SERVICES FINANCIERS HARTFORD: PROTECTION DE LA GESTION ET ANALYSE ET PERFORMANCE DES CONDITIONS FINANCIÈRES (formulaire 10-K) ☎ assurance santé entreprise

De la couverture des risques de dommages subis ou bien causés à des tiers, aux garanties pour couvrir les pertes d’exploitation et les risques informatiques, contrats d’assurance, même facultatifs, peuvent s’avérer indispensables.
ll assez des fois d’un incendie ou de la livraison d’un produit défaillant pour mettre en péril la vie d’une entreprise… Si, du court point de vue juridique, seules plusieurs bâches sont obligatoires – la garantie des véhicules, la responsabilité civile et les confiance uniques de type garantie décennale pour différents secteurs d’activité -, PME et TPE ont tout intérêt à souscrire des garanties complémentaires. Au-delà du mince minimum – la garantie des biens, celle des pertes d’exploitation ou bien la responsabilité civile professionnelle -, divers contrats peuvent se révéler utiles à l’égard de l’activité de la société (informatique, chimie, transports, exercice cycliques…) ou pour son expansion à l’international. Difficile toutefois de s’y retrouver dans une offre surabondante. Parcours fléché des sept contrats indispensables à l’entreprise.

1. L’assurance des biens

Première grande catégorie d’assurances pour entreprises: la couverture des risques potentiels extérieurs. Inondation, incendie, vol menacent locaux, le matos ou les stocks. Contre ces dommages, une assurance spécifique être souscrite, non obligatoire mais néanmoins incontournable. “Attention, dans l’hypothèse ou l’entreprise est locataire de ses locaux – bureaux, usine, entrepôt- obligatoire souscrire une confiance pour couvrir les dommages liés aux biens immobiliers et sa responsabilité d’occupation. Cette obligation figure dans la loi n°89-462 du 6 juillet 1989”, avertit Damien Palandjian responsable département à la Direction des Services aux Entreprises, chez le courtier en confiance Verspieren.

En de sinistre, le chef de plan fera une déclaration à sa compagnie d’assurances dans un délai légal rappelé parmi le contrat (de de deux ans à de cinq ans jours, selon risques), même immédiatement pour les mode essentiels (incendie, catastrophe naturelle, tempête, cambriolage…). Le montant de l’indemnisation dépend alors de la valeur des biens garantis, il est pourquoi il ne faut pas oublier d’avertir son assureur lorsque le périmètre des biens à assurer évolue en cours d’année (achat de nouvelles machines, reprise d’un autre site…), ni de vérifier quels sont les dommages réellement couverts. Les sociétés qui ont une activité périodique se traduisant dans une variation importante des silo d’articles ont intérêt à faire part ces spécificité à assureur pour devenir mieux couvertes en de dommages. La valeur des fourniture est alors établie sur la base de leur montant annuel le plus important et régularisée en fin d’année.

Dans intégraux cas de figure, l’indemnisation existera versée ordinairement après présentation des factures correspondant aux réparations nécessaires ou bien à l’achat de nouvel matériels. En cas de lourd sinistre, l’assureur toutefois verser des acomptes à son client.




(Millions de dollars en millions, sauf par action, sauf indication contraire) Hartford fournit des projections et d'autres informations prospectives
après un débat riche en déclarations prospectives,
particulièrement liés à la performance financière future de la société. Ces
les perspectives futures sont des estimations basées sur les informations actuellement disponibles
qui sont à la disposition de la Société sont fabriqués conformément aux dispositions Safe Harbor de la Société
1995 Couverture de la loi sur la réforme du règlement des différends relatifs aux valeurs mobilières privées
les mises en garde figurant aux pages 4 et 5 du présent formulaire 10-K. Le vrai
les résultats sont susceptibles de différer, avec des différences importantes dans le passé
prévisions de l'entreprise basées sur les résultats de divers facteurs,
y compris, mais sans s'y limiter, ceux énoncés dans la discussion suivante et
Partie I, Section 1A, «Facteurs de risque» et ceux que nous identifions de temps à autre
d'autres applications avec Commission de sécurité et de changement. Hartford
n'assume aucune obligation de mettre à jour publiquement les déclarations prospectives,
en raison de nouvelles informations, de changements futurs ou autrement.
Sur 2019 23 mai, La Société a achevé le programme annoncé précédemment
Groupe Navigateurs, preneur d'assurance universel de spécialité pour 70 $ des actions, ou 2 137 $
milliards espèces, y compris les frais de transaction. Immédiatement après la fermeture
acquisition Groupe Navigateurs, efficace 2019 23 mai, entreprise
acquis le montant brut du contrat de réassurance pour sinistres couvrant les effets
développement ("Navigators ADC") de Compagnie nationale d'indemnisation (NICO)
Au nom de Navigators Insurance Company et certains de ses affiliés
(collectivement, «Navigateurs assureurs»). Pour plus d'informations sur
Les navigateurs d'ADC font référence au risque d'assurance dans la gestion des risques de l'entreprise
Section. Groupe Navigateurs les produits et les produits à la date d’acquisition sont
inclus dans les performances de reporting des lignes commerciales de la société
segment. Voir la note 2 - Acquisitions d'entreprises pour discuter de cette opération
notes aux états financiers consolidés
Sur 31 mai 2018, Hartford Holdings, Inc., une filiale en propriété exclusive
La Société a finalisé la vente des actions émises et impayées Hartford
Life, Inc. ("HLI"), société holding exploitant sa vie et sa rente
filiales. Voir la note 21 - Affaires pour une discussion de cette opération
Notes afférentes à la lettre financière consolidée et activités abandonnées
Déclarations.
Sur 2018 16 février, Hartford a conclu un accord de renouvellement des droits avec
échange d'agriculteurs Farmers Insurance Group, acheter
Petite entreprise commerciale de marque Premier vendue par l'intermédiaire d'agents indépendants.
Le paiement écrit de ce contrat a commencé en 2018. Au troisième trimestre.

Les informations financières historiques ont été reclassées
soumettre le rapport de gestion pour correspondre à la livraison de la période actuelle.
L'encaisse affectée a été reclassée de l'encaisse sur une ligne distincte
Bilan consolidé. Hartford définit une augmentation ou une diminution de 200% ou plus comme
"NM" ou vide de sens.
La première des trois années incluses dans les états financiers est discutée
pour les déclarations d'application actuelles, veuillez consulter la partie 2, point 7, Administration
Discussion et analyse de la situation financière et des performances
Hartford Rapport annuel 10-K 2018.
Index
Page de description
Mesures et relations d'efficacité de base 35 Hartford Opérations 40
Résultats d'exploitation consolidés 43
Résultats d'investissement 46
Estimations comptables critiques
Lignes commerciales 68
Lignes personnelles 72
Autres opérations sur actifs et pertes
Avantages sociaux 77
Fondations Hartford 79
Entreprise 81
Gestion des risques d'entreprise
Ressources en capital et liquidité
Impact des nouvelles normes comptables


PRINCIPALES ACTIVITÉS ET RELATIONS
La société estime que les outils et les relations dans cette discussion peuvent être
indicateurs clés de performance pour ses entreprises. La direction le croit
les relations et les outils sont utiles pour comprendre les tendances clés
Hartford les entreprises. Mais ces indicateurs clés de performance ne devraient être
utilisé en conjonction avec, et non à la place, des résultats fournis par SES
discussions de segment qui se poursuivent dans cette section MD et A. Ces relations et recours peuvent ne pas s'appliquer
être comparable aux autres outils de mesure du rendement utilisés par les concurrents de l'entreprise.

