.
A large majority of agents have been using “comparative rater” tools that allow the agent to compare premium quotes among several insurance companies. The use of comparative rater tools increases price competition. Insurers that are able to capitalize on their brand and reputation, differentiate their products and deliver strong customer service are more likely to be successful in this market.
In product development and related areas such as claims and risk engineering, the Company has expanded its capabilities in industry verticals, such as energy, construction, media arts & entertainment, technology and life sciences. Global Specialty Global specialty competes against multi-national insurance and reinsurance companies, in the U.S and London markets.
In product development and related areas such as claims and risk engineering, the Company has expanded its capabilities in industry verticals, such as energy, construction, media arts & entertainment, technology and life science.
For further discussion of the reportable segments, including financial disclosures of revenues by product line, net income (loss), and assets for each reportable segment, see Note 3 - Segment Information of Notes to Consolidated Financial Statements. 2024 Revenues of $26,535 by Segment/Category [1]Includes Revenue of $70 for Property & Casualty Other Operations and $147 for Corporate. | BUSINESS INSURANCE 2024 Earned Premiums of $12,721 by Line of Business 2024 Earned Premiums of $12,721 by Product 7 | Table of Contents Index to Business Part I - Item 1.
For further discussion of the reportable segments, including financial disclosures of revenues by product line, significant segment expenses, net income (loss), and assets for each reportable segment, see Note 3 - Segment Information of Notes to Consolidated Financial Statements. 2025 Revenues of $28,368 by Segment/Category [1] Includes Revenue of $73 for Property & Casualty Other Operations and $147 for the Corporate category.
We persistently work to improve the employee experience in support of our continuing strategic objective to attract, retain and develop the best talent in the industry.
As of December 31, 2025, over 60% of employees were members of at least one ERG. We persistently work to improve the employee experience in support of our continuing strategic objective to attract, retain and develop the best talent in the industry.
The pricing of middle market and national accounts is prone to significant volatility over time due to changes in individual account characteristics and exposure, as well as legislative and macro-economic forces.
In addition, some larger brokers are now becoming competitors through acquisition of managing general agents or managing general underwriters. The pricing of middle market and national accounts is prone to volatility over time due to changes in individual account characteristics and exposure, as well as legislative and macro-economic forces.
Business REPORTABLE SEGMENTS AND CORPORATE The Hartford conducts business principally in five reportable segments, including Business Insurance (formerly "Commercial Lines"), Personal Insurance (formerly "Personal Lines"), Property & Casualty Other Operations, Employee Benefits (formerly "Group Benefits") and Hartford Funds, as well as a Corporate category.
Business Reportable Segments and Corporate The Hartford conducts business principally in five reportable segments, including Business Insurance, Personal Insurance, Property & Casualty Other Operations, Employee Benefits and Hartford Funds, as well as a Corporate category. The following discussion describes the principal products and services, marketing and distribution, and competition of The Hartford's reportable segments.
Our extensive benefits include: • Medical plan options; • Dental and vision coverage options; • 401(k) plan with company non-elective and matching contributions; • Paid time off ("PTO") with at least 25 days of annual eligibility to start; • Paid holidays; • Flexible work schedules, including hybrid or remote work arrangements; • Tuition reimbursement; • Student loan repayment assistance; • Family medical leave; • Paid parental leave; • Travel reimbursement to access medical services in other locations as needed; • Family building support, including adoption support program; • Organ and bone marrow donation leave policy; and • Employee assistance program.
Our extensive benefits include: • Medical plan options; • Dental and vision coverage options; • 401(k) plan with company non-elective and matching contributions; • Paid time off ("PTO") with at least 25 days annually to start; • Paid holidays; • Flexible work schedules, including hybrid or remote work arrangements; • Tuition reimbursement; • Student loan repayment assistance; • Family medical leave; • Paid parental leave; 19 Table of Contents Index to Business Part I - Item 1.
Also within middle & large business, the Company writes captive programs business, which provides tailored programs to those seeking a loss sensitive solution where premiums are adjustable based on loss experience. In addition, through business partners, middle & large business offers business insurance coverages to exporters and other U.S. companies with a physical presence overseas.
Also within middle & large business, the Company writes captive business, which provides tailored programs to those seeking a loss sensitive solution where premiums are adjustable based on loss experience.
Commercial surety includes bonds that insure non-performance by contractors, license and permit bonds to help meet government-mandated requirements and probate and judicial bonds for fiduciaries and civil court proceedings. Contract surety bonds may include payment and performance bonds for contractors.
Coverage may also provide employment practices insurance relating to allegations of wrongful termination and discrimination. Bond Encompasses fidelity and surety insurance, including commercial surety, contract surety and fidelity bonds. Commercial surety includes bonds that insure non-performance by contractors, license and permit bonds to help meet government-mandated requirements and probate and judicial bonds for fiduciaries and civil court proceedings.
Middle & large business provides insurance coverages to medium-sized and national accounts businesses, which are companies whose payroll, revenue and property values exceed the small business definition.
Middle & large business provides insurance coverage to a broad spectrum of companies, from mid-sized firms to large national accounts. These are businesses whose payroll, revenue and property values exceed the small business threshold.
Customers served by the global specialty marketplace expect tailored policy language for their unique risks and, increasingly, are looking for a single insurance carrier to meet all their coverage needs.
Excess & surplus growth has outpaced the overall market in recent years, though pricing conditions may vary by line as competition increases. Customers served by the global specialty marketplace expect tailored policy language for their unique risks and, increasingly, are looking for a single insurance carrier to meet all their coverage needs.
Commercial Property Covers the building a business owns or leases as well as its personal property, including tools and equipment, inventory, and furniture. A commercial property insurance policy covers losses resulting from fire, wind, hail, earthquake, theft and other covered perils, including coverage for assets such as accounts receivable and valuable papers and records.
A commercial property insurance policy covers losses resulting from fire, wind, hail, earthquake, theft and other covered perils, including coverage for assets such as accounts receivable and valuable papers and records. Commercial property may include specialized equipment insurance, which provides coverage for loss or damage resulting from the mechanical breakdown of boilers and machinery.
Small business provides coverages for small businesses, which the Company generally considers to be businesses with an annual payroll under $20, revenues under $50 and property values less than $20 per location. Primary coverages provided include workers' compensation, property, general liability and commercial automobile.
Small business provides coverages for small businesses, which the Company generally considers to be businesses with an annual payroll under $20, revenues under $50 and property values less than $20 per location. The Company serves a broad range of small businesses, with an average written premium of less than $5 thousand per policy.
Personal Insurance works with carrier partners to provide risk protection options for AARP members with needs beyond the company’s current product offering. 10 | Table of Contents Index to Business Part I - Item 1. Business Marketing and Distribution Personal Insurance reaches diverse customers through multiple distribution channels, including direct-to-consumer and independent agents.
Among other things, overall rate levels, price segmentation, rating factors and underwriting procedures are being updated through the introduction of Prevail. Personal Insurance works with carrier partners to provide risk protection options for AARP members with needs beyond the company’s current product offering. Marketing and Distribution Personal Insurance reaches diverse customers through multiple distribution channels, including direct-to-consumer and independent agents.
As of December 31, 2024, total assets and total stockholders’ equity of The Hartford were $80.9 billion and $16.4 billion, respectively. ORGANIZATION The Hartford strives to maintain and enhance its position as a market leader within the insurance industry.
The Hartford is headquartered in Connecticut and its oldest subsidiary, Hartford Fire Insurance Company, dates back to 1810. As of December 31, 2025, total assets and total stockholders’ equity of The Hartford were $86.0 billion and $19.0 billion, respectively. Organization The Hartford strives to maintain and enhance its position as a market leader within the insurance industry.
In 2024, we achieved top quartile employee engagement and performance enablement scores, as measured by independent third party surveys, through continued focus on supporting our customers’ needs, leader effectiveness, collaboration, innovation and risk-taking, career growth, belonging and well-being.
In 2025, we achieved top quartile employee engagement and performance enablement scores, as measured by our enterprise engagement survey using independent third party benchmarks. These results were achieved in part due to continued focus on leader effectiveness, career growth, belonging and well-being.
Business Insurance generally consists of products written for small businesses and middle market companies as well as national and multi-national accounts, largely distributed through retail agents and brokers, wholesale agents and global and specialty insurance and reinsurance brokers.
Business Insurance generally consists of products written for businesses of all sizes, largely distributed through retail agents and brokers, wholesale agents and global and specialty insurance and reinsurance brokers, serving both admitted and non-admitted markets.
Workers’ compensation rates have been under downward pressure for the industry due to favorable loss cost trends in recent years. 8 | Table of Contents Index to Business Part I - Item 1. Business Global specialty provides a variety of customized insurance products, including property, general liability, marine, professional liability, and bond.
Workers’ compensation rates are based on loss experience and are informed by data submitted through the 8 Table of Contents Index to Business Part I - Item 1. Business National Council on Compensation Insurance ("NCCI"). Workers’ compensation rates have been under downward pressure for the industry due to favorable loss cost trends in recent years.
We are committed to ethical conduct and a bias-free workplace for all employees as we build, enhance and sustain a welcoming and supportive culture.
We believe that creating a work environment centered on trust enables us to attract, retain and leverage top talent to meet our business goals. We are committed to ethical conduct and a bias-free workplace for all employees as we build, enhance and sustain a welcoming and supportive culture.
The Hartford believes that fostering a culture of integrity and ethical behavior leads to better decisions, outcomes and experiences for both our customers and employees. We believe that creating a work environment centered on trust enables us to attract, retain and leverage top talent to meet our business goals.
We are committed to creating a work environment where employees are respected, inspired to perform at their best, and are recognized for their contributions. The Hartford believes that fostering a culture of integrity and ethical behavior leads to better decisions, outcomes and experiences for both our customers and employees.
The Board is periodically updated on key employee engagement measures (including employee survey results). The Board's Audit Committee receives an annual review of the Company's key employee relations measures.
The Board is periodically updated on key workforce metrics. The Board's Audit Committee receives an annual review of the Company's key employee relations measures. The Board’s Compensation and Management Development Committee (“Compensation Committee”) is regularly updated on employee engagement, turn-over, leader capabilities, future skill development and other workforce measures.
Workers’ compensation is provided under both guaranteed cost policies (coverage for a fixed premium) and loss sensitive policies where premiums are adjustable based on the loss experience of the employer. General Liability Covers a business in the event it is sued for causing harm to a person and/or damage to property.
Benefits paid under workers’ compensation policies may include reimbursement of medical care costs, replacement income, compensation for permanent injuries and benefits to survivors. Workers’ compensation is provided under both guaranteed cost policies (coverage for a fixed premium) and loss sensitive policies where premiums are adjustable based on the loss experience of the employer.
Alabama, Arkansas, Florida, Kentucky, New Hampshire, South Carolina, Tennessee, Texas, Vermont, and Virginia have also created opt-in paid family leave programs, and additional states are considering adopting PFL or PFML programs.
Alabama, Arkansas, Florida, Kentucky, New Hampshire, South Carolina, Tennessee, Texas, Vermont, and Virginia have also created opt-in paid family leave programs, and additional states are considering adopting PFML programs. Employee Benefits generally offers term insurance policies, allowing for the adjustment of rates or policy terms at renewal in 12 Table of Contents Index to Business Part I - Item 1.
Lines of business written by small business and middle & large business are subject to rate regulation and written pricing increases or decreases that are partly in response to loss cost trends. Workers’ compensation rates are based on loss experience and are informed by data submitted through the National Council on Compensation Insurance ("NCCI").
Additionally, through business partners, middle & large business offers business insurance coverages to exporters and other U.S. companies with a physical presence overseas. Lines of business written by small business and middle & large business are subject to rate regulation and written pricing increases or decreases that are partly in response to loss cost trends.
HIMCO provides customized investment strategies for The Hartford's investment portfolio, as well as for The Hartford's pension plan and institutional clients.
