hig-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________

FORM 10-Q

____________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ______________

Commission file number 001-13958

____________________________________

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

(Exact name of registrant as specified in its charter)


Delaware						13-3317783
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

One Hartford Plaza, Hartford, Connecticut 06155

(Address of principal executive offices) (Zip Code)

(860) 547-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	HIG	The New York Stock Exchange
6.10% Senior Notes due October 1, 2041	HIG 41	The New York Stock Exchange

Depositary Shares, Each Representing a 1/1,000th Interest in a Share of 6.000% Non-Cumulative Preferred Stock, Series G, par value $0.01 per share	HIG PR G	The New York Stock Exchange

Indicate by check mark:

• whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☑

☐

• whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☑

☐

• whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

•

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

•

whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☑

As of April 24, 2024, there were outstanding 295,755,372 shares of Common Stock, $0.01 par value per share, of the registrant.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

TABLE OF CONTENTS


Item	Description	Page
	PART I. FINANCIAL INFORMATION
1.	FINANCIAL STATEMENTS
	REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	6
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023	7
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023	8
	CONDENSED CONSOLIDATED BALANCE SHEETS - AS OF MARCH 31, 2024 AND DECEMBER 31, 2023	9
	CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023	10
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023	11
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	12
	NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	12
	NOTE 2 - EARNINGS PER COMMON SHARE	12
	NOTE 3 - SEGMENT INFORMATION	13
	NOTE 4 - FAIR VALUE MEASUREMENTS	15
	NOTE 5 - INVESTMENTS	23
	NOTE 6 - DERIVATIVES	29
	NOTE 7 - PREMIUMS RECEIVABLE AND AGENTS' BALANCES	34
	NOTE 8 - REINSURANCE	35
	NOTE 9 - RESERVE FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES	37
	NOTE 10 - RESERVE FOR FUTURE POLICY BENEFITS	40
	NOTE 11 - OTHER POLICYHOLDER FUNDS AND BENEFITS PAYABLE	41
	NOTE 12 - INCOME TAXES	42
	NOTE 13 - COMMITMENTS AND CONTINGENCIES	42
	NOTE 14 - EQUITY	44
	NOTE 15 - CHANGES IN AND RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	45
	NOTE 16 - EMPLOYEE BENEFIT PLANS	47
	NOTE 17 - RESTRUCTURING AND OTHER COSTS	47
2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	48
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	[a]
4.	CONTROLS AND PROCEDURES	98
	PART II. OTHER INFORMATION
1.	LEGAL PROCEEDINGS	99
1A.	RISK FACTORS	99
2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	99
5..	OTHER INFORMATION	99
6.	EXHIBITS	100

	SIGNATURE	101

[a]The information required by this item is set forth in the Enterprise Risk Management section of Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations and is incorporated herein by reference.

Forward-looking Statements

Certain of the statements contained herein are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects,” and similar references to future periods.

Forward-looking statements are based on management's current expectations and assumptions regarding future economic, competitive, legislative and other developments and their potential effect upon The Hartford Financial Services Group, Inc. and its subsidiaries (collectively, the "Company" or "The Hartford"). Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual results could differ materially from expectations depending on the evolution of various factors, including the risks and uncertainties identified below, as well as factors described in such forward-looking statements, the Risk Factors of The Hartford's 2023 Form 10-K Annual Report, and our other filings with the Securities and Exchange Commission.

•Risks Relating to Economic, Political and Global Market Conditions:

◦challenges related to the Company’s current operating environment, including global political, economic and market conditions, and the effect of financial market disruptions, economic downturns, changes in trade regulation including tariffs and other barriers or other potentially adverse macroeconomic developments on the demand for our products and returns in our investment portfolios;

◦market risks associated with our business, including changes in credit spreads, equity prices, interest rates, inflation rate, foreign currency exchange rates and market volatility;

◦the impact on our investment portfolio if our investment portfolio is concentrated in any particular segment of the economy;

◦the impacts of changing climate and weather patterns on our businesses, operations and investment portfolio including on claims, demand and pricing of our products, the availability and cost of reinsurance, our modeling data used to evaluate and manage risks of catastrophes and severe weather events, the value of our investment portfolios and credit risk with reinsurers and other counterparties;

•Insurance Industry and Product-Related Risks:

◦the possibility of unfavorable loss development, including with respect to long-tailed exposures;

◦the significant uncertainties that limit our ability to estimate the ultimate reserves necessary for asbestos and environmental claims;

◦the possibility of another pandemic, civil unrest, earthquake, or other natural or man-made disaster that may adversely affect our businesses;

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

◦the possible occurrence of terrorist attacks and the Company’s inability to contain its exposure as a result of, among other factors, the inability to exclude coverage for terrorist attacks from workers' compensation policies and limitations on reinsurance coverage from the federal government under applicable laws;

◦the Company’s ability to effectively price its products and policies, including its ability to obtain regulatory consents to pricing actions or to non-renewal or withdrawal of certain product lines;

◦actions by competitors that may be larger or have greater financial resources than we do;