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Partie II – point 7. Discussion et analyse de la situation financière par la direction
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Définitions des non-PCGR et d'autres mesures et ratios
Actifs sous gestion («AUM») - comprend les fonds d'investissement et les actifs ETP. AUM est disponible
instrument utilisé dans le segment du Fonds Hartford en raison
La part des revenus des fonds communs de placement et des ETP de la société est fondée sur les actifs
valeurs. Ce revenu augmente ou diminue avec l'augmentation ou la diminution de l'actif géré, peu importe
en raison des changements du marché ou des flux nets.
La valeur comptable d'une action diluée (hors AOCI) est non-GAAP par action
une mesure calculée en divisant (a) les capitaux propres ordinaires,
hors AOCI après impôt, (b) actions ordinaires en circulation et dilutives
actions ordinaires potentielles. La société offre cette facilité aux investisseurs
d'analyser le montant de la valeur nette de la Société attribué en premier
dans les opérations commerciales de l'entreprise. La société estime que hors AOCI
off the counter est bon pour les investisseurs car il élimine
éléments qui peuvent varier considérablement d'une période à l'autre en fonction principalement de
l'évolution des taux d'intérêt. La valeur comptable d'une action diluée est directe
comparable USA La mesure PCGR.
Le ratio combiné est la somme du ratio des pertes au coût d’ajustement des pertes,
ratio de coût et ratio de dividende du preneur d'assurance. Ce rapport est relatif
une mesure décrivant la perte associée et chaque coût
100 $ des primes acquises. Un coefficient inférieur à 100 indique la distribution
profit; un score total supérieur à 100 indique une perte d'assurance.
Gains de base Hartford utilise le bénéfice de base non conforme aux PCGR comme principal bénéfice
un indicateur important de la performance de l'entreprise. Hartford croire
que les bénéfices de base fournissent aux investisseurs un précieux indicateur de performance
affaires car il révèle nos tendances en matière d'assurance
et l'activité de services financiers, qui peut être éclipsée par l'implication du réseau
effets de certains objets. Par conséquent, ces éléments ne relèvent pas du corps principal
gains:
• Certains gains et pertes en capital réalisés - Certains gains et pertes en capital réalisés

les pertes sont principalement dues aux décisions d'investissement et aux facteurs économiques externes

changements de nature et de calendrier non liés à l'assurance

et les aspects de l'activité d'assurance. En conséquence, le revenu de base est exclu

l'effet de tous les gains et pertes réalisés, qui sont généralement très différents

d'une période à l'autre en fonction des conditions du marché des capitaux. Hartford

considère cependant que certains gains et pertes en capital sont indissociables

liés à nos activités d’assurance, le revenu principal est donc réalisé net

les gains et les pertes tels que le règlement périodique net des dérivés de crédit.

Ces gains et pertes nets réalisés sont directement liés à la compensation

un élément inclus dans le compte de résultat, comme le revenu de placement net.

• les coûts d'intégration et de transaction associés à l'entreprise acquise –

Étant donné que les coûts de transaction sont engagés après l'acquisition d'une entreprise et

les coûts d'intégration sont couverts à court terme après l'acquisition,

ils ne reflètent pas les coûts de fonctionnement de l'entreprise.

• Pertes d’annulation de dette – la plupart de tous les paiements ou

primes d’offre pour rembourser la dette avant échéance, ces pertes ne sont pas

dépenses commerciales récurrentes.

• Bénéfice et perte des opérations de réassurance – Bénéfice ou perte de la réassurance

                réassurance, telle que constituée par la vente de l'entreprise ou
les provisions pour pertes dans le domaine de la réassurance ne sont pas des charges opérationnelles récurrentes de l'IAS
entreprise.

• Changements dans les réserves pour pertes après une acquisition d’entreprise – ces changements

les réserves pour pertes ne sont pas incluses dans le résultat de base car de tels changements peuvent s'être produits

obscurcir la capacité de comparer les résultats après l'acquisition avec

résultats pré-acquisition.

• Allégement de l’impôt sur le revenu sur la réduction de l’impôt différé sur le revenu

– Avantages de l'évaluation, y compris l'identification et / ou la libération des BNP

déduction basée sur des caractéristiques fiscales telles que les pertes en capital et les pertes d'exploitation nettes

les délocalisations sont rares.

• Résultats des activités abandonnées – ces résultats ne sont pas inclus dans les données de base

revenus vendus ou détenus en vue de la vente, car ces résultats

obscurcir la possibilité de comparer les résultats de la période à travers tous nos cours

les entreprises.

• Produits différés de réassurance rétroactive et ajustements ultérieurs

en produits différés – accords de réassurance rétrospectifs économiquement

transfert du risque aux réassureurs, y compris le plein bénéfice de

la réassurance rétrospective du revenu de base permet de mieux comprendre

économie d'entreprise.












En plus des composantes ci-dessus du revenu brut
pour les actionnaires non stratégiques, dividendes sur actions privilégiées
déclarés qui ne sont pas inclus dans le résultat net des actionnaires ordinaires,
sont inclus dans la détermination de vos gains primaires. Dividende sur actions privilégiées
les coûts de financement sont-ils plus similaires aux intérêts débiteurs et sont-ils probables
être une dépense récurrente jusqu'à ce que le stock souhaité soit payé.
Bénéfice net (perte nette), bénéfice net (perte nette) disponible pour les actionnaires ordinaires et revenu
des opérations en cours, hors taxes, à la disposition des actionnaires ordinaires (par le biais
périodes où la Société annonce d'importantes activités abandonnées)
directement comparable USA Les PCGR estiment le bénéfice de base. Recettes de
activités continues, gratuites, à la disposition des actionnaires ordinaires
les revenus détenus par les actionnaires ordinaires autres que les revenus (pertes)
activités abandonnées moins les taxes. Le salaire de base ne doit pas être considéré
remplacement (perte) de revenu net, total (perte) de revenu net disponible
actionnaires ou revenu (perte) des activités poursuivies, net d'impôt
pour les actionnaires ordinaires et ne reflète pas la rentabilité brute
Affaires de l'entreprise. Par conséquent Hartford le trouve utile
les investisseurs doivent estimer le revenu net (perte nette), le revenu net (perte)
actionnaires, revenu (perte) des activités poursuivies, aucun impôt, disponible
les actionnaires ordinaires et les principaux bénéfices de l'examen des performances de l'entreprise.