Business Investment Operations Hartford Investment Management Company (“HIMCO”) is an Securities and Exchange Commission ("SEC") registered investment advisor and manages the Company's investment operations. HIMCO provides customized investment strategies for The Hartford's investment portfolio, as well as for The Hartford's pension plan and institutional clients.
The Company also offers a medical advocacy program and well-being programs, weight management, fitness reimbursement and more. 19 | Table of Contents Index to Business Part I - Item 1. Business AVAILABLE INFORMATION The Company’s internet address is https://www.thehartford.com.
Business • Travel reimbursement to access medical services in other locations as needed; • Family building support, including adoption support program; • Organ and bone marrow donation leave policy; and • Employee assistance program. The Company also offers a medical advocacy program and well-being programs, weight management, fitness reimbursement and more. Available Information The Company’s internet address is https://www.thehartford.com.
General liability insurance covers third-party claims arising from accidents occurring on the insured’s premises or arising out of their operations. General liability insurance may also cover losses arising from product liability. Marine Encompasses various ocean and inland marine coverages including cargo, craft, hull, specie, transport and liability, among others. Package Business Covers both commercial property and general liability damages.
General Liability Covers a business in the event it is sued for causing harm to a person and/or damage to property. General liability insurance covers third-party claims arising from accidents occurring on the insured’s premises or arising out of their operations. General liability insurance may also cover losses arising from product liability.
In addition to providing group disability, leave management and life insurance, we offer integrated claim, leave and benefits administration with The Hartford's Ability Advantage platform. | HARTFORD FUNDS Hartford Funds Segment Assets Under Management ("AUM") of $139,598 as of December 31, 2024 Mutual Fund AUM of $123,571 as of December 31, 2024 13 | Table of Contents Index to Business Part I - Item 1.
In addition to providing group disability, leave management and life insurance, we offer integrated claim, leave and benefits administration with The Hartford's Ability Advantage platform.
The market for employee benefits continues to grow as employees and employers continue to demand employee benefits for addressing mental health, wellness, and caregiving costs. In order to differentiate itself, Employee Benefits uses its risk management expertise and economies of scale to derive a competitive advantage.
Growth is moderating as employment and wage growth slow, while opportunities continue in the small to mid-size segment and in employee-paid supplemental health offerings as employers seek cost relief. In order to differentiate itself, Employee Benefits uses its risk management expertise and economies of scale to derive a competitive advantage.
Business sold to AARP members, either direct or through independent agents, amounted to earned premiums of $3.2 billion, $2.9 billion and $2.7 billion in 2024, 2023 and 2022, respectively. The AARP relationship provides The Company with a competitive advantage to capitalize on the continued growth of the over age 50 population.
Business sold to AARP members, either direct or through independent 10 Table of Contents Index to Business Part I - Item 1. Business agents, amounted to earned premiums of $3.4 billion, $3.2 billion and $2.9 billion in 2025, 2024 and 2023, respectively.
Technology providers, including human resources platform vendors, are taking an increasingly prominent role in influencing customer decisions that also influence selection of the employee benefits insurance provider. 12 | Table of Contents Index to Business Part I - Item 1. Business Competition Employee Benefits competes with numerous insurance companies and financial intermediaries marketing insurance products.
Technology providers, including human resources platform vendors, are taking an increasingly prominent role in influencing customer decisions that also influence selection of the employee benefits insurance provider. Carriers across the industry are increasing automated interfaces and digital workflows to meet distributor and employer expectations and to improve service and claim experiences.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors unrealized losses on equity securities held at fair value, reduce net investment income in future periods from our non-fixed income investment portfolio, including from limited partnerships and other alternative investments, or lower earnings from Hartford Funds where fee income is earned based upon the fair value of the assets under management.
Biggest changeIn addition, the value of credit derivatives under which the Company assumes exposure or purchases protection are impacted by changes in credit spreads, with losses occurring when credit spreads widen for assumed exposure or when credit spreads tighten if credit protection has been purchased. • Equity Markets Risk - A decline in equity markets may result in net realized losses on sales of equity securities, unrealized losses on equity securities held at fair value, reduce net investment income in future periods from our non-fixed income investment portfolio, including from limited partnerships and other alternative investments, or lower earnings from Hartford Funds where fee income is earned based upon the fair value of the assets under management.
Our reserves for future policy benefits are sensitive to changing interest rate conditions. U.S. Generally Accepted Accounting Principles ("GAAP") guidance requires that we update reserves for future policy benefits for changes in discount rates quarterly which could cause volatility in our stockholders' equity.
Our reserves for future policy benefits are sensitive to changing interest rate conditions. U.S. Generally Accepted Accounting Principles ("U.S. GAAP") guidance requires that we update reserves for future policy benefits for changes in discount rates quarterly which could cause volatility in our stockholders' equity.
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.
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 U. S. GAAP capital held by the Company in determining the Company's financial strength and credit ratings.
Our ability to declare and pay dividends is subject to limitations. The payment of future dividends on our capital stock is subject to the discretion of our Board of Directors, which considers, among other factors, our operating results, overall financial condition, credit-risk considerations and capital requirements, as well as general business and market conditions.
Risk Factors Our ability to declare and pay dividends is subject to limitations. The payment of future dividends on our capital stock is subject to the discretion of our Board of Directors, which considers, among other factors, our operating results, overall financial condition, credit-risk considerations and capital requirements, as well as general business and market conditions.
For further discussion on dividends from insurance subsidiaries, see Part II, Item 7, MD&A - Capital Resources & Liquidity. Risks Relating to Estimates, Assumptions and Valuations Actual results could materially differ from the analytical models we use to assist our decision making in key areas such as underwriting, pricing, capital management, reserving, investments, reinsurance and catastrophe risks.
For further discussion on dividends from insurance subsidiaries, see Part II, Item 7, MD&A - Capital Resources and Liquidity. Risks Relating to Estimates, Assumptions and Valuations Actual results could materially differ from the analytical models we use to assist our decision making in key areas such as underwriting, pricing, capital management, reserving, investments, reinsurance and catastrophe risks.
Social, economic, political and environmental issues, including rising income inequality, reduction and further delays in government social programs such as Social Security Disability, attorney representation rates, legal system abuse, climate change, prescription drug use and addiction, exposures to new substances or those substances previously considered to be safe and found to have latent exposure, along with the use of social media to proliferate messaging around such issues, has expanded the theories for reporting claims, which may increase our claims administration and/or litigation costs.
Social, economic, political and environmental issues, including rising income inequality, reduction and further delays in government social programs such as Social Security Disability, attorney representation rates, legal system abuse, climate change, prescription drug use and addiction, exposures to new substances or those substances previously considered to be safe and found to have latent exposure, along with the use of social media to proliferate messaging around such issues, have expanded the theories for reporting claims, which may increase our claims administration and/or litigation costs.
Regulatory and Legal Risks Regulatory and legislative developments could have a material adverse impact on our business, financial condition, results of operations or liquidity. We are subject to extensive laws, regulations and executive orders that are complex, subject to change and often conflict in their approach or intended outcomes.
Risk Factors Regulatory and Legal Risks Regulatory and legislative developments could have a material adverse impact on our business, financial condition, results of operations or liquidity. We are subject to extensive laws, regulations and executive orders that are complex, subject to change and often conflict in their approach or intended outcomes.
Increased use of advanced analytics (e.g., artificial intelligence) and automation in the workplace could potentially affect the demand for workers' compensation insurance products over time. In addition, our business may be disrupted due to failures of accelerated technological changes, including our automation of minimally complex tasks, which may adversely impact our business and results of operations.
Increased use of advanced analytics (e.g., artificial intelligence) and automation in the workplace could potentially affect the demand for workers' compensation and employee benefits products over time. In addition, our business may be disrupted due to failures of accelerated technological changes, including our automation of minimally complex tasks, which may adversely impact our business and results of operations.
For example, federal and state legislative efforts on Paid Family and Medical Leave, data privacy and cyber security, risk-based pricing, and sustainability practices could have unanticipated consequences for the Company and its businesses.
For example, federal and state legislative efforts on Paid Family and Medical Leave, artificial intelligence, data privacy and cyber security, risk-based pricing, and sustainability practices could have unanticipated consequences for the Company and its businesses.
Our information technology and telecommunications systems, in turn, interface with and rely upon third-party systems.
Our information technology ("IT") and telecommunications systems, in turn, interface with and rely upon third-party systems.
The Company’s federal and state tax returns reflect certain items such as tax-exempt bond interest, tax credits, and insurance reserve deductions. There is an increasing risk that, in the context of tax reform in the U.S., federal and/or state tax legislation could modify or eliminate these items, impacting the Company, its investments, investment strategies, and/or its policyholders.
The Company’s federal and state tax returns reflect certain items such as tax-exempt bond interest, tax credits, and insurance reserve deductions. There is a risk that, in the context of tax reform in the U.S., federal and/or state tax legislation could modify or eliminate these items, impacting the Company, its investments, investment strategies, and/or its policyholders.
Changes in accounting principles and financial reporting requirements could adversely affect our results of operations or financial condition. As an SEC registrant, we are currently required to prepare our financial statements in accordance with U.S. GAAP, as promulgated by the Financial Accounting Standards Board.
Risk Factors Changes in accounting principles and financial reporting requirements could adversely affect our results of operations or financial condition. As an SEC registrant, we are currently required to prepare our financial statements in accordance with U.S. GAAP, as promulgated by the Financial Accounting Standards Board ("FASB").
Lawmakers and regulators at the federal, state and international levels are enacting laws and promulgating regulations and guidance related to climate change, with conflicts from jurisdiction to jurisdiction possible, which may impose additional costs on the Company, or expose us to new or additional risks.
Lawmakers and regulators at the federal, state and international levels are enacting laws and promulgating regulations and guidance related to climate change, with conflicting policies from jurisdiction to jurisdiction possible, which may impose additional costs on the Company, or expose us to new or additional risks.
Pricing for our products is subject to our ability to adequately assess risks, estimate losses and comply with state and international insurance regulations.
Risk Factors Pricing for our products is subject to our ability to adequately assess risks, estimate losses and comply with state and international insurance regulations.
Any such intellectual property claims and any resulting litigation could result in significant expense and liability for damages, and in some circumstances we could be enjoined from providing certain products or services to our customers, or utilizing and benefiting from certain patent, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations or financial condition.
Any such intellectual property claims and any resulting litigation could result in significant expense and liability for damages, and in some circumstances we could be enjoined from providing certain products or services to our customers, or utilizing and benefiting from certain patent, copyrights, trademarks, trade secrets or licenses, or alternatively could be required to enter into costly licensing arrangements with third parties, all of which could have a material adverse effect on our business, results of operations or financial condition. 30 Table of Contents Part I - Item 1A.
For additional information on equity market sensitivity, see Part II, Item 7, MD&A - Enterprise Risk Management, Financial Risk- Equity Risk. • Interest Rate Risk - Increases in interest rates or persistently high interest rates could lead to recession or economic stagnation, which could lower the demand for many of the Company's products and may result in realized or unrealized losses on existing fixed income assets in the investment portfolio.
Risk Factors Part II, Item 7, MD&A - Enterprise Risk Management, Financial Risk - Equity Risk. • Interest Rate Risk - Increases in interest rates or persistently high interest rates could lead to recession or economic stagnation, which could lower the demand for many of the Company's products and may result in realized or unrealized losses on existing fixed income assets in the investment portfolio.
Risk Factors downgrade in the rating of our financial strength or of one of our principal insurance subsidiaries could affect our competitive position and reduce future sales of our products. Our credit ratings also affect our cost of capital.
A downgrade or a potential downgrade in the rating of our financial strength or of one of our principal insurance subsidiaries could affect our competitive position and reduce future sales of our products. Our credit ratings also affect our cost of capital.
Further, due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables will be due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or liquidity in a particular quarterly or annual period.
Further, due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables will be due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or liquidity in a particular quarterly or annual period. 27 Table of Contents Part I - Item 1A.