◦technological changes, including usage-based methods of determining premiums, advancements in certain emerging technologies, including machine learning, predictive analytics, “big data” analysis or other artificial intelligence functions, advancements in automotive safety features, the development of autonomous vehicles, and platforms that facilitate ride sharing;

◦the Company's ability to market, distribute and provide insurance products and investment advisory services through current and future distribution channels and advisory firms;

◦the uncertain effects of emerging claim and coverage issues;

◦political instability, politically motivated violence or civil unrest, which may increase the frequency and severity of insured losses;

◦the ongoing effects of COVID-19, including exposure to COVID-19 business interruption property claims and the possibility of a resurgence of COVID-19 related losses in Group Benefits;

•Financial Strength, Credit and Counterparty Risks:

◦risks to our business, financial position, prospects and results associated with negative rating actions or downgrades in the Company’s financial strength and credit ratings or negative rating actions or downgrades relating to our investments;

◦capital requirements which are subject to many factors, including many that are outside the Company’s control, such as National Association of Insurance Commissioners ("NAIC") risk based capital formulas, rating agency capital models, Funds at Lloyd's

and Solvency Capital Requirement, which can in turn affect our credit and financial strength ratings, cost of capital, regulatory compliance and other aspects of our business and results;

◦losses due to nonperformance or defaults by others, including credit risk with counterparties associated with investments, derivatives, premiums receivable, reinsurance recoverables and indemnifications provided by third parties in connection with previous dispositions;

◦the potential for losses due to our reinsurers' unwillingness or inability to meet their obligations under reinsurance contracts and the availability, pricing and adequacy of reinsurance to protect the Company against losses;

◦state and international regulatory limitations on the ability of the Company and certain of its subsidiaries to declare and pay dividends;

•Risks Relating to Estimates, Assumptions and Valuations:

◦risks associated with the use of analytical models in making decisions in key areas such as underwriting, pricing, capital management, reserving, investments, reinsurance and catastrophe risk management;

◦the potential for differing interpretations of the methodologies, estimations and assumptions that underlie the Company’s fair value estimates for its investments and the evaluation of intent-to-sell impairments and allowance for credit losses on available-for-sale securities and mortgage loans;

◦the potential for impairments of our goodwill;

•Strategic and Operational Risks:

◦the Company’s ability to maintain the availability of its systems and safeguard the security of its data in the event of a disaster, cyber or other information security incident or other unanticipated event;

◦the potential for difficulties arising from outsourcing and similar third-party relationships;

◦the risks, challenges and uncertainties associated with capital management plans, expense reduction initiatives and other actions;

◦risks associated with acquisitions and divestitures, including the challenges of integrating acquired companies or businesses, which may result in our inability to achieve the anticipated benefits and synergies and may result in unintended consequences;

◦difficulty in attracting and retaining talented and qualified personnel, including key employees, such as executives, managers and employees with strong technological, analytical and other specialized skills;

◦the Company’s ability to protect its intellectual property and defend against claims of infringement;

•Regulatory and Legal Risks:

◦the cost and other potential effects of increased federal, state and international regulatory and legislative developments, including those that could adversely impact the demand for the Company’s products, operating costs and required capital levels;

◦unfavorable judicial or legislative developments;

◦the impact of changes in federal, state or foreign tax laws;

◦regulatory requirements that could delay, deter or prevent a takeover attempt that stockholders might consider in their best interests; and

◦the impact of potential changes in accounting principles and related financial reporting requirements.

Any forward-looking statement made by the Company in this document speaks only as of the date of the filing of this Form 10-Q. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.


Table of Contents

Part I - Item 1. Financial Statements

Item 1.

FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

The Hartford Financial Services Group, Inc.

Hartford, Connecticut

Results of Review of Interim Financial Information

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

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

Basis for Review Results

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

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

/s/ DELOITTE & TOUCHE LLP

Hartford, Connecticut

April 25, 2024


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Operations


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



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


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




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

See Notes to Condensed Consolidated Financial Statements.


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Comprehensive Income


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

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

See Notes to Condensed Consolidated Financial Statements.


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Balance Sheets


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

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

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

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

See Notes to Condensed Consolidated Financial Statements.


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Changes in Stockholders' Equity


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

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


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

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

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


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

Preferred Shares Outstanding		13,800		13,800



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

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

See Notes to Condensed Consolidated Financial Statements.


Table of Contents

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Cash Flows


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



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


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






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


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

See Notes to Condensed Consolidated Financial Statements.


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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

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

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

Consolidation

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

Use of Estimates

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

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

Reclassifications

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

2. EARNINGS PER COMMON SHARE


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

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




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

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



Basic		$	2.51	$	1.69






Diluted		$	2.47	$	1.66


Table of Contents						Note 3 - Segment Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. SEGMENT INFORMATION

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


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


Table of Contents						Note 3 - Segment Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Revenues


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

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

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


Table of Contents						Note 3 - Segment Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Non-Insurance Revenue from Contracts with Customers


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


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

Total non-insurance revenues with customers			$	352	$	338

4. FAIR VALUE MEASUREMENTS

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

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

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

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

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


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


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

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

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

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

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

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


Table of Contents						Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


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