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Partie II – point 7. Discussion et analyse de la situation financière par la direction
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                                                                    Ajuster le revenu net aux gains de base
                                                                                                                                                                                                                                                            Pour l'exercice clos le 31 décembre.
2019 2018 2017
Bénéfice (perte) net                                          2 085 $1 807 $USD (3 131)
Dividende sur actions privilégiées 21 6 -
Bénéfice net (perte nette) des actionnaires ordinaires    1 801 $USD (3 131)
Changements dans le rapprochement du revenu brut ordinaire
actionnaires jusqu’au bénéfice de base:
Pertes (gains) en capital nettes réalisées, non incluses dans le capital
résultat avant impôt (389) 118 (160)
Perte de dette avant impôt 90 6 -
Perte sur opérations de réassurance avant impôts 91 - -
Convention de retraite avant impôt -      

– 750
Coûts d'intégration et de transaction associés à l'acquisition
affaires avant impôt

                                                                                                                                                                                                91 47 17
Variation des provisions pour pertes après acquisition d'entreprise, 97 - -
avant impôt
Variation des revenus différés de réassurance à 16 - -

taxe




Charge (allègement) d'impôt sur le résultat (1) 2 (75) 669
Perte (résultat) des activités abandonnées - (322) 2869
Gains de base                                              2 062 $1 575 $1 014 $

(1) Comprend un allégement fiscal sur les éléments non inclus dans le salaire de base et autres

incitatifs et frais d'impôt fédéral sur le revenu, y compris 877 $ impôt en 2017

principalement en raison de la diminution des actifs d'impôts différés nets due à:

Réduction du taux de l'impôt fédéral sur le revenu de 35% à 21%.












Marge bénéficiaire de base Hartford utilise le bénéfice de base estimé non conforme aux PCGR
mesure de la marge et le considérer comme une mesure importante du groupe
Avantage pour les performances du segment. La marge bénéficiaire de base est calculée par:
division du résultat de base par le résultat, hors rachats et gains réalisés
(perte). Le résultat net est directement comparable USA La mesure PCGR.
La société estime que les marges bénéficiaires de base procurent aux investisseurs:
avantages précieux de l'avantage collectif car il révèle les tendances
dans une entreprise qui peut être éclipsée par le rachat et les bénéfices réalisés
(perte) et autres éléments non inclus dans le calcul du bénéfice de base.
L'écart de revenu de base ne doit pas être considéré comme un substitut au revenu net
et ne reflète pas la rentabilité globale de l’avantage collectif.
Par conséquent, la Société estime qu'il est important pour les investisseurs d'évaluer à la fois
marge opérationnelle et marge bénéficiaire nette. Un
le rapprochement du résultat net et du résultat net est présenté dans le Groupe
Résumé de l'activité des avantages.
Le taux de catastrophe pour les années d'accidents en cours est la proportion des pertes par rapport aux pertes
rapport des coûts d'ajustement, taux de sinistre
au cours de l'année en cours (nette de réassurance) à concurrence du montant des primes acquises. Pour USA
événements, la catastrophe est l'événement qui provoque $ 25 ou plus dans l'industrie assurée
pertes de biens et affecte un grand nombre de biens et de pertes
preneurs d'assurance et assureurs tels que définis
Sang. L’approche de l’entreprise vis-à-vis des événements internationaux est similaire,
en partie comme Lloyd de Londres décrit les catastrophes. Lloyd de Londres est
marché mondial de l'assurance (Lloyd & # 39; s). Lloyd ne fait pas ça
prendre des risques. La société assume les risques en tant que membre unique de Lloyd & # 39; s
Syndicat 1221 ("Lloyd's Syndicate"). Catastrophe de l'année en cours
Ce ratio comprend, mais n'inclut pas, les effets des pertes catastrophiques
versements de remboursement.

Ratio de dépenses - Pour les segments de distribution de lignes commerciales et de segments personnels
Les lignes sont le rapport des coûts d'assurance moins les recettes fiscales aux primes acquises.
Les frais d'assurance comprennent l'amortissement de l'acquisition d'une police différée
("DAC") et les dépenses et dépenses d’assurances, y compris certains
coûts de service centralisés et créances irrécouvrables. Le CAD comprend les commissions, les frais,
licences et redevances et autres frais de distribution directs accessoires
amorti sur la police.
Le ratio des charges pour les avantages collectifs est exprimé comme le ratio d'assurance
les charges d'exploitation et autres dépenses, y compris l'amortissement des actifs incorporels; et
Amortissement par le CAD des contributions et des montants hors remboursement
contributions.
Le ratio des coûts pour les lignes commerciales, les lignes personnelles et les avantages collectifs est le suivant
l'intégration et les autres coûts liés aux transactions sont exclus
entreprise.
Les recettes fiscales dépendent principalement des montants gagnés dans le cadre du contrat
des pourcentages définis d'actifs sous gestion dans nos activités de fonds Hartford.
Ces frais sont généralement gagnés tous les jours. Par conséquent, la croissance
actifs via des flux nets positifs ou un marché favorable
la performance aura un impact positif sur les recettes fiscales. Au contraire
des flux nets négatifs ou des résultats de marché défavorables réduiront les recettes fiscales.
Le ratio des coûts de sinistres sur sinistres est une mesure du coût des sinistres encourus
divisé par la prime acquise au cours de l'année civile et comprend les pertes et les pertes
les frais d'ajustement engagés au cours des années en cours et précédentes de l'accident.
Entre autres facteurs, le rapport coût de sinistre / coût de sinistre est requis
Pour cibler le ROE, la société fluctue d'année en année en fonction
l'évolution du retour sur investissement attendu au cours de la période d'indemnisation,