Because of the highly competitive nature of the industries The Hartford competes in, there can be no assurance that the Company will continue to compete effectively with our industry rivals, or that competitive pressure will not have a material adverse effect on our business, financial condition, results of operations or liquidity. 25 | Table of Contents Part I - Item 1A.
Because of the highly competitive nature of the industries The Hartford competes in, there can be no assurance that the Company will continue to compete effectively with our industry rivals, or that competitive pressure will not have a material adverse effect on our business, financial condition, results of operations or liquidity.
These laws and similar rules applying to subsidiaries domiciled outside of the United States may discourage potential acquisition proposals and may delay, deter, or prevent a change of control, including transactions that our Board of Directors and some or all of our stockholders might consider to be desirable.
These laws and similar rules applying to subsidiaries domiciled outside of the United States may discourage potential acquisition proposals and may delay, deter, or prevent a change of control, including transactions that our Board of Directors and some or all of our stockholders might consider to be desirable. 32 Table of Contents Part I - Item 1A.
The RBC formula for property and casualty companies establishes capital requirements relating to underwriting, asset, credit, catastrophe, operational and off-balance sheet risks. The RBC formula for life companies is applicable to our employee benefits business and establishes capital requirements relating to insurance, business, asset, credit, interest rate and off-balance sheet risks.
The RBC formula for life companies is applicable to our employee benefits business and establishes capital requirements relating to insurance, business, asset, credit, interest rate and off-balance sheet risks.
In addition, due to the long-term nature of the liabilities within our Employee Benefits operations, particularly for long-term disability, declines in interest rates over an extended period of time would result in our having to reinvest at lower yields.
In addition, due to the long-term nature of the liabilities within our Employee Benefits operations, particularly with respect to long-term disability, and our workers' compensation operations, declines in interest rates over an extended period of time would result in our having to reinvest at lower yields.
Also, the emergence of new targets and new and expanding theories of liability for claims involving issues like global climate change, risks from products and substances alleged to cause damage, physical and mental health crises, new technologies, legal system abuse, attorney representation rates, and socioeconomic and political dynamics also could result in additional litigation exposure and unexpected losses.
Also, the emergence of new targets and new and expanding theories of liability for claims involving issues like global climate change, risks from products and substances alleged to cause damage, physical and mental health crises, new technologies, evolving legal system trends such as legal system abuse, attorney representation rates, and increased third-party litigation funding, and other socioeconomic and political dynamics could result in additional litigation exposure and unexpected losses.
As a result, it is possible that any, or a combination of all, of these factors related to a catastrophe, or multiple catastrophes, whether natural or man-made, can have a material adverse effect on our business, financial condition, results of operations or liquidity.
As a result, it is possible that any, or a combination of all, of these factors related to a catastrophe, or multiple catastrophes, whether natural or man-made, can have a material adverse effect on our business, financial condition, results of operations or liquidity. 24 Table of Contents Part I - Item 1A.
Regulatory requirements could delay, deter or prevent a takeover attempt that stockholders might consider in their best interests. Before a person can acquire control of a U.S. insurance company, prior written approval must be obtained from the 32 | Table of Contents Part I - Item 1A. Risk Factors insurance commissioner of the state where the domestic insurer is domiciled.
Regulatory requirements could delay, deter or prevent a takeover attempt that stockholders might consider in their best interests. Before a person can acquire control of a U.S. insurance company, prior written approval must be obtained from the insurance commissioner of the state where the domestic insurer is domiciled.
We and our third party vendors must be able to access our systems to provide insurance quotes, process premium payments, make changes to existing policies, file and pay claims, administer mutual funds, provide customer support, manage our investment portfolios, report on financial results and perform other necessary business functions.
We, and our customers, service provides, and other third parties, as applicable, must be able to access these systems to provide insurance quotes, process premium payments, make changes to existing policies, file and pay claims, administer mutual funds, provide customer support, manage our investment portfolios, report on financial results and perform other necessary business functions.
Third parties, including third party administrators and cloud-based systems, are also subject to cyber-attacks and breaches of confidential information, along with the other risks outlined above, any one of which may result in our incurring substantial costs and other negative consequences, including a material adverse effect on our business, reputation, financial condition, 29 | Table of Contents Part I - Item 1A.
Third parties, including third party administrators and cloud-based systems, are also subject to cyber-attacks and breaches of confidential information, along with the other risks outlined above, any one of which may result in our incurring substantial costs and other negative consequences, including a material adverse effect on our business, reputation, financial condition, results of operations or liquidity.
For a description of changes in accounting standards that are currently pending and, if known, our estimates of their expected impact, see Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to the Consolidated Financial Statements. 33 | Table of Contents Part I - Item 1C. Cybersecurity
For a description of changes in accounting standards that are currently pending and, if known, our estimates of their expected impact, see Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to the Consolidated Financial Statements.
In addition, our assumed reinsurance business purchases retrocessional coverage for a portion of the risks it assumes. Under these reinsurance arrangements, other 27 | Table of Contents Part I - Item 1A. Risk Factors insurers assume a portion of our losses and related expenses; however, we remain liable as the direct insurer on all risks reinsured.
In addition, our assumed reinsurance business purchases retrocessional coverage for a portion of the risks it assumes. Under these reinsurance arrangements, other insurers assume a portion of our losses and related expenses; however, we remain liable as the direct insurer on all risks reinsured.
While there is substantial uncertainty about the timing, penetration and reliability of such technologies, and the legal frameworks that may apply, such as to autonomous vehicles, any such impacts could have a material adverse effect on our business and results of operations.
While there is substantial uncertainty about the timing, penetration and reliability of such technologies, and the legal frameworks that may apply, such as 25 Table of Contents Part I - Item 1A. Risk Factors to autonomous vehicles, any such impacts could have a material adverse effect on our business and results of operations.
For a further discussion of TRIPRA, see Part II, Item 7, MD&A - Enterprise Risk Management - Insurance Risk Management, Reinsurance as a Risk Management Strategy. Cyber risk exposure exists through stand-alone cyber policies as well as cyber coverage endorsements on some property, 24 | Table of Contents Part I - Item 1A.
For a further discussion of TRIPRA, see Part II, Item 7, MD&A - Enterprise Risk Management - Insurance Risk Management, Reinsurance as a Risk Management Strategy. Cyber risk exposure exists through stand-alone cyber policies as well as cyber coverage endorsements on some property, general liability, management liability and directors and officers policies.
Any proposed or future legislation or NAIC initiatives, if adopted, may be more restrictive on our ability to conduct business than current regulatory requirements or may result in higher costs or increased statutory capital and reserve requirements.
Any proposed or future legislation or NAIC initiatives, if adopted, may be more restrictive on our ability to conduct business than current regulatory requirements or may result in higher costs or 31 Table of Contents Part I - Item 1A. Risk Factors increased statutory capital and reserve requirements.
Our financial strength ratings, which are intended to measure our ability to meet policyholder obligations, are an important factor affecting public confidence in most of our products and, as a result, our competitiveness. A downgrade or a potential 26 | Table of Contents Part I - Item 1A.
Our financial strength ratings, which are intended to measure our ability to meet policyholder obligations, are an important factor affecting public confidence in most of our products and, as a result, our competitiveness.
Goodwill represents the excess of the amounts we paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. We test goodwill at least annually for impairment. Impairment testing is performed based upon estimates of the fair value of the “reporting unit” to which the goodwill relates.
Goodwill represents the excess of the amounts we paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition. We test goodwill at least annually for impairment.
We cannot predict what, if any, legislative or regulatory actions may be taken regarding these or other emerging technologies, but any inquiries and/or limitations could have a material impact on our business, business processes, financial condition, and results of operations.
State insurance regulators may adopt their own guidelines for insurers independent of the NAIC guidance. We cannot predict what, if any, legislative or regulatory actions may be taken regarding these or other emerging technologies, but any inquiries and/or limitations could have a material impact on our business, business processes, financial condition, and results of operations.
The ability to execute on capital management plans is subject to material challenges, uncertainties and risks. From time to time, our capital management plans may include the repurchase of common stock, the paydown of outstanding debt or both. We may not achieve all of the benefits we expect to derive from these plans.
From time to time, our capital management plans may include the repurchase of common stock, the paydown of outstanding debt or both. We may not achieve all of the benefits we expect to derive from these plans.
Such changes also can be legislative or regulatory, including changes in federal or state laws and regulations relating to the liability of insurers or policyholders, including state laws expanding “bad faith” liability and state “reviver” statutes, extending statutes of limitations for certain sexual molestation and sexual abuse claims, could result in changes in business practices, additional litigation, or unexpected losses, including increased frequency and severity of claims.
Such changes also can be legislative or regulatory, including changes in federal or state laws and regulations relating to the liability of insurers or policyholders, such as state laws expanding “bad faith” liability and state “reviver” statutes, extending statutes of limitations for certain sexual molestation and sexual abuse claims. Such changes could also come in the form of executive orders.
Risk Factors machine learning, predictive analytics and other “big data’ techniques. We may be subject to new regulations that could materially adversely affect our operations or ability to write business profitably in one or more jurisdictions. The NAIC has adopted a Model Bulletin on the Use of Artificial Intelligence Systems by Insurers.
We may be subject to new regulations that could materially adversely affect our operations or ability to write business profitably in one or more jurisdictions. The NAIC adopted a Model Bulletin on the Use of Artificial Intelligence Systems by Insurers. About 25 states have adopted some form of the Model Bulletin.
In addition, changes in climate and/or weather patterns may increase the frequency and/or intensity of severe weather and natural catastrophe events potentially leading to increased insured losses.
Any increases in the values and concentrations of insureds and property in these areas would increase the severity of catastrophic events in the future. In addition, changes in climate and/or weather patterns may increase the frequency and/or intensity of severe weather and natural catastrophe events potentially leading to increased insured losses.
If current regional and/or global conflicts were to expand, the insurance losses and adverse economic impacts could be more severe than what is currently foreseeable.
If current regional and/or global conflicts were to expand, there could be insurance losses or adverse economic impacts.
In addition, climate change-related risks, including risks associated with global energy transition, may adversely impact the value of the investments that we hold, resulting in potential realized or unrealized losses on our invested assets.
We may also experience significant interruptions to the Company’s systems and operations that hinder our ability to sell and service business, manage claims and operate our business. Climate change-related risks, including risks associated with global energy transition, may also adversely impact the value of the investments that we hold, resulting in potential realized or unrealized losses on our invested assets.
For example, regulators could impose new disclosure requirements regarding underwriting or investment in certain industry sectors or take other actions such as implementing a temporary moratorium on cancellation of policies within catastrophe prone areas. In March of 2024, the U.S. Securities and Exchange Commission (“SEC”) issued final rules to enhance and standardize climate-related disclosures for investors.
For example, regulators could impose new disclosure requirements regarding underwriting or investment in certain industry sectors or take other actions such as implementing a temporary moratorium on cancellation of policies within catastrophe prone areas.
Risk Factors results of operations or liquidity. Our increased use of open source software, cloud technology and software as a service can make it more difficult to identify and remedy such situations due to the disparate location of code utilized in our operations.
These risks could increase and become more complex as third parties incorporate new technologies, including artificial intelligence. Our increased use of open source software, cloud technology and software as a service can make it more difficult to identify and remedy such situations due to the disparate location of code utilized in our operations.
Our businesses must comply with regulations to control the privacy of customer, employee and third party data, and state, federal and international regulations regarding data privacy are becoming increasingly more onerous. A misuse or mishandling of confidential or proprietary information could result in legal liability, regulatory action and reputational harm.
Use of artificial intelligence by us or by such third parties could also result in inadvertent disclosure of our confidential information. Our businesses must comply with regulations to control the privacy of customer, employee and third party data, and state, federal and international regulations regarding data privacy are becoming increasingly more onerous.
For example, the NAIC and state insurance regulators periodically reexamine existing laws and regulations, specifically focusing on modifications to U.S. statutory accounting principles, interpretations of existing laws and the development of new laws and regulations.
In addition, future regulatory initiatives could be adopted at the federal, state and international level that could affect the profitability of our businesses. For example, the NAIC and state insurance regulators periodically reexamine existing laws and regulations, specifically focusing on modifications to U.S. statutory accounting principles, interpretations of existing laws and the development of new laws and regulations.
Our insureds may be increasingly exposed to cyber-related attacks with insured losses to property (including data and systems), breach of data, ransom payments and business interruption. Geopolitical crises or hostile actions taken by nation states or terrorist organizations may heighten the risk of cyber-attacks on companies we insure and on our own operations.
Geopolitical crises or hostile actions taken by nation states or terrorist organizations may heighten the risk of cyber-attacks on companies we insure and on our own operations.
Risk Factors Our business could be affected by other technological changes, including further advancements in automotive safety features, the development of autonomous or “self-driving” vehicles, and platforms that facilitate ride sharing.
Our business could be affected by other technological changes, including further advancements in automotive safety features, the development of autonomous or “self-driving” vehicles, and platforms that facilitate ride sharing. These technologies could impact the frequency or severity of losses, disrupt the demand for certain of our products, or reduce the size of the automobile insurance market as a whole.
We may have to litigate to enforce and protect our intellectual property and to determine its scope, validity or enforceability, which could be costly, divert significant resources and may not prove 30 | Table of Contents Part I - Item 1A. Risk Factors successful.
Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property. We may have to litigate to enforce and protect our intellectual property and to determine its scope, validity or enforceability, which could be costly, divert significant resources and may not prove successful.
For other risks associated with our outsourcing of certain functions, see the Risk Factor, “Our businesses may suffer and we may incur substantial costs if we are unable to access our systems and safeguard the security of our data in the event of a disaster, cyber breach or other information security incident.” Our ability to execute on capital management plans and other actions is subject to material challenges, uncertainties and risks.
Risk Factors and safeguard the security of our data in the event of a disaster, cyber breach, other information security incident or technology failure.” Our ability to execute on capital management plans and other actions is subject to material challenges, uncertainties and risks. The ability to execute on capital management plans is subject to material challenges, uncertainties and risks.
Changing climate and weather patterns may adversely affect our business, financial condition and results of operation. Climate change presents risks to us as an insurer, investor and employer. Climate models indicate that rising temperatures will 22 | Table of Contents Part I - Item 1A.
Changing climate and weather patterns may adversely affect our business, financial condition and results of operation. Climate change presents risks to us as an insurer, investor and employer. Climate models indicate that rising temperatures will likely result in rising sea levels over the decades to come and may increase the frequency and intensity of natural catastrophes and severe weather events.
Significant changes in the legal environment could cause our ultimate liabilities to change from our current expectations.
The Hartford accounts for such activity by establishing unpaid loss and loss adjustment expense reserves. Significant changes in the legal environment could cause our ultimate liabilities to change from our current expectations.
Risk Factors likely result in rising sea levels over the decades to come and may increase the frequency and intensity of natural catastrophes and severe weather events. Extreme weather events such as abnormally high temperatures may result in increased losses associated with our property, automobile, workers’ compensation and employee benefits businesses.
Extreme weather events such as abnormally high temperatures may result in increased losses associated with our property, automobile, 22 Table of Contents Part I - Item 1A. Risk Factors workers’ compensation and employee benefits businesses.
In the United States, statutory accounting standards and statutory capital and reserve requirements for these entities are prescribed by the applicable insurance regulators and the National Association of Insurance Commissioners ("NAIC"). The minimum capital we must hold is based on risk-based capital (“RBC”) formulas for both property and casualty and life companies.
In the United States, statutory accounting standards and statutory capital and reserve 26 Table of Contents Part I - Item 1A. Risk Factors requirements for these entities are prescribed by the applicable insurance regulators and the National Association of Insurance Commissioners ("NAIC").
Risk Factors general liability, management liability and directors and officers policies. Increasing frequency of cyber attacks and the evolving nature of cyber risk taking place across the globe may potentially lead to increased insured losses across the industry and for the businesses we insure.
Increasing frequency of cyber attacks and the evolving nature of cyber risk taking place across the globe may potentially lead to increased insured losses across the industry and for the businesses we insure. Our insureds may be increasingly exposed to cyber-related attacks with insured losses to property (including data and systems), breach of data, ransom payments and business interruption.
As a result, the determination of the fair values of these securities may include inputs and assumptions that require more estimation and management judgment and the use of complex valuation methodologies. These fair values may differ materially from the value at which the investments may be ultimately sold.
In addition, there may be certain securities whose fair value is based on one or more unobservable inputs, even during normal market conditions. As a result, the determination of the fair values of these securities may include inputs and assumptions that require more estimation and management judgment and the use of complex valuation methodologies.
In addition, the Federal Insurance Office continues to analyze the potential for climate change to affect insurance and reinsurance coverage, which could result in increased data collection and reporting. Regulators may also impose new requirements affecting our operations such as disclosure related to greenhouse gas emissions (GHGe) and other climate-related information, increasing our operating expenses and litigation risk.
Other regulators may impose additional reporting requirements affecting our operations, such as disclosure related to greenhouse gas emissions (GHGe) and other climate-related information, thereby increasing our operating expenses and litigation risk.
Compliance with these laws, regulations and executive orders is costly, time consuming and personnel intensive, and may have an adverse effect on our business, financial condition, results of operations or liquidity. Our insurance business is sensitive to significant changes in the legal environment that could adversely affect The Hartford’s results of operations or financial condition or harm its businesses.
These laws, regulations and executive orders are primarily intended to protect investors in the securities markets or investment advisory clients and generally grant supervisory authorities broad administrative powers. Compliance with these laws, regulations and executive orders is costly, time consuming and personnel intensive, and may have an adverse effect on our business, financial condition, results of operations or liquidity.
Further, rapidly changing or unprecedented credit and equity market conditions could materially impact the valuation of securities and the period-to-period changes in value could vary significantly. Decreases in value could have a material adverse effect on our business, results of operations, financial condition or liquidity.
Decreases in value could have a material adverse effect on our business, results of operations, financial condition or liquidity.
Catastrophes can also be man-made, such as terrorist attacks, civil unrest, cyber-attacks, explosions or infrastructure failures. Catastrophes may also include some major international events designated by Lloyd's of London. The geographic distribution of our business subjects us to various catastrophe exposures across different regions of the United States.
Catastrophes can be caused by various unpredictable natural events, including, among others, earthquakes, hurricanes, hailstorms, severe winter weather, wind storms, fires, tornadoes, and pandemics. Catastrophes can also be man-made, such as terrorist attacks, civil unrest, cyber-attacks, explosions or infrastructure failures. Catastrophes may also include some major international events designated by Lloyd's of London.
Like any major insurance company, litigation is a routine part of The Hartford’s business - both in defending and indemnifying our insureds and in litigating insurance coverage and benefits disputes. The Hartford accounts for such activity by establishing unpaid loss and loss adjustment expense reserves.
Our insurance business is sensitive to significant changes in the legal environment that could adversely affect The Hartford’s results of operations or financial condition or harm its businesses. Like any major insurance company, litigation is a routine part of The Hartford’s business - both in defending and indemnifying our insureds and in litigating insurance coverage and benefits disputes.
These 23 | Table of Contents Part I - Item 1A. Risk Factors factors, among others, make the variability of gross reserves estimates for these longer-tailed exposures significantly greater than for other more traditional exposures. Effective December 31, 2016, the Company entered into an agreement with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway Inc.
These factors, among others, make the variability of gross reserves estimates for these longer-tailed exposures significantly greater than for other more traditional exposures. 23 Table of Contents Part I - Item 1A. Risk Factors We are vulnerable to losses from catastrophes, both natural and man-made. Our insurance operations expose us to claims arising out of catastrophes.
The application of these regulations and guidelines by insurers involves interpretations and judgments that may be challenged by state insurance departments and other regulators. The result of those potential challenges could require us to increase levels of regulatory capital and reserves or incur higher operating and/or tax costs.
Further, a particular regulator or enforcement authority may interpret a legal, accounting, or reserving issue differently than we have, exposing us to different or additional regulatory risks. The application of these regulations and guidelines by insurers involves interpretations and judgments that may be challenged by state insurance departments and other regulators.
We are also exposed to catastrophe losses in other parts of the world through our global specialty business. Any increases in the values and concentrations of insureds and property in these areas would increase the severity of catastrophic events in the future.
The geographic distribution of our business subjects us to various catastrophe exposures across different regions of the United States. We are also exposed to catastrophe losses in other parts of the world through our global specialty business.
Removed
In addition, the value of credit derivatives under which the Company assumes exposure or purchases protection are impacted by changes in credit spreads, with losses occurring when credit spreads widen for assumed exposure or when credit spreads tighten if credit protection has been purchased. • Equity Markets Risk - A decline in equity markets may result in net realized losses on sales of equity securities, 21 | Table of Contents Part I - Item 1A.
Added
For additional information on equity market sensitivity, see 21 Table of Contents Part I - Item 1A.
Removed
We may also experience significant interruptions to the Company’s systems and operations that hinder our ability to sell and service business, manage claims and operate our business.
Added
The minimum capital we must hold is based on risk-based capital (“RBC”) formulas for both property and casualty and life companies. The RBC formula for property and casualty companies establishes capital requirements relating to underwriting, asset, credit, catastrophe, operational and off-balance sheet risks.
Removed
(“Berkshire”) whereby the Company was reinsured for subsequent adverse development on substantially all of its net A&E reserves up to an aggregate net limit of $1.5 billion.
Added
These fair values may differ materially from the value at which the investments may be ultimately sold. Further, rapidly changing or unprecedented credit and equity market conditions could materially impact the valuation of securities and the period-to-period changes in value could vary significantly.
Removed
As of December 31, 2024, the Company has exhausted the $1.5 billion treaty limit, and as such, any further development that increases our recorded net reserves could have a material adverse effect on our financial condition, results of operations or liquidity.
Added
Impairment testing is performed based upon estimates of the fair value of the “reporting unit” to 28 Table of Contents Part I - Item 1A. Risk Factors which the goodwill relates.
Removed
We remain directly liable to claimants and if the reinsurer does not fulfill its obligations under the agreement we may need to increase our recorded net reserves. For additional information related to risks associated with the adverse development cover ("ADC"), see Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements.
Added
A misuse or mishandling of confidential or proprietary information, including through artificial intelligence technology, could result in legal liability, regulatory action and reputational harm.
Removed
We are vulnerable to losses from catastrophes, both natural and man-made. Our insurance operations expose us to claims arising out of catastrophes. Catastrophes can be caused by various unpredictable natural events, including, among others, earthquakes, hurricanes, hailstorms, severe winter weather, wind storms, fires, tornadoes, and pandemics.
Added
For other risks associated with our outsourcing of certain functions, see the Risk Factor, “Our businesses may suffer and we may incur substantial costs if we are unable to access our systems 29 Table of Contents Part I - Item 1A.
Removed
These technologies could impact the frequency or severity of losses, disrupt the demand for certain of our products, or reduce the size of the automobile insurance market as a whole.
Added
The Company could be subject to these enactments both as a public company generally and specifically as an insurer. As a public company, we continue to monitor the development of various climate disclosure regimes.
Removed
In addition, there may be certain securities whose fair value is based on one or more 28 | Table of Contents Part I - Item 1A. Risk Factors unobservable inputs, even during normal market conditions.
Added
Such developments have stalled at the federal level, with the SEC having withdrawn its defense of its 2024 comprehensive climate rules, but have continued to expand in certain state and international jurisdictions. We may be subject to these reporting regimes based on the particulars of our corporate footprint.