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Partie II – point 7. Discussion et analyse de la situation financière par la direction
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règlement prévu des réclamations et rendement cible déterminé par la direction
basé sur l'environnement concurrentiel.
Le rapport des pertes au coût d’ajustement des pertes dépend de la fréquence des dommages et
exigeant de la rigueur, surtout lorsque l'activité immobilière est plus courte;
la fréquence et la gravité des réclamations sont indicatives fiables et plausibles
des pertes finales. La fréquence des réclamations représente la variation en pourcentage
nombre moyen de réclamations signalées par unité d'exposition pendant l'accident en cours
années par rapport aux accidents précédents. La gravité du procès révèle
variation en pourcentage du coût moyen estimé par sinistre au niveau actuel
années d'accident par rapport aux années d'accidents précédents. Comme l'un des
facteurs utilisés pour déterminer les prix, la pratique de la société est principalement compilée
une hypothèse générale sur la fréquence et la gravité des déclarations dans une ligne donnée
entreprise, puis, dans le cadre du processus de tarification, ajuster l'hypothèse
adapté à une condition, un produit ou un type de couverture spécifique.
Ratio de perte / ajustement de perte avant et après catastrophes Un accident
Développement de l'année- mesure des pertes et des coûts liés aux catastrophes
les frais d'ajustement engagés dans l'année en cours de l'accident divisés par les gains
contributions. La direction tient compte des pertes et des pertes actuelles
le ratio des coûts d’ajustement avant les catastrophes est la mesure du rendement qui est
bénéfique pour les investisseurs en éliminant les effets volatils et imprévisibles
les pertes dues aux catastrophes et l'évolution des années de crash précédentes.
Le ratio de sinistralité, hors rachats, est utilisé dans le segment des prestations collectives et est
exprimé en rapport entre les avantages, les pertes et les frais de règlement par
primes et autres circonstances, à l'exception du remboursement des primes. Du groupe
Les avantages sociaux occasionnellement achèteront un ensemble de réclamations pour le montant de la contribution spécifiée,
La Société n’inclut pas ce ratio de remboursement des pertes utilisé dans l’évaluation
la rentabilité de l'entreprise car le remboursement peut fausser le taux de perte. Rachat
primes signifie la prise en charge de passifs impayés et d'autres passifs exceptionnels
les montants des contributions.
Fonds commun de placement et les actifs des produits négociés en bourse sont détenus
ces produits, pas la Société, et en tant que tels ne sont pas reflétés
États financiers consolidés de la Société, sauf
La société sème de nouveaux produits d'investissement et envisage un investissement dans le fonds
période de temps. La SICAV et les actifs d'ETP sont utilisés par la Société
cela est principalement dû à la part importante des segments du Fonds Hartford
le revenu est basé sur la valeur de la propriété. Ce revenu augmente ou diminue, un
L'augmentation ou la chute de l'actif sous gestion en raison des changements du marché ou du réseau
écoulement.
New Business Written Premium - Affiche le montant des primes
polices émises à des clients qui n'étaient pas assurés auprès de l'entreprise
mandat précédent. Nouvelle politique d'acompte et de renouvellement des affaires écrite
la prime est égale à la prime cosignée.
Politique actuelle - Indique combien de politiques sont en place à partir de maintenant
fin de période. Le nombre de politiques en place est une mesure de la croissance
utilisé pour les lignes personnelles et les lignes commerciales standard (petites
lignes moyennes à grandes et moyennes entreprises) au sein des lignes commerciales
et a des implications à la fois sur la croissance des nouvelles entreprises et sur le maintien des politiques.

Premium Retention est un bonus de mise à niveau écrit pendant la période en cours
divisé par le montant total des primes souscrites au cours de la période précédente.
Le maintien du nombre de politiques est le rapport du nombre de stratégies mises à jour
divisé par le nombre de stratégies à mettre à jour.
le nombre de stratégies pouvant être mises à jour représente la politique moins
toute annulation effectuée pendant la durée d'assurance précédente. Gérer les numéros de police
de nombreux facteurs l'influencent, notamment le pourcentage de politiques de renouvellement
citations faites par l'entreprise et les décisions de ne pas étendre la politique concernant
concernant une couverture d'assurance spécifique ou la décision de réduire la prime
écrit dans certaines classes ou états d'affaires. Le maintien d'un numéro de police est
la publicité et les prix des concurrents sont également affectés.
Ratio de dividendes du preneur d'assurance - Le rapport entre le dividende du preneur d'assurance et l'argent gagné
bonus.
Ratio sinistre / sinistre pour les années d'accident antérieures -
augmentation / diminution des effets de catastrophe prévus, et
sinistres en cas de sinistre survenus au cours des années précédentes d'accidents
année civile en cours divisée par les primes acquises.
Les primes de recouvrement correspondent à la prime transférée supplémentaire payée
rétablissement du montant réduit de la couverture de réassurance qui en résulte
pertes pour les réassureurs.
Renouvellement des augmentations (diminutions) des gains - Les primes signées sont acquises
une durée de contrat de six mois pour une entreprise de voitures particulières
et douze mois pour la quasi-totalité du reste de la société
Immobilier et affaires de perte. Parce que l'entreprise fait des primes entre six et
date d'expiration de la police de douze mois avec renouvellement du prix gagné
(diminution) décalage de la hausse (diminution) du prix écrit de six à
douze mois.
Mise à jour - Une augmentation (diminution) de prix écrite - pour les lignes commerciales signifie
l'effet combiné des changements de taux, de la couverture d'assurance et de la tarification du risque individuel
positionner les décisions par unité de politique commerciale standard
mis à jour. La mise à jour des prix des lignes personnelles par écrit augmente le montant
modification des primes par rapport à l'année dernière pour les polices mises à jour
et comprend l'effet combiné des changements de taux, de la somme assurée et d'autres influences
changements dans l'exposition. D'autres changements de lignage dans l'impact comprennent, mais
ne se limite pas aux conducteurs, véhicules et
les incidents ainsi que les changements dans les politiques électorales des clients tels que les déductions
et les limites. La composante taux représente le changement de taux fourni avec et
Le montant approuvé par les ARN et l'assurance pendant la période
indique un changement dans la valeur d'une base de notation telle qu'un modèle
symbole de voiture / année, les coûts de remplacement du bâtiment sur la propriété et
l'inflation des salaires pour indemniser les travailleurs. La mise à niveau est déterminée par plusieurs facteurs
augmentations / diminutions de prix écrites, y compris le coût estimatif des pertes, comme prévu
actuaires des prix des entreprises, demandes de prix approuvées par les autorités réglementaires nationales,
Assureurs de sociétés et décisions de sélection des risques de marché
rivalité. Les changements de prix écrits mis à jour reflètent les biens et les dommages
cycle du marché de l'assurance. Les prix d'une ligne particulière augmentent généralement
entreprise

38
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Partie II – point 7. Discussion et analyse de la situation financière par la direction
et résultats d'exploitation








lorsque les compagnies d'assurance ont subi de lourdes pertes sur cette ligne
affaires dans un passé récent ou l'industrie dans son ensemble engage moins
capital pour la rédaction de postes dans cette entreprise. Les prix ont tendance à baisser
lorsque la perte la plus récente a été favorable ou lorsque la concurrence entre
le nombre de compagnies d'assurance augmente. Des statistiques de prix écrites mises à jour doivent être appliquées
les changements d'une période à l'autre en fonction d'un certain nombre de facteurs, y compris les changements
les estimations actuarielles et les effets des annulations et des non-renouvellements ultérieurs,
et les modifications apportées pour mieux refléter le prix final atteint.
Rendement des actifs (ROA), revenus de base - L'entreprise utilise ce non-GAAP
instrument financier pour l’évaluer et le considère comme un outil important
Performance du segment Hartford Fund. RoA, calcule le salaire de base
en divisant votre revenu de base annuel par votre encaissement moyen quotidien. Le ROA est le plus
directement comparable USA La mesure PCGR. La société considère le ROA, le principal
le revenu offre aux investisseurs un score BGP précieux
Segment Hartford Fund qui révèle nos tendances commerciales
obscurci par l'impact des éléments non inclus dans vos revenus primaires.
Le ROA, revenu de base, ne doit pas être considéré comme un substitut au ROA, et
ne reflète pas la rentabilité globale des activités du Fonds Hartford. Par conséquent,
La société estime qu'il est important pour les investisseurs de valoriser le ROA et
ROA, bénéfice de base pour l'examen des résultats du segment Fonds Hartford. Un
après alignement du ROA sur le ROA, les principaux bénéfices sont indiqués
Rapport de gestion de la division des opérations - Hartford Fund.
Le ratio combiné de base est une mesure de prise de risques financiers non conforme aux PCGR
les résultats montrent le ratio global avant catastrophes, années précédentes de l'accident
variations et variations actuelles des provisions pour sinistres après acquisition
entreprise. Le facteur combiné est une mesure directement comparable des PCGR.
le rapport total de base implique