Removed
Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor further discussion of the Company's risks related to cybersecurity, see Part I, Item 1A, — Risk Factors for the risk factor "Our businesses may suffer and we may incur substantial costs if we are unable to access our systems and safeguard the security of our data in the event of a disaster, cyber breach or other information security incident." From a governance perspective, senior members of our Enterprise Risk Management, Information Protection and Internal Audit functions provide detailed, regular reports on cybersecurity matters to the Board of Directors, primarily through the Audit Committee, which oversees controls for the Company's major risk exposures and has principal responsibility for oversight of cybersecurity risk, and the Finance, Investment and Risk Management Committee ("FIRMCo"), which oversees business risk related to cyber insurance products.
Biggest change" From a governance perspective, senior members of our Enterprise Risk Management, Information Protection and Internal Audit functions provide detailed, regular reports on cybersecurity matters to the Board of Directors, primarily through the Audit Committee, which oversees controls for the Company's major risk exposures and has principal responsibility for oversight of cybersecurity risk, and the Finance, Investment and Risk Management Committee ("FIRMCo"), which oversees business risk related to cyber insurance products.
The CISO has held several senior-level information technology roles in his twenty-six-year tenure with the Company and has served in his current role since 2021. In his various roles, he has been responsible for providing senior leadership in the areas of information security, IT governance risk & compliance, business continuity, and disaster recovery.
The CISO has also held several senior-level information technology roles in his twenty-seven-year tenure with the Company and has served in his current role since 2021. In his various roles, he has been responsible for providing senior leadership in the areas of information security, IT governance risk & compliance, business continuity, and disaster recovery.
With respect to cyber, we have procedures to verify each service provider’s information security controls, and each vendor completes a cyber questionnaire that also addresses their resiliency in the event of an intrusion to their systems. We proactively communicate with suppliers to understand mitigation steps taken when major cyber exposures are identified.
With respect to cyber, we have procedures to verify service provider’s information security controls, and a vendor cyber questionnaire is completed that also addresses their resiliency in the event of an intrusion to their systems. We proactively communicate with suppliers to understand mitigation steps taken when major cyber exposures are identified.
In connection with regular assessments of third-party service providers, our information protection team performs an assessment of each vendor’s information security practices and protocols, including its readiness to protect against and respond to cybersecurity breaches.
In connection with regular assessments of third-party service providers, vendor’s information security practices and protocols are assessed by the information protection team, including its readiness to protect against and respond to cybersecurity breaches.
The Audit Committee, FIRMCo and the full Board of Directors are apprised of developments in the external environment and business strategies that present additional potential cyber risk exposure to the Company on an as-needed basis. As a result, cybersecurity and cyber risk are typically discussed more frequently than the annual minimum requirements.
The Audit Committee, FIRMCo and the full Board of Directors are apprised of developments in the external environment and business strategies that present additional potential cyber risk exposure to the Company on an as-needed basis. As a result, 33 Table of Contents Part I - Item 1C.
The Company has established an Executive Privacy & Security Council ("EPSC") that meets semi-annually. The EPSC consists of a cross-functional senior leaders, including the Chief Information Officer ("CIO"), the Chief Information Security Officer ("CISO"), the Chief Risk Officer ("CRO"), the Chief Privacy Officer ("CPO") and General Counsel, among others.
The EPSC consists of a cross-functional senior leaders, including the Chief Information Officer ("CIO"), the Chief Information Security Officer ("CISO"), the Chief Risk Officer ("CRO"), the Chief Privacy Officer ("CPO") and General Counsel, among others. The EPSC receives a monthly written executive briefing on topics, and with metrics related to cybersecurity, including incident prevention, detection, mitigation and remediation.
The EPSC receives a monthly written executive briefing on topics, and with metrics related to cybersecurity, including incident prevention, detection, mitigation and remediation. Quarterly, the Information Technology ("IT') Risk Council, made up of senior IT leaders, is also provided with an update of cybersecurity risks and preparedness.
Quarterly, the Information Technology Risk Council, made up of senior IT leaders, is also provided with an update of cybersecurity risks and preparedness. Various other meetings are held on cybersecurity topics periodically, including monthly business operating reviews, and meetings of the Enterprise Risk and Capital Committee ("ERCC") and executive leadership team.
Removed
Various other meetings are held on cybersecurity topics periodically, including monthly business operating reviews, and meetings of the Enterprise Risk and Capital Committee ("ERCC") and executive leadership team. 34 | Table of Contents Part I - Item 1C. Cybersecurity Both the CIO and the CISO have expertise assessing and managing cybersecurity risks.
Added
For further discussion of the Company's risks related to cybersecurity, see Part I, Item 1A, — Risk Factors for the risk factor " Our businesses may suffer and we may incur substantial costs if we are unable to access our systems and safeguard the security of our data in the event of a disaster, cyber breach, other information security incident or technology failure.
Removed
The CIO has served in her current role since 2019 and served in similar technology leadership roles before her current role.
Added
Cybersecurity cybersecurity and cyber risk are typically discussed more frequently than the annual minimum requirements. The Company has established an Executive Privacy & Security Council ("EPSC") that meets semi-annually.
Removed
She has nineteen years of executive leadership experience in the financial services industry and twenty-nine years of overall technology experience, during which time she has led large scale business transformation, delivered innovative technology strategies and has overseen and modernized complex technology portfolios.
Added
Both the CIO and the CISO have expertise assessing and managing cybersecurity risks. The CIO assumed his current role in March of 2025 and served in several similar technology leadership roles during his thirty-year career.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we lease offices throughout North America, the United Kingdom and other overseas locations to house administrative, claims handling, sales and other business operations. As of December 31, 2024, The Hartford leased approximately 998 thousand square feet throughout the United States, 13 thousand square feet in London and 6 thousand square feet in other international branches.
Biggest changeIn addition, we lease offices throughout North America, the United Kingdom, India, and other overseas locations to house administrative, claims handling, sales and other business operations. As of December 31, 2025, The Hartford leased approximately 1 million square feet throughout the United States, 13 thousand square feet in London and 28 thousand square feet in other international branches.
Item 2. PROPERTIES As of December 31, 2024, The Hartford owned building space totaling approximately 1.8 million square feet consisting of its home office complex in Hartford, Connecticut and other properties within the greater Hartford, Connecticut area.
Item 2. Properties As of December 31, 2025, The Hartford owned building space totaling approximately 1.8 million square feet consisting of its home office complex in Hartford, Connecticut and other properties within the greater Hartford, Connecticut area.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS For a discussion regarding The Hartford’s legal proceedings, see the information contained under “Litigation” including “Run-off Asbestos and Environmental Claims” in Note 14 - Commitments and Contingencies of the Notes to Consolidated Financial Statements. 35 | Table of Contents Part II - Item 5.
Biggest changeItem 3. Legal Proceedings For a discussion regarding The Hartford’s legal proceedings, see the information contained under “Litigation” including “Run-off Asbestos and Environmental Claims” in Note 14 - Commitments and Contingencies of the Notes to Consolidated Financial Statements. 34 Table of Contents Part II - Item 5.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−1 removed4 unchanged
Biggest changeThe Company paid an average price per share of $113.44 in employee tax withholding obligations related to net share settlements in the three months ended December 31, 2024. [2]On July 28, 2022, the Board of Directors approved a share repurchase authorization for up to $3.0 billion effective from August 1, 2022 to December 31, 2024.
Biggest changeThe Company paid an average price per share of $126.44 in employee tax withholding obligations related to net share settlements in the three months ended December 31, 2025. [2] Average price paid per share includes the purchase price of shares acquired and direct costs to acquire shares, including commissions and accrued 1% excise taxes. [3] On July 25, 2024, the Board of Directors approved a share repurchase authorization for up to $3.3 billion effective from August 1, 2024 to December 31, 2026.
For information related to securities authorized for issuance under equity compensation plans, see Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Repurchases of common stock by the Company during the quarter ended December 31, 2024 are set forth below.
For information related to securities authorized for issuance under equity compensation plans, see Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Repurchases of common stock by the Company during the quarter ended December 31, 2025 are set forth below.
Item 5. MARKET FOR THE HARTFORD'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Hartford’s common stock is traded on the New York Stock Exchange (“NYSE”) under the trading symbol “HIG”. As of February 20, 2025, the Company had approximately 7,485 registered holders of record of the Company's common stock.
Item 5. Market for The Hartford's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Hartford’s common stock is traded on the New York Stock Exchange (“NYSE”) under the trading symbol “HIG”. As of February 19, 2026, the Company had approximately 7,119 registered holders of record of the Company's common stock.
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. 36 | Table of Contents Part II - Item 5.
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.
During the period from January 1, 2025 through February 20, 2025, the Company repurchased 2.2 million shares for $248.
During the period from January 1, 2026 through February 19, 2026, the Company repurchased 1.8 million common shares for $247.
Repurchases of Common Stock by the Issuer for the Three Months Ended December 31, 2024 Period Total Number of Shares Purchased [1] Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs [2] (in millions) October 1, 2024 - October 31, 2024 1,507,644 $ 117.71 1,499,511 $ 3,373 November 1, 2024 - November 30, 2024 779,493 $ 117.75 758,991 $ 3,285 December 1, 2024 - December 31, 2024 1,176,909 $ 117.26 1,176,909 $ 3,148 Total 3,464,046 $ 117.57 3,435,411 [1]Includes 28,635 shares in net settlement of employee tax withholding obligations related to equity awards under the Company's incentive stock plans, which were not part of publicly announced share repurchase authorizations.
Repurchases of Common Stock by the Issuer for the Three Months Ended December 31, 2025 Period Total Number of Shares Purchased [1] Average Price Paid Per Share [2] Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs [3] (in millions) October 1, 2025 - October 31, 2025 1,308,077 $ 128.74 1,306,750 $ 1,781 November 1, 2025 - November 30, 2025 749,458 $ 133.32 742,586 $ 1,683 December 1, 2025 - December 31, 2025 999,986 $ 136.74 999,986 $ 1,548 Total 3,057,521 $ 132.48 3,049,322 [1] Includes 8,199 shares in net settlement of employee tax withholding obligations related to equity awards under the Company's incentive stock plans, which were not part of publicly announced share repurchase authorizations.
Cumulative Five-Year Total Return Base Period Company/Index 2019 2020 2021 2022 2023 2024 The Hartford Insurance Group, Inc. $ 100 $ 83.08 $ 119.85 $ 134.61 $ 146.09 $ 202.42 S&P 500 Index $ 100 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P Insurance Composite Index $ 100 $ 99.56 $ 131.54 $ 144.86 $ 158.28 $ 200.73 37 | Table of Contents Index to MD&A Part II - Item 7.
Cumulative Five-Year Total Return Base Period Company/Index 2020 2021 2022 2023 2024 2025 The Hartford Insurance Group, Inc. $ 100 $ 144.27 $ 162.04 $ 175.85 $ 243.66 $ 312.08 S&P 500 Index $ 100 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 S&P Insurance Composite Index $ 100 $ 132.12 $ 145.50 $ 158.97 $ 201.61 $ 209.85 36 Table of Contents Index to MD&A Part II - Item 7.
Removed
In addition to the authorization covering the period from August 1, 2022 to December 31, 2024, on July 25, 2024, the Board of Directors approved a share repurchase authorization for up to $3.3 billion effective from August 1, 2024 to December 31, 2026.