le rapport du nombre total d’années d’accident en cours, à l’exclusion de l’effet de la
catastrophe et modification des réserves de sinistres pour l'année en cours
après avoir acquis une entreprise. La société estime que ce ratio est important
une mesure de la tendance de la rentabilité car elle élimine les influences volatiles
et les pertes dues aux catastrophes imprévisibles et les années d'accidents précédents
développement de la réserve pour frais d'ajustement. Changements dans les réserves pour pertes
l'acquisition d'entreprises n'est pas incluse dans le ratio combiné principal, car
ces changements peuvent masquer la capacité de comparer les résultats entre les périodes
acquisition par périodes antérieures à l’acquisition, ces tendances étant
précieux pour la capacité de nos investisseurs à évaluer les capacités financières de la Société
performance. La combinaison du rapport de combinaison avec le rapport de combinaison de base est
décrites dans les résumés d'exploitation des lignes commerciales et personnelles.
Bénéfice (perte) d'assurance Hartford la direction apprécie
segments de lignes commerciales et personnelles basés notamment sur:
profit ou perte d'assurance. Le profit (la perte) de la couverture d'assurance n'est pas conforme aux PCGR avant impôt
une mesure qui reflète les primes acquises moins les pertes subies, l'ajustement des pertes
frais et frais d'abonnement. Le revenu net (perte nette) est direct
une mesure similaire des PCGR. Elle influence significativement l'augmentation du risque (pertes) d'assurance
gagné la croissance des primes et Hartford prix. Assurances
la rentabilité est également considérablement influencée au fil du temps Hartford
discipline d'assurance alors que la direction s'efforce de gérer le risque de perte
gère efficacement grâce à une sélection et une diversification des risques favorables
les réclamations, le recours à la réassurance et la capacité de gérer vos dépenses. Hartford
Estime qu'un instrument garantissant les bénéfices offre aux investisseurs:
une mesure précieuse de la rentabilité avant impôt de la couverture d'assurance
activités gérées séparément des investissements de la Société
activités.

39
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Partie II – point 7. Discussion et analyse de la situation financière par la direction
et résultats d'exploitation

                                                Ajuster le bénéfice net pour augmenter le risque (la perte)
Derrière 

l'année est finie 31 décembre,

                                                                                                                                                                                                                                                                2019 2018 2017
Lignes commerciales
Revenu net                                                 1 192 $1212 $865 $
Ajustements pour rapprochement du bénéfice net et de la prise de risque
(perte):
Résultat net d'exploitation (2) (2) (1)
Produit net des placements (1129) (997) (949)
Pertes en capital (bénéfice) nettes réalisées (271) 43 (103)
Autres dépenses (recettes) 38 2 (1)
Perte sur opération de réassurance 91 - -
Charge d'impôt sur le résultat 270267377
Bénéfice de la souscription                                          189 $525 $188 $
                                           Lignes personnelles
Bénéfice (perte) net                                          318 $USD (32)USD (9)
Ajustements pour rapprochement du bénéfice net et de la prise de risque
(perte):
Résultat net d'exploitation (13) (16) (16)
Produit net des placements (179) (155) (141)
Pertes en capital (bénéfice) nettes réalisées (43) 7 (15)
Autres dépenses (recettes) 1 1 (1)
Charge (avantage) d'impôt sur le résultat 76 (19) 26
Revenus (pertes) d'assurance                                   160 $USD (214)USD (156)


Contributions écrites et gagnées - Les contributions signées représentent le montant des contributions
imposable pour la police émise au cours de l'exercice, nette de réassurance.
Les contributions sont considérées comme gagnées et incluses dans les résultats financiers
proportionnellement tout au long de la période d'assurance. La direction considère le bonus signé
est un indicateur de performance qui profite aux investisseurs car il reflète la situation actuelle
Tendances des ventes de produits d'assurance IARD de la société.
Les primes souscrites et acquises sont comptabilisées nettes des primes de réassurance transférées.
Produits d'assurance vie et invalidité traditionnels comme à vendre
Avantages collectifs, collecter les primes auprès des assurés en échange de
protéger le preneur d'assurance contre les pertes assurées spécifiées telles que le décès
ou handicap. Ces primes, ainsi que le revenu net de placement gagné, sont
utilisé pour payer les obligations contractuelles en vertu de ces polices d'assurance. Deux
facteurs clés, nouvelles ventes et constance, affectant la croissance des primes. Les ventes peuvent
augmenter ou diminuer au cours d'une année donnée en fonction de nombreux facteurs, notamment
au-delà de la limitation de la demande des clients pour les produits proposés par l'entreprise,
la concurrence, les canaux de distribution, la réputation et les notations de la Société.
La persistance signifie depuis 2010. Pourcentage de la prime actuelle
année après année. HARTFORD OPÉRATIONS
Présentation Hartford est principalement actif dans cinq segments de reporting, dont
Commercial Lines, Personal Lines, Property &

Casualty Other Operations, Group Benefits and Hartford Funds, as well as a
Corporate category. The Company includes in the Corporate category discontinued
operations related to the life and annuity business sold in May 2018, reserves
for run-off structured settlement and terminal funding agreement liabilities,
capital raising activities (including equity financing, debt financing and
related interest expense), transaction expenses incurred in connection with an
acquisition, purchase accounting adjustments related to goodwill and other
expenses not allocated to the reporting segments. Corporate also includes
investment management fees and expenses related to managing third party
business, including management of the invested assets of Talcott Resolution
Life, Inc. and its subsidiaries ("Talcott Resolution"). Talcott Resolution is
the holding company of the life and annuity business that we sold in May 2018.
In addition, Corporate includes a 9.7% ownership interest in the legal entity
that acquired the life and annuity business sold.
The Company derives its revenues principally from: (a) premiums earned for
insurance coverage provided to insureds; (b) management fees on mutual fund and
ETP assets; (c) net investment income; (d) fees earned for services provided to
third parties; and (e) net realized capital gains and losses. Premiums charged
for insurance coverage are earned principally on a pro rata basis over the terms
of the related policies in-force.
The profitability of the Company's property and casualty insurance businesses
over time is greatly influenced by the Company's underwriting discipline, which
seeks to manage exposure to loss through favorable risk selection and
diversification, its management of claims, its use of reinsurance, the size of
its in force block, actual mortality and morbidity experience, and its ability
to manage its expense ratio which it