Added
Share repurchase authorization does not include commissions or 1% excise tax costs. 35 Table of Contents Part II - Item 5.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeManagement's Discussion and Analysis of Financial Condition and Results of Operations Fixed Maturities, AFS by Type December 31, 2024 December 31, 2023 Amortized Cost ACL Gross Unrealized Gains Gross Unrealized Losses Fair Value Percent of Total Fair Value Amortized Cost ACL Gross Unrealized Gains Gross Unrealized Losses Fair Value Percent of Total Fair Value ABS Consumer loans $ 2,554 $ — $ 19 $ (11) $ 2,562 6.0 % $ 2,414 $ — $ 10 $ (18) $ 2,406 6.0 % Other 1,394 — 9 (28) 1,375 3.3 % 933 — 8 (27) 914 2.3 % CLOs 3,237 — 13 — 3,250 7.6 % 3,104 — 3 (17) 3,090 7.8 % CMBS Agency [1] 1,284 (13) 16 (128) 1,159 2.7 % 1,179 (12) 14 (119) 1,062 2.7 % Bonds 1,597 — 1 (114) 1,484 3.5 % 2,150 — — (219) 1,931 4.8 % Interest only 95 — 4 (6) 93 0.2 % 137 — 5 (10) 132 0.3 % Corporate Basic industry 1,100 — 5 (43) 1,062 2.5 % 967 — 7 (39) 935 2.3 % Capital goods 1,769 — 14 (69) 1,714 4.0 % 1,630 — 19 (67) 1,582 4.0 % Consumer cyclical 1,599 — 9 (63) 1,545 3.6 % 1,331 (4) 20 (55) 1,292 3.2 % Consumer non-cyclical 2,641 — 16 (139) 2,518 5.9 % 2,232 — 27 (123) 2,136 5.4 % Energy 1,395 — 10 (59) 1,346 3.2 % 1,261 — 13 (57) 1,217 3.1 % Financial services 6,455 — 28 (245) 6,238 14.7 % 5,434 — 30 (283) 5,181 13.0 % Tech./comm. 2,848 — 19 (169) 2,698 6.3 % 2,470 (2) 47 (143) 2,372 6.0 % Transportation 930 — 5 (58) 877 2.1 % 803 — 8 (60) 751 1.9 % Utilities 2,464 (3) 11 (167) 2,305 5.4 % 2,155 (3) 25 (148) 2,029 5.1 % Real estate investment trusts ("REITs") 354 — — (21) 333 0.8 % 408 — 1 (38) 371 0.9 % Foreign govt./govt. agencies 500 — 3 (23) 480 1.1 % 583 — 6 (27) 562 1.4 % Municipal bonds Taxable 1,384 — 6 (126) 1,264 3.0 % 1,211 — 7 (113) 1,105 2.8 % Tax-exempt 4,190 — 71 (221) 4,040 9.5 % 4,996 — 124 (186) 4,934 12.4 % RMBS Agency 3,002 — 7 (225) 2,784 6.5 % 2,342 — 14 (171) 2,185 5.5 % Non-agency 2,586 — 6 (168) 2,424 5.7 % 2,293 — 4 (235) 2,062 5.2 % Sub-prime 22 — — — 22 0.1 % 40 — — — 40 0.1 % U.S.
Biggest changeFixed Maturities, AFS by Type December 31, 2025 December 31, 2024 Amortized Cost ACL Gross Unrealized Gains Gross Unrealized Losses Fair Value Percent of Total Fair Value Amortized Cost ACL Gross Unrealized Gains Gross Unrealized Losses Fair Value Percent of Total Fair Value ABS Consumer loans $ 3,375 $ — $ 41 $ (2) $ 3,414 7.4 % $ 3,013 $ — $ 25 $ (11) $ 3,027 7.1 % Other 1,253 — 10 (14) 1,249 2.7 % 935 — 3 (28) 910 2.2 % CLOs 3,310 (2) 9 (1) 3,316 7.2 % 3,237 — 13 — 3,250 7.6 % CMBS Agency [1] 1,192 (14) 19 (87) 1,110 2.4 % 1,284 (13) 16 (128) 1,159 2.7 % Bonds 1,206 — 1 (61) 1,146 2.5 % 1,597 — 1 (114) 1,484 3.5 % Interest only 70 — 4 (2) 72 0.2 % 95 — 4 (6) 93 0.2 % Corporate Basic industry 1,232 — 18 (19) 1,231 2.7 % 1,100 — 5 (43) 1,062 2.5 % Capital goods 1,757 — 44 (30) 1,771 3.8 % 1,769 — 14 (69) 1,714 4.0 % Consumer cyclical 1,667 — 36 (37) 1,666 3.6 % 1,599 — 9 (63) 1,545 3.6 % Consumer non-cyclical 2,860 — 54 (84) 2,830 6.2 % 2,641 — 16 (139) 2,518 5.9 % Energy 1,452 — 27 (38) 1,441 3.1 % 1,395 — 10 (59) 1,346 3.2 % Financial services 6,952 — 87 (125) 6,914 15.0 % 6,455 — 28 (245) 6,238 14.7 % Tech./comm. 3,400 — 55 (114) 3,341 7.3 % 2,848 — 19 (169) 2,698 6.3 % Transportation 862 — 12 (34) 840 1.8 % 930 — 5 (58) 877 2.1 % Utilities 2,793 — 39 (116) 2,716 5.9 % 2,464 (3) 11 (167) 2,305 5.4 % Real estate investment trusts ("REITs") 330 — 3 (7) 326 0.7 % 354 — — (21) 333 0.8 % Foreign govt./govt. agencies 440 — 9 (2) 447 1.0 % 500 — 3 (23) 480 1.1 % Municipal bonds Taxable 1,685 — 19 (92) 1,612 3.5 % 1,384 — 6 (126) 1,264 3.0 % Tax-exempt 3,146 — 70 (176) 3,040 6.6 % 4,190 — 71 (221) 4,040 9.5 % RMBS Agency 3,544 — 33 (139) 3,438 7.5 % 3,002 — 7 (225) 2,784 6.5 % Non-agency 2,828 — 17 (105) 2,740 5.9 % 2,608 — 6 (168) 2,446 5.8 % U.S.
For most lines of business, however, ALAE is analyzed separately, using paid development techniques and a ratio of paid ALAE to paid loss applied to loss reserves to estimate unpaid ALAE. Unallocated loss adjustment expenses ("ULAE") ULAE is analyzed separately from loss and ALAE.
For most lines of business, however, ALAE is analyzed separately, using paid development techniques and a ratio of paid ALAE to paid loss applied to loss reserves to estimate unpaid ALAE. Unallocated loss adjustment expenses ULAE is analyzed separately from loss and ALAE.
At the senior management level, an Enterprise Risk and Capital Committee ("ERCC") oversees the risk profile and risk management practices of the Company. As illustrated below, a number of functional committees sit underneath the ERCC, providing oversight of specific risk areas and recommending risk mitigation strategies to the ERCC.
At the senior management level, an Enterprise Risk and Capital Committee oversees the risk profile and risk management practices of the Company. As illustrated below, a number of functional committees sit underneath the ERCC, providing oversight of specific risk areas and recommending risk mitigation strategies to the ERCC.
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.
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 plans.
Most of these factors are outside of the Company’s control. 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.
Most of these factors are outside of the Company’s control. 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 U.S. GAAP capital held by the Company in determining the Company’s financial strength and credit ratings.
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.
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 mortgage 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.
For additional information about future policy benefits and other policyholder funds and benefits payable, see Note 11 - Reserve for Future Policy Benefits and Note 12 - Other Policyholder Funds and Benefits Payable of Notes to Consolidated Financial Statements.
For additional information about future policy benefits and other policyholder funds and benefits payable, see Note 11 - Reserve for Future Policy Benefits and Note 12 - Other Policyholder Funds and Benefits Payable of Notes to Consolidated Financial Statements.
Stat to GAAP Differences Significant differences between U.S. GAAP stockholders’ equity and aggregate statutory capital prepared in accordance with U.S. STAT include the following: • U.S. STAT excludes equity of non-insurance and foreign insurance subsidiaries not held by U.S. insurance subsidiaries. • Costs incurred by the Company to acquire insurance policies are deferred under U.S.
U.S. STAT to U.S. GAAP Differences Significant differences between U.S. GAAP stockholders’ equity and aggregate statutory capital prepared in accordance with U.S. STAT include the following: • U.S. STAT excludes equity of non-insurance and foreign insurance subsidiaries not held by U.S. insurance subsidiaries. • Costs incurred by the Company to acquire insurance policies are deferred under U.S.
For GAAP the deferred gain is amortized in proportion of actual recoveries collected to total expected recoveries, while for STAT special surplus is released dollar for dollar once recoveries collected exceed the reinsurance premium. In addition, certain assets, including a portion of premiums receivable and fixed assets, are non-admitted (recorded at zero value and charged against surplus) under U.S. STAT.
GAAP the deferred gain is amortized in proportion of actual recoveries collected to total expected recoveries, while for STAT special surplus is released dollar for dollar once recoveries collected exceed the reinsurance premium. In addition, certain assets, including a portion of premiums receivable and fixed assets, are non-admitted (recorded at zero value and charged against surplus) under U.S. STAT. U.S.
U.S. GAAP generally evaluates assets based on their recoverability. | RISK BASED CAPITAL The Company's U.S. insurance companies' states of domicile impose RBC requirements. The requirements provide a means of measuring the minimum amount of statutory capital appropriate for an insurance company to support its overall business operations based on its size and risk profile.
GAAP generally evaluates assets based on their recoverability. Risk Based Capital The Company's U.S. insurance companies' states of domicile impose RBC requirements. The requirements provide a means of measuring the minimum amount of statutory capital appropriate for an insurance company to support its overall business operations based on its size and risk profile.
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 BSA Boy Scouts of America LTV Loan-to-Value CAY Current Accident Year MD&A Management's Discussion and Analysis of Financial Conditions and Results of Operations CLOs Collateralized Loan Obligations NAIC National Association of Insurance Commissioners CMBS Commercial Mortgage-Backed Securities NIC Navigators Insurance Company CODM Chief Operating Decision Maker NICO National Indemnity Company, a subsidiary of Berkshire Hathaway 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 (Loss) LCL Liability for Credit Losses AUM Assets Under Management LTD Long-Term Disability BSA Boy Scouts of America LTV Loan-to-Value CAY Current Accident Year MD&A Management's Discussion and Analysis of Financial Conditions and Results of Operations CLOs Collateralized Loan Obligations NAIC National Association of Insurance Commissioners CMBS Commercial Mortgage-Backed Securities NIC Navigators Insurance Company CODM Chief Operating Decision Maker NICO National Indemnity Company, a subsidiary of Berkshire Hathaway Inc.
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.
See the term Current Accident Year Catastrophe Ratio within the Key Performance Measures and Ratios 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.
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.
Derivatives may be used to achieve the following Company-approved objectives: (1) hedging risk arising from interest rate, equity 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.
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.
Two major factors, 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.
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 i s calculated by dividing (a) common stockholders' equity, excluding AOCI, after tax, by (b) common shares outstanding and dilutive potential common shares.
Management's Discussion and Analysis of Financial Condition and Results of Operations Book Value per Diluted Share excluding accumulated other comprehensive income (loss) ("AOCI")- This is a non-GAAP per share measure that i s calculated by dividing (a) common stockholders' equity, excluding AOCI, after tax, by (b) common shares outstanding and dilutive potential common shares.
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. Assets and Liabilities Subject to Foreign Currency Exchange Risk Investment portfolio The Company is exposed to foreign exchange risk affecting non-U.S. dollar denominated cash, fixed maturities, equities, and derivative instruments.
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. Assets and Liabilities Subject to Foreign Currency Exchange Risk Investment portfolio The Company is exposed to foreign exchange risk affecting non-U.S. dollar denominated cash, fixed maturities, and derivative instruments.
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.
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 $1.25 per person.
For a discussion regarding the results of the evaluation of older, long-term casualty liabilities reported in the Property & Casualty Other Operations reportable segment, see MD&A - Critical Accounting Estimates, Property and Casualty Insurance Product Reserves, Net of Reinsurance. For a discussion of the allowance for uncollectible reinsurance, see Note 8 – Reinsurance of Notes to Consolidated Financial Statements.
For a discussion regarding the results of the evaluation of older, long-term casualty liabilities reported in the Property & Casualty Other Operations reportable segment, see MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves, Net of Reinsurance. For a discussion of the allowance for uncollectible reinsurance, see Note 8 – Reinsurance of Notes to Consolidated Financial Statements.
Definitions of Non-GAAP and Other Measures and Ratios Assets Under Management (“AUM”)- Include mutual fund and 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.
Definitions of Non-GAAP and Other Measures and Ratios Assets Under Management ("AUM")- Include mutual fund and 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.
The nature and timing of any such Congressional or regulatory action with respect to any such efforts is unclear. Guaranty Fund and Other Insurance-related Assessments For a discussion regarding Guaranty Fund and Other Insurance-related Assessments, see Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements.
The nature and timing of any such Congressional or regulatory action with respect to any such efforts is unclear. Guaranty Fund and Other Insurance-related Assessments For a discussion regarding Guaranty Funds and Other Insurance-related Assessments, see Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements.
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.
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, and derivative instruments.
Management's Discussion and Analysis of Financial Condition and Results of Operations Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Year Ended December 31, 2024 Business Insurance Personal Insurance Property & Casualty Other Operations Total Property & Casualty Insurance 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 7,186 2,351 — 9,537 Current accident year ("CAY") catastrophes 486 282 — 768 Prior accident year development ("PYD") (231) (108) 219 (120) Total provision for unpaid losses and loss adjustment expenses 7,441 2,525 219 10,185 Change in deferred gain on retroactive reinsurance included in the provision for the period but reflected in other liabilities 145 — (62) 83 Payments (5,400) (2,345) (195) (7,940) Foreign currency adjustment (25) — — (25) Ending liabilities for unpaid losses and loss adjustment expenses, net 26,743 2,220 688 29,651 Reinsurance and other recoverables 4,637 20 2,096 6,753 Ending liabilities for unpaid losses and loss adjustment expenses, gross $ 31,380 $ 2,240 $ 2,784 $ 36,404 Earned premiums and fee income $ 12,764 $ 3,486 Loss and loss adjustment expense paid ratio [1] 42.3 67.3 Loss and loss adjustment expense ratio 58.5 73.1 Prior accident year development (pts) [2] (1.8) (3.1) [1] The “loss and loss adjustment 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.
Management's Discussion and Analysis of Financial Condition and Results of Operations Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Year Ended December 31, 2024 Business Insurance Personal Insurance Property & Casualty Other Operations Total Property & Casualty Insurance 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 7,186 2,351 — 9,537 Current accident year catastrophes 486 282 — 768 Prior accident year development (231) (108) 219 (120) Total provision for unpaid losses and loss adjustment expenses 7,441 2,525 219 10,185 Change in deferred gain on retroactive reinsurance included in other liabilities 145 — (62) 83 Payments (5,400) (2,345) (195) (7,940) Foreign currency adjustment (25) — — (25) Ending liabilities for unpaid losses and loss adjustment expenses, net 26,743 2,220 688 29,651 Reinsurance and other recoverables 4,637 20 2,096 6,753 Ending liabilities for unpaid losses and loss adjustment expenses, gross $ 31,380 $ 2,240 $ 2,784 $ 36,404 Earned premiums and fee income $ 12,764 $ 3,486 Loss and loss adjustment expense paid ratio [1] 42.3 67.3 Loss and loss adjustment expense ratio 58.5 73.1 Prior accident year development (pts) [2] (1.8) (3.1) [1] The “loss and loss adjustment 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.
In view of the uncertainties regarding the outcome of these matters, as well as the tax-deductibility of payments, it is possible that the ultimate cost to the Company of these matters could exceed the reserve by an amount that would have a material adverse effect on the Company’s consolidated results of operations or liquidity in a particular quarterly or annual period. 70 | Table of Contents Index to MD&A Part II - Item 7.
In view of the uncertainties regarding the outcome of these matters, as well as the tax-deductibility of payments, it is possible that the ultimate cost to the Company of these matters could exceed the reserve by an amount that would have a material adverse effect on the Company’s consolidated results of operations or liquidity in a particular quarterly or annual period. 69 Table of Contents Index to MD&A Part II - Item 7.
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 under-insured 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 87 | Table of Contents Index to MD&A Part II - Item 7.
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 under-insured 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 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 86 Table of Contents Index to MD&A Part II - Item 7.
The Company does not produce a statistical range or confidence interval of reserve estimates and, since reserving methods with more credibility are given greater weight, the selected best estimate may differ from the mid-point of the various estimates produced by the actuarial methods used. 55 | Table of Contents Index to MD&A Part II - Item 7.
The Company does not produce a statistical range or confidence interval of reserve estimates and, since reserving methods with more credibility are given greater weight, the selected best estimate may differ from the mid-point of the various estimates produced by the actuarial methods used. 54 Table of Contents Index to MD&A Part II - Item 7.
Invested Assets not Supporting Group Life and Disability Reserves The following table provides an analysis showing the estimated before tax change in the fair value of the Company’s investments and related derivatives, excluding assets supporting group life and disability reserves which are included in the table above, assuming 100 basis point upward and downward parallel shifts in the yield curve as of December 31, 2024 and 2023.
Invested Assets not Supporting Group Life and Disability Reserves The following table provides an analysis showing the estimated before tax change in the fair value of the Company’s investments and related derivatives, excluding assets supporting group life and disability reserves which are included in the table above, assuming 100 basis point upward and downward parallel shifts in the yield curve as of December 31, 2025 and 2024.
However, because of the significant uncertainties surrounding reserves, it is possible that management’s estimate of the ultimate liabilities for these claims may change in the future and that the required adjustment to currently recorded reserves could be material to the Company’s results of operations or liquidity. 58 | Table of Contents Index to MD&A Part II - Item 7.
However, because of the significant uncertainties surrounding reserves, it is possible that management’s estimate of the ultimate liabilities for these claims may change in the future and that the required adjustment to currently recorded reserves could be material to the Company’s results of operations or liquidity. 57 Table of Contents Index to MD&A Part II - Item 7.
Included in the 2024 adverse reserve development was an increase in ULAE reserves, primarily due to an increase in expected aggregate claim handling costs associated with asbestos and environmental claims. The Company provides an allowance for uncollectible reinsurance, reflecting management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay.
Included in the 2025 adverse reserve development was an increase in ULAE reserves, primarily due to an increase in expected aggregate claim handling costs associated with asbestos and environmental claims. The Company provides an allowance for uncollectible reinsurance, reflecting management’s best estimate of reinsurance cessions that may be uncollectible in the future due to reinsurers’ unwillingness or inability to pay.
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. Among specific risk tolerances set by the Company, risk limits are set for natural catastrophes, terrorism risk and pandemic risk. 88 | Table of Contents Index to MD&A Part II - Item 7.
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. Among specific risk tolerances set by the Company, risk limits are set for natural catastrophes, terrorism risk and pandemic risk. 87 Table of Contents Index to MD&A Part II - Item 7.
For further discussion of these discounted liabilities, see Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements. Differences Between GAAP and Statutory Basis Reserves- As of December 31, 2024 and 2023, U.S. property and casualty insurance product reserves for losses and loss adjustment expenses, net of reinsurance recoverables, reported under U.S.
For further discussion of these discounted liabilities, see Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements. Differences Between U.S. GAAP and Statutory Basis Reserves- As of December 31, 2025 and 2024, U.S. property and casualty insurance product reserves for losses and loss adjustment expenses, net of reinsurance recoverables, reported under U.S.
For a discussion of credit losses recorded, see the Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments and ACL on Mortgage Loans sections within the Investment Portfolio Risks section of the MD&A. | CONTINGENCIES RELATING TO CORPORATE LITIGATION AND REGULATORY MATTERS Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable.
For a discussion of credit losses recorded, see the Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments and ACL on Mortgage Loans sections within the Investment Portfolio Risk section of the MD&A. Contingencies Relating to Corporate Litigation and Regulatory Matters Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable.
(“Foundation Re IV”), an independent Bermuda company registered as a special purpose insurer under the Bermuda Insurance Act 1978 and related rules and regulations.
(“Foundation Re IV”), an independent Bermuda company registered as a special purpose insurer under the Bermuda Insurance Act of 1978 and related rules and regulations.
Over the past 10 years, claim termination rates for a single incurral year have generally increased and have ranged from 7% below to 7% above current assumptions over that time period. For a single recent incurral year (such as 2024), a one percent decrease in our assumption for LTD claim termination rates would increase our reserves by $13.
Over the past 10 years, claim termination rates for a single incurral year have generally increased and have ranged from 7% below to 7% above current assumptions over that time period. For a single recent incurral year (such as 2025), a one percent decrease in our assumption for LTD claim termination rates would increase our reserves by $13.
Congress may consider a variety of proposals including a possible increase in the corporate tax rate to offset the cost of any new spending. Tax proposals and regulatory initiatives that may be considered by Congress and/or the U.S. Treasury Department could have a material effect on the Company and its insurance businesses.
Legislative and Regulatory Developments Congress may consider a variety of proposals including a possible increase in the corporate tax rate to offset the cost of any new spending. Tax proposals and regulatory initiatives that may be considered by Congress and/or the U.S. Treasury Department could have a material effect on the Company and its insurance businesses.
The remaining $0.5 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, U.S. Treasuries, and municipal bonds, that are mainly depressed because current interest rates are higher than at the respective purchase dates.
The remaining $0.3 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, U.S. Treasuries, and municipal bonds, that are mainly depressed because current interest rates are higher than at the respective purchase dates.
Shelf Registrations The Hartford filed an automatic shelf registration statement with the Securities and Exchange Commission ("the SEC") 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.
Shelf Registrations The Hartford filed an automatic shelf registration statement with the SEC 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.
These methods use historical data to generate paid and reported loss development patterns, which are then applied to cumulative paid and reported losses by accident period to estimate ultimate losses. In addition to paid and reported development methods, for the most immature accident months, the Company uses frequency/severity techniques and methods that incorporate the initial expected loss ratio ("ELR").
These methods use historical data to generate paid and reported loss development patterns, which are then applied to cumulative paid and reported losses by accident period to estimate ultimate losses. In addition to paid and reported development methods, for the most immature accident months, the Company uses frequency/severity techniques and methods that incorporate the initial ELR.
The Company also considers relevant judicial interpretations of policy language, the nature of how policy limits are enforced on multi-year policies and applicable coverage defenses or determinations, if any. The estimated liabilities of insureds and the Company’s exposure to the insureds depends heavily on an analysis of the relevant legal issues and litigation environment.
The Company also considers relevant judicial interpretations of policy language, the nature of how policy limits are enforced on multi-year policies and applicable coverage defenses or determinations, if any. The estimated liabilities of insureds and the Company’s exposure to the insureds depend heavily on an analysis of the relevant legal issues and litigation environment.
Total P&C Insurance Product Reserves Development In the opinion of management, based upon the known facts and current law, the reserves recorded for the Company’s property and casualty insurance products at December 31, 2024 represent the Company’s best estimate of its ultimate liability for unpaid losses and loss adjustment expenses.
Total P&C Insurance Product Reserves Development In the opinion of management, based upon the known facts and current law, the reserves recorded for the Company’s property and casualty insurance products at December 31, 2025 represent the Company’s best estimate of its ultimate liability for unpaid losses and loss adjustment expenses.
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 Consolidated Financial Statements. 51 | Table of Contents Index to MD&A Part II - Item 7.
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 Consolidated Financial Statements. 50 Table of Contents Index to MD&A Part II - Item 7.
For a discussion of changes to reserve estimates recorded in 2024, see Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses in the Notes to Consolidated Financial Statements. Current Trends Contributing to Reserve Uncertainty The Hartford is a multi-line company in the property and casualty insurance business.
For a discussion of changes to reserve estimates recorded in 2025, see Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses in the Notes to Consolidated Financial Statements. Current Trends Contributing to Reserve Uncertainty The Hartford is a multi-line company in the property and casualty insurance business.
Rating agencies may implement changes to their internal models that have the effect of increasing or decreasing the amount of capital we must hold in order to maintain our current ratings. 100 | Table of Contents Index to MD&A Part II - Item 7.
Rating agencies may implement changes to their internal models that have the effect of increasing or decreasing the amount of capital we must hold in order to maintain our current ratings. 99 Table of Contents Index to MD&A Part II - Item 7.