                                       40
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








accomplishes through economies of scale and its management of acquisition costs
and other underwriting expenses. Pricing adequacy depends on a number of
factors, including the ability to obtain regulatory approval for rate changes,
proper evaluation of underwriting risks, the ability to project future loss cost
frequency and severity based on historical loss experience adjusted for known
trends, the Company's response to rate actions taken by competitors, its expense
levels and expectations about regulatory and legal developments. The Company
seeks to price its insurance policies such that insurance premiums and future
net investment income earned on premiums received will cover underwriting
expenses and the ultimate cost of paying claims reported on the policies and
provide for a profit margin. For many of its insurance products, the Company is
required to obtain approval for its premium rates from state insurance
departments and the Lloyd's Syndicate's ability to write business is subject to
Lloyd's approval for its premium capacity each year.
Similar to Property & Casualty, profitability of the Group Benefits business
depends, in large part, on the ability to evaluate and price risks appropriately
and make reliable estimates of mortality, morbidity, disability and longevity.
To manage the pricing risk, Group Benefits generally offers term insurance
policies, allowing for the adjustment of rates or policy terms in order to
minimize the adverse effect of market trends, loss costs, declining interest
rates and other factors. However, as policies are typically sold with rate
guarantees of up to three years, pricing for the Company's products could prove
to be inadequate if loss and expense trends emerge adversely during the rate
guarantee period or if investment returns are lower than expected at the time
the products were sold. For some of its products, the Company is required to
obtain approval for its premium rates from state insurance departments. New and
renewal business for group benefits business, particularly for long-term
disability, are priced using an assumption about expected investment yields over
time. While the Company employs asset-liability duration matching strategies to
mitigate risk and may use interest-rate sensitive derivatives to hedge its
exposure in the Group Benefits investment portfolio, cash flow patterns related
to the payment of benefits and claims are uncertain and actual investment yields
could differ significantly from expected investment yields, affecting
profitability of the business. In addition to appropriately

evaluating and pricing risks, the profitability of the Group Benefits business
depends on other factors, including the Company's response to pricing decisions
and other actions taken by competitors, its ability to offer voluntary products
and self-service capabilities, the persistency of its sold business and its
ability to manage its expenses which it seeks to achieve through economies of
scale and operating efficiencies.
The financial results of the Company's mutual fund and ETP businesses depend
largely on the amount of assets under management and the level of fees charged
based, in part, on asset share class and product type. Changes in assets under
management are driven by two main factors, net flows, and the market return of
the funds, which are heavily influenced by the return realized in the equity and
bond markets. Net flows are comprised of new sales less redemptions by mutual
fund and ETP shareholders. Financial results are highly correlated to the growth
in assets under management since these products generally earn fee income on a
daily basis.
The investment return, or yield, on invested assets is an important element of
the Company's earnings since insurance products are priced with the assumption
that premiums received can be invested for a period of time before benefits,
losses and loss adjustment expenses are paid. Due to the need to maintain
sufficient liquidity to satisfy claim obligations, the majority of the Company's
invested assets have been held in available-for-sale securities, including,
among other asset classes, corporate bonds, municipal bonds, government debt,
short-term debt, mortgage-backed securities, asset-backed securities and
collateralized loan obligations.
The primary investment objective for the Company is to maximize economic value,
consistent with acceptable risk parameters, including the management of credit
risk and interest rate sensitivity of invested assets, while generating
sufficient net of tax income to meet policyholder and corporate obligations.
Investment strategies are developed based on a variety of factors including
business needs, regulatory requirements and tax considerations.
For further information on the Company's reporting segments, refer to Part I,
Item 1, Business - Reporting Segments.

41
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Part II - Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

                           2019 Financial Highlights
                              Net Income Available to
 Net Income Available to      Common Stockholders per
   Common Stockholders             Diluted Share          Book Value per Diluted Share


                ((Image Removed: chart-92839953ed81e90fb1c.jpg))
                ((Image Removed: chart-6904980ff07ed739662.jpg))
                ((Image Removed: chart-5701fa5ab521d8d72d3.jpg))
 Ý    Increased $263 or 15%      Ý   Increased $0.71 or 14%      Ý   Increased $8.79 or 25%
 +  Higher net investment        +  Increase in net income       +  Increase in common
    income and net realized                                         stockholders' equity
    capital gains in 2019                                           resulting primarily from
                                                                    an increase in AOCI,
                                 -  Marginal increase in            largely driven by the
                                    dilutive shares from the        impact of lower interest
                                    prior year                      rates and tighter credit
                                                                    spreads on unrealized
 +  Lower current accident                                          capital gains (losses)
    year catastrophe losses
    in Personal Lines

 +  Lower group disability
    loss ratio
 -  Lower discontinued                                           +  Net income in excess of
    operations income                                               stockholder dividends
 -  Lower non-catastrophe
    current accident year P&C
    underwriting results                                         -  Marginal increase in
                                                                    dilutive shares from the
                                                                    prior year
 -  Loss on reinsurance and
    reserve increases due to
    Navigators Group
    acquisition and higher
    loss on debt
    extinguishment and
    integration costs


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

((Image Removed: chart-1f3152c678236f32850.jpg))((Image Removed: chart-d51e5c4c43e95a71c30.jpg))((Image Removed: chart-d250cd446ecffc390d1.jpg))

    Ý      Increased 10 bps         Þ     Improved 0.6 points       Ý    Increased 3.2 points
 +  Higher returns on equity     -  Lower current accident       +  Lower group disability
    fund investments                year catastrophes               loss ratio
                                                                 +  Change to net realized
 +  Greater returns on           +  Higher expense ratio            capital gains in 2019
    limited partnerships and
    other alternative            +  Lower level of net           -  Higher commission rates
    investments                     favorable prior accident        on voluntary products
                                    year development
 +  Higher mortgage loan
    prepayment penalties         +  Higher Navigators Group      -  Greater operating
                                    loss ratio, higher              expenses due to
                                    non-catastrophe property        investments in technology
 -  Lower reinvestment rates        losses and a higher             and claims operations
                                    workers' compensation
                                    loss ratio, partially
                                    offset by a lower
                                    Personal Lines auto loss
                                    ratio



42
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

CONSOLIDATED RESULTS OF OPERATIONS








The Consolidated Results of Operations should be read in conjunction with the
Company's Consolidated Financial Statements and the related Notes beginning on
page F-1 as well as with the segment operating results sections of the MD&A.
                       Consolidated Results of Operations

Increase (Decrease) Increase (Decrease)

                                                                                                                                                                                2019       2018       2017      From 2018 to 2019      From 2017 to 2018
Earned premiums                          $ 16,923$ 15,869$ 14,141   $         1,054        $         1,728
Fee income                                  1,301      1,313      1,168               (12 )                  145
Net investment income                       1,951      1,780      1,603               171                    177
Net realized capital gains (losses)           395       (112 )      165               507                   (277 )
Other revenues                                170        105         85                65                     20
Total revenues                             20,740     18,955     17,162             1,785                  1,793
Benefits, losses and loss adjustment
expenses                                   11,472     11,165     10,174               307                    991
Amortization of deferred policy
acquisition costs                           1,622      1,384      1,372               238                     12
Insurance operating costs and other
expenses                                    4,580      4,281      4,563               299                   (282 )
Loss on extinguishment of debt                 90          6          -                84                      6
Loss on reinsurance transactions               91          -          -                91                      -
Interest expense                              259        298        316               (39 )                  (18 )

Amortization of other intangible assets 66 68 14

                                                (2 )                   54

Total benefits, losses and expenses 18,180 17,202 16,439

                                            978                    763
Income from continuing operations,
before tax                                  2,560      1,753        723               807                  1,030
 Income tax expense                           475        268        985               207                   (717 )
Income (loss) from continuing
operations, net of tax                      2,085      1,485       (262 )             600                  1,747
Income (loss) from discontinued
operations, net of tax                          -        322     (2,869 )            (322 )                3,191
Net income (loss)                           2,085      1,807     (3,131 )             278                  4,938
Preferred stock dividends                      21          6          -                15                      6
Net income (loss) available to common
stockholders                             $  2,064$  1,801$ (3,131 ) Dollars 

263 $ 4,932












Year ended December 31, 2019 compared to year ended December 31, 2018
Net income available to common stockholders increased by $263 driven by an
increase in income from continuing operations, partially offset by a reduction
in income from discontinued operations due to the sale in May 2018 of the life
and annuity business. Income from continuing operations, net of tax, increased
auteur $600 primarily












due to a change to net realized capital gains in 2019 compared to net realized
capital losses in 2018, lower current accident year catastrophe losses in P&C,
higher net investment income, and a lower disability loss ratio in Group
Benefits, partially offset by a loss on reinsurance and reserve increases upon
the acquisition of Navigators Group, lower current accident year P&C
underwriting results before catastrophes, a higher loss on extinguishment of
debt in 2019 and higher integration costs.

43
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








Revenue
                                Earned Premiums
                ((Image Removed: chart-03fa6f0e9677691e65f.jpg))

(1) For 2019, the total includes $10 recorded in Corporate other revenue.

Year ended December 31, 2019 compared to year ended December 31, 2018
Earned premiums increased primarily due to:
• An increase in Property and Casualty reflecting an 18% increase in Commercial

Lines, including the effect of the Navigators Group acquisition, partially

offset by a 6% decline in Personal Lines.

• Group Benefits was relatively flat as the increase in group disability and

the higher premium from voluntary products was largely offset by a decrease

in group life.












For a discussion of the Company's operating results by segment, see MD&A -
Segment Operating Summaries.
Fee income decreased due to:
• Lower fee income in Hartford Funds largely due to a shift to lower fee funds.


• Partially offset by higher fee income in Corporate resulting from fees earned

on the management of the investment portfolio of the life and annuity

business sold in May 2018 and higher fee income in Group Benefits related to

    
    
    
    an increase related to the leave management product and higher persistency.





                             Net Investment Income
                ((Image Removed: chart-ff4eb7b68e4acc1bae9.jpg))

Year ended December 31, 2019 compared to year ended December 31, 2018
Net investment income increased primarily due to:
• A higher level of invested assets, primarily due to the acquisition of

Navigators Group.

• Higher income from limited partnerships and other alternative investments,

higher returns on equity fund investments, and greater income from

pre-payment penalties on mortgage loans.












For further discussion of investment results, see MD&A - Investment Results, Net
Investment Income.
Net realized capital gains improved compared to net realized capital losses in
2018, with gains in 2019 primarily driven by:
•   Appreciation in the value of equity securities due to higher equity market

levels.

• Higher net gains on sales in 2019 of fixed maturity securities driven by

duration and credit management trades.

For further discussion of investment results, see MD&A – Investment Results, Net
Realized Capital Gains.

                                                                                                                                                            44
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Benefits, losses and expenses

                                                                                    Losses and LAE Incurred for P&C and GB
                ((Image Removed: chart-e57f0167fb826fc59ff.jpg))

(1) Prior accident year development in 2019 included reserve increases of $84 à cause de

legacy Navigators Group reserves.

Year ended December 31, 2019 compared to year ended December 31, 2018
Benefits, losses and loss adjustment expenses increased due to:
• An increase in incurred losses for Property & Casualty which was driven by an

increase in Commercial Lines, partially offset by a decrease in Personal

Lines, and was driven by:

– An increase in Property & Casualty current accident year ("CAY") loss and

loss adjustment expenses before catastrophes due to the effect of higher

earned premium in Commercial Lines, including the impact of the Navigators

Group acquisition, and higher non-catastrophe property losses, partially

                            offset by a lower personal auto liability loss ratio and the effect of
       lower earned premium in Personal Lines.


-      A decrease in favorable net prior accident year reserve development of
       $102, before tax. Prior accident year development in 2019 primarily

included reserve decreases for workers' compensation, small commercial

package business, catastrophes, personal lines automobile liability, and

uncollectible reinsurance, partially offset by increases in general

liability and professional liability, including increases in Navigators

Group reserves upon acquisition of the business, and commercial lines

automobile liability. Prior accident year development in 2018 primarily

included a decrease in reserves for workers' compensation and a decrease

in catastrophe reserves for the 2017 hurricanes. For further discussion,

see MD&A – Critical Accounting Estimates, Property & Casualty Insurance

Product Reserves, Net of Reinsurance.

– A decline in current accident year catastrophe losses of $358, before tax.

Catastrophe losses in 2019 were
















primarily from tornado, wind and hail events in the South, Midwest and Mountain
West and winter storms across the country as well as from hurricanes and
tropical storms in the Southeast. Catastrophe losses in 2018 were primarily from
wildfires in California, hurricanes Florence and Michael in the Southeast, wind
and hail storms in Colorado, and various wind storms and winter storms across
the country and are net of an estimated reinsurance recoverable of $82 under the
2018 Property Aggregate reinsurance treaty. For additional information, see MD&A
- Critical Accounting Estimates, Property & Casualty Insurance Product Reserves,
Net of Reinsurance.
•   Partially offsetting the increase in Property & Casualty was a decrease in

Group Benefits driven by a lower group disability loss ratio and more

favorable prior incurral year development.












Amortization of deferred policy acquisition costs was up from the prior year
period primarily due to:
•   An increase in Commercial Lines, including the impact from the Navigators
    Group acquisition and the effect of higher commissions, and an increase in
    Group Benefits, partially offset by a decrease in Personal Lines.

Insurance operating costs and other expenses increased due to:
• Higher commissions in Commercial Lines and, to a lesser extent, Group

Benefits.

• Higher information technology and operations costs across Commercial Lines,

Personal Lines, and Group Benefits.

• Transaction costs, integration costs and operating costs incurred in the

                current year due to the Navigators Group acquisition.



45
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

• An increase in direct marketing expenses in Personal Lines to generate new

business growth.

• Partially offset by a decrease in Hartford Funds due to lower variable costs.
















Income tax expense increased primarily due to:
• An increase in income from continuing operations before tax.


For further discussion of income taxes, see Note 16 – Income Taxes of Notes to
Consolidated Financial Statements.