As of December 31, 2024, 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 December 31, 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.
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 Business Insurance and Personal Insurance segments, respectively. 64 | Table of Contents Index to MD&A Part II - Item 7.
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 Business Insurance and Personal Insurance segments, respectively. 63 Table of Contents Index to MD&A Part II - Item 7.
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. 39 | Table of Contents Index to MD&A Part II - Item 7.
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. 38 Table of Contents Index to MD&A Part II - Item 7.
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.
Combined ratio is the most directly comparable U.S. 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 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. 42 | Table of Contents Index to MD&A Part II - Item 7.
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. 41 Table of Contents Index to MD&A Part II - Item 7.
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.
For assets supporting pension 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.
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 Insurance, small business, and middle market lines within middle & large business, and is affected by both new business growth and policy count retention.
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 Insurance, small business, and middle market lines within middle & large business and is affected by both new business growth and retention.
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 97 | Table of Contents Index to MD&A Part II - Item 7.
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 96 Table of Contents Index to MD&A Part II - Item 7.
Expected liquidity requirements for beyond the next twelve months as of December 31, 2024: • Interest on and repayments of debt, see Note 13 - Debt of Notes to Consolidated Financial Statements. • Preferred stock and common stock dividends, subject to the discretion of the Board of Directors.
Expected liquidity requirements for beyond the next twelve months as of December 31, 2025: • Interest on and repayments of debt, see Note 13 - Debt of Notes to Consolidated Financial Statements. • Preferred stock and common stock dividends, subject to the discretion of the Board of Directors.
However, while Foundation Re IV was determined to be a VIE, the Company concluded that it did not have a variable interest in the entity, as the variability in its results, caused by the reinsurance agreement, is expected to be absorbed entirely by the investors in the catastrophe bonds issued by Foundation Re IV and residual amounts earned by it, if any, are expected to be absorbed by the equity investor (the Company has neither an equity nor a residual interest in Foundation Re IV).
However, while Foundation Re IV was determined to be a VIE, the Company concluded that it did not have a variable interest in the entity, as the variability in its results, caused by the reinsurance agreements, are expected to be absorbed entirely by the investors in the catastrophe bonds issued by Foundation Re IV and residual amounts earned by it, if any, are expected to be absorbed by the equity investor (the Company has neither an equity nor a residual interest in Foundation Re IV).
Fee income increased primarily due to a $62 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 month period.
Fee income increased primarily due to a $42 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-month period.
As of December 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.
As of December 31, 2025, 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.
If equity markets were to hypothetically decline 20% and remain depressed for one year, the estimated before tax impact on reported Hartford Funds earnings for that one year period is approximately $70 as of December 31, 2024.
If equity markets were to hypothetically decline 20% and remain depressed for one year, the estimated before tax impact on reported Hartford Funds earnings for that one year period is approximately $70 as of December 31, 2025.
The Company’s 2024, 2023 and 2022 required minimum funding contributions were immaterial. 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’s 2025, 2024 and 2023 required minimum funding contributions were immaterial. The Company does not have a 2026 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.
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. 38 | Table of Contents Index to MD&A Part II - Item 7.
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. 37 Table of Contents Index to MD&A Part II - Item 7.
The use of such swaps enables the Company to customize contract terms and conditions to desired objectives and manage the duration profile within established tolerances. As of December 31, 2024 and 2023, notional amounts pertaining to derivatives utilized to manage interest rate risk, including offsetting positions, totaled $4.6 billion and $10.1 billion, respectively, and primarily relate to hedging invested assets.
The use of such swaps enables the Company to customize contract terms and conditions to desired objectives and manage the duration profile within established tolerances. As of December 31, 2025 and 2024, notional amounts pertaining to derivatives utilized to manage interest rate risk, including offsetting positions, totaled $4.1 billion and $4.6 billion, respectively, and primarily relate to hedging invested assets.
Under the terms of the reinsurance agreement, the Company is obligated to pay annual reinsurance premiums to Foundation Re IV for the reinsurance coverage. Amounts payable to the Company under the reinsurance agreement with respect to any covered event cannot exceed the Company's actual losses from such event.
Under the terms of the reinsurance agreements, the Company is obligated to pay annual reinsurance premiums to Foundation Re IV for the reinsurance coverage. Amounts payable to the Company under the reinsurance agreements with respect to any covered event cannot exceed the Company's actual losses from such event.
The discount rate assumption is based upon an interest rate yield curve that reflects high-quality fixed income investments consistent with the maturity profile of the expected liability cash flows. The Company is exposed to the risk of having to make additional plan contributions if the plans’ investment returns, including from investments in fixed maturities, are lower than expected.
The discount rate assumption is based upon an interest rate yield curve that reflects high-quality fixed income investments consistent with the maturity profile of the expected liability cash flows. The Company is exposed to the risk of having to make additional pension plan contributions if the plan's investment returns, including from investments in fixed maturities, are lower than expected.
Underlying Loss and Loss Adjustment Expense Ratio- This non-GAAP financial measure is the cost of non-catastrophe loss and loss adjustment expenses incurred in the current accident year divided by earned premiums. The loss and loss adjustment expense ratio is the most directly comparable GAAP measure.
Underlying Loss and Loss Adjustment Expense Ratio- This non-GAAP financial measure is the cost of non-catastrophe loss and loss adjustment expenses incurred in the current accident year divided by earned premiums. The loss and loss adjustment expense ratio is the most directly comparable U.S. GAAP measure.
P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as of December 31, 2024 For descriptions of the coverages provided under the lines of business shown above, see Part I - Item1, Business.
P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as of December 31, 2025 For descriptions of the coverages provided under the lines of business shown above, see Part I - Item1, Business.
For information regarding the 2022 comprehensive annual review, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in The Hartford’s 2023 Form 10-K Annual Report.
For information regarding the 2023 comprehensive annual review, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in The Hartford’s 2024 Form 10-K Annual Report.
As of December 31, 2024 and 2023 the Company did not hold credit derivatives that purchase credit protection. Credit Risk Assumed Through Credit Derivatives The Company may also enter into credit default swaps that assume credit risk as part of replication transactions.
As of December 31, 2025 and 2024 the Company did not hold credit derivatives that purchase credit protection. Credit Risk Assumed Through Credit Derivatives The Company may also enter into credit default swaps that assume credit risk as part of replication transactions.
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. 114 | Table of Contents Index to MD&A Part II - Item 7.
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. 113 Table of Contents Index to MD&A Part II - Item 7.
The writing company with the largest coverage under FHCF is Hartford Insurance Company of the Midwest, with coverage of $35 in per event losses in excess of a $19 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] Refer to "Catastrophe Bond" discussion below for further information. [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.
For the 2025 - 2026 period, the writing company with the largest coverage under FHCF is Hartford Insurance Company of the Midwest, with coverage of $37 in per event losses in excess of a $23 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] Refer to "Catastrophe Bonds" discussion below for further information. [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.
GAAP, while under U.S. STAT goodwill is amortized over a period not to exceed 10 years and the amount of goodwill admitted as an asset is limited. • The deferred gain on retroactive reinsurance for losses ceded to the Navigators and A&E ADC agreements is recognized within a special category of surplus under U.S.
GAAP, while under U.S. STAT goodwill is amortized over a period not to exceed 10 years and the amount of goodwill admitted as an asset is limited. • The deferred gain on retroactive reinsurance for losses ceded to the A&E ADC agreement is recognized within a special category of surplus under U.S.
For discussion of the earliest of the three years included in the financial statements of the current filing, refer to Part II, Item 7, MD&A in The Hartford’s 2023 Form 10-K Annual Report.
For discussion of the earliest of the three years included in the financial statements of the current filing, refer to Part II, Item 7, MD&A in The Hartford’s 2024 Form 10-K Annual Report.
Investment strategies are developed based on a variety of factors including business needs, regulatory requirements and tax considerations. 44 | Table of Contents Index to MD&A Part II - Item 7.
Investment strategies are developed based on a variety of factors including business needs, regulatory requirements and tax considerations. 43 Table of Contents Index to MD&A Part II - Item 7.
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.
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 plans, the asset allocation mix is reviewed on a periodic basis.
See Note 13 - Debt of Notes to Consolidated Financial Statements; • $21 dividends on preferred stock, subject to the discretion of the Board of Directors; and • $605 of common stockholders' dividends, subject to the discretion of the Board of Directors and before share repurchases.
See Note 13 - Debt of Notes to Consolidated Financial Statements; • $21 dividends on preferred stock, subject to the discretion of the Board of Directors; and • $670 of common stockholders' dividends, subject to the discretion of the Board of Directors and before share repurchases.
In particular, the Company has exposure to bodily injury claims that arise from long-term or continuous exposure to harmful products or substances. Examples include, but are not limited to, pharmaceutical products, silica, talcum powder, per-and polyfluoroalkyl substances ("PFAS"), CTE exposures and lead paint.
In particular, the Company has exposure to bodily injury claims that arise from long-term or continuous exposure to harmful products or substances. Examples include, but are not limited to, pharmaceutical products, silica, talcum powder, per-and polyfluoroalkyl substances ("PFAS"),Chronic Toxic Encephalopathy ("CTE") exposures and lead paint.
Management's Discussion and Analysis of Financial Condition and Results of Operations 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.
Management's Discussion and Analysis of Financial Condition and Results of Operations Company’s pension 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.
Past examples include pharmaceutical products, silica, lead paint, sexual molestation and sexual abuse and construction defects. Additionally, social inflationary pressures, such as increased litigation funding and aggressive tactics by plaintiff attorneys, can introduce the risk of potentially increasing jury awards and an increase in the percentage of litigated claims impacting both general liability and automobile claim frequency and severity.
Past examples include pharmaceutical products, silica, lead paint, sexual molestation and sexual abuse and construction defects. Additionally, legal system abuse pressures, such as increased litigation funding and aggressive tactics by plaintiff attorneys, can introduce the risk of potentially increasing jury awards and an increase in the percentage of litigated claims impacting both general liability and automobile claim frequency and severity.
For a discussion of the Company's operating results by segment, see MD&A - Reportable Segment and Corporate Operating Summaries. 46 | Table of Contents Index to MD&A Part II - Item 7.
For a discussion of the Company's operating results by segment, see MD&A - Reportable Segment and Corporate Operating Summaries. 45 Table of Contents Index to MD&A Part II - Item 7.
For further information on the treaty, refer to Enterprise Risk Management — Insurance Risk section of this MD&A. 59 | Table of Contents Index to MD&A Part II - Item 7.
For further information on the treaty, refer to Enterprise Risk Management — Insurance Risk section of this MD&A. 58 Table of Contents Index to MD&A Part II - Item 7.
For further information on the treaty, refer to Enterprise Risk Management — Insurance Risk section of this MD&A. 61 | Table of Contents Index to MD&A Part II - Item 7.
For further information on the treaty, refer to Enterprise Risk Management — Insurance Risk section of this MD&A. 60 Table of Contents Index to MD&A Part II - Item 7.
The Company’s reporting units to which goodwill has been allocated consist of Business Insurance, Personal Insurance, Employee Benefits and Hartford Funds. The annual goodwill assessment for the reporting units was completed as of October 31, 2024, and resulted in no write-downs of goodwill for the year ended December 31, 2024.
The Company’s reporting units to which goodwill has been allocated consist of Business Insurance, Personal Insurance, Employee Benefits and Hartford Funds. The annual goodwill assessment for all reporting units was completed as of October 31, 2025, and resulted in no write-downs of goodwill for the year ended December 31, 2025.
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.
Policy count retention is also affected by advertising and rate actions taken by us and competitors. Effective Policy Count Retention- For Personal Insurance, 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.
Also, as circumstances change, the methods that are given more weight will change. 54 | Table of Contents Index to MD&A Part II - Item 7.
Also, as circumstances change, the methods that are given more weight will change. 53 Table of Contents Index to MD&A Part II - Item 7.

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