INVESTMENT RESULTS
                                     Composition of Invested Assets
                                                       December 31, 2019           December 31, 2018
                                                        Amount      Percent         Amount      Percent
Fixed maturities, available-for-sale ("AFS"), at
fair value                                         $    42,148        79.5 %   $    35,652        76.2 %
Fixed maturities, at fair value using the fair
value option ("FVO")                                        11           - %            22           - %
Equity securities, at fair value                         1,657         3.1 %         1,214         2.6 %
Mortgage loans                                           4,215         8.0 %         3,704         7.9 %
Limited partnerships and other alternative
investments                                              1,758         3.3 %         1,723         3.7 %
Other investments (1)                                      320         0.6 %           192         0.4 %
Short-term investments                                   2,921         5.5 %         4,283         9.2 %
Total investments                                  $    53,030       100.0 %   $    46,790       100.0 %


(1) Primarily consists of investments of consolidated investment funds and
derivative instruments which are carried at fair value.
Year ended December 31, 2019 compared to the year ended December 31, 2018
Fixed maturities, AFS increased primarily due to the fixed maturities, AFS
acquired as part of the acquisition of Navigators Group as well as an increase
in valuations due to lower interest rates and tighter credit spreads.








Short-term investments decreased due to the funding of Navigators Group
acquisition slightly offset by tax receipts related to the refund of AMT tax
credits.
                                            Net Investment Income
                                                            For the years ended December 31,
                                                   2019                   2018                   2017
(Before tax)                                Amount   Yield (1)     Amount   Yield (1)     Amount   Yield (1)
Fixed maturities (2)                       $ 1,559        3.8 %   $ 1,459        3.9 %   $ 1,303        3.9 %
Equity securities                               46        3.4 %        32        3.1 %        24        2.8 %
Mortgage loans                                 165        4.4 %       141        4.1 %       124        4.1 %
Limited partnerships and other alternative
investments                                    232       14.4 %       205       13.2 %       174       12.0 %
Other (3)                                       32                     20                     49
Investment expense                             (83 )                  (77 )                  (71 )
Total net investment income                $ 1,951        4.1 %   $ 1,780        4.0 %   $ 1,603        4.0 %
Total net investment income excluding
limited partnerships and other alternative
investments                                $ 1,719        3.7 %   $ 1,575

3.7 % $ 1,429 3.7 %

(1) Yields calculated using annualized net investment income divided by the

monthly average invested assets at amortized cost as applicable, excluding

repurchase agreement and securities lending collateral, if any, and

derivatives book value.

(2) Includes net investment income on short-term investments.

(3) Primarily includes income from derivatives that qualify for hedge accounting

and hedge fixed maturities.

Year ended December 31, 2019 compared to the year ended December 31, 2018
Total net investment income increased primarily due to higher asset levels,
largely driven by the acquisition of Navigators Group, higher returns on limited
partnerships and








other alternative investments, and higher mortgage loan income due to higher
asset levels and prepayment penalties.
Annualized net investment income yield, excluding limited partnerships and other
alternative investments, was flat due to higher returns on equity fund
investments and

46e
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








prepayment penalties on mortgage loans, offset by lower reinvestment rates.
Average reinvestment rate, on fixed maturities and mortgage loans, excluding
certain U.S.Treasury securities and cash equivalent securities, for the
year-ended December 31, 2019, was 3.4% which was below the average yield of
sales and maturities of 4.0% due to repositioning into slightly higher quality
credits at lower interest rates and calls on higher yielding tax-exempt
municipals and corporates as well as due to sales and paydowns on higher
yielding securities. The average reinvestment

rate for the year-ended December 31, 2018 was 4.0% which was higher than the
average yield of sales and maturities of 3.7%, due to higher interest rates.
We expect the annualized net investment income yield for the 2020 calendar year,
excluding limited partnerships and other alternative investments, to be lower
than the portfolio yield earned in 2019 due to lower reinvestment rates. The
estimated impact on net investment income yield is subject to change as the
composition of the portfolio changes through portfolio management and changes in
market conditions.
                              Net Realized Capital Gains (Losses)
                                                         For the years ended December 31,
(Before tax)                                            2019           2018           2017
Gross gains on sales                               $       234$       114$       275
Gross losses on sales                                      (56 )         (172 )         (113 )
Equity securities (1)                                      254            (48 )            -
Net other-than-temporary impairment ("OTTI")
losses recognized in earnings (2)                           (3 )           (1 )           (8 )
Valuation allowances on mortgage loans                       1              -             (1 )
Other, net (3)                                             (35 )           (5 )           12
Net realized capital gains (losses)                $       395    Dollars      

(112 ) $ 165

(1) The net unrealized gain (loss) on equity securities included in net realized

capital gains (losses) related to equity securities still held as of

December 31, 2019, were $164 for the year-ended December 31, 2019. The net

unrealized gain (loss) on equity securities included in net realized capital

gains (losses) related to equity securities still held as of December 31,

2018, were $(80) for the year-ended December 31, 2018. Prior to 1er janvier,

2018, changes in net unrealized gains (losses) on equity securities were

included in AOCI.

(2) See Other-Than-Temporary Impairments within the Investment Portfolio Risks

and Risk Management section of the MD&A.

(3) Primarily consists of changes in value of non-qualifying derivatives,

including credit derivatives, interest rate derivatives used to manage

duration and equity derivatives. Also includes transactional foreign currency

    
    
    
    revaluation.


Year ended December 31, 2019
Gross gains and losses on sales were primarily driven by issuer-specific selling
of corporate securities, continued reduction of tax-exempt municipal bonds and
sales of U.S. treasuries for duration management.
Equity securities net gains were primarily driven by appreciation of equity
securities due to higher equity market levels.
Other, net losses includes losses on interest rate derivatives of $34 due to
higher rates, losses on equity derivatives of $17 due to an increase in domestic
equity markets, and losses of $9 due to foreign currency revaluation. These
losses were partially offset by gains on credit derivatives of $27 due to credit
spread tightening.
Year ended December 31, 2018
Gross gains and losses on sales were primarily the result of sector
repositioning and duration, liquidity and credit management within corporate
securities, U.S. treasury securities, and tax-exempt municipal bonds.
Equity securities net losses were driven by depreciation of equity securities
due to lower equity market levels, partially offset by gains on sales due to
tactical repositioning.
Other, net losses included losses of $11 related to credit derivatives due to
credit spread widening, partially offset by gains of $3 on foreign currency
derivatives.

CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ, and in the
past have differed, from those estimates.
The Company has identified the following estimates as critical in that they
involve a higher degree of judgment and are subject to a significant degree of
variability:
• property and casualty insurance product reserves, net of reinsurance;


• group benefit LTD reserves, net of reinsurance;

• evaluation of goodwill for impairment;

• valuation of investments and derivative instruments including evaluation of

other-than-temporary impairments on available-for-sale securities and

valuation allowances on mortgage loans;

• valuation allowance on deferred tax assets; et






                                       





                                       





                                       





                                       47
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

• contingencies relating to corporate litigation and regulatory matters.












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. In developing
these estimates management makes subjective and complex judgments that are
inherently uncertain and subject to material change as facts and circumstances
develop. Although variability is inherent in these estimates, management
believes the amounts provided are appropriate based upon the facts available
upon compilation of the financial statements.

Property & Casualty Insurance Product Reserves
P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as

                                                                                                                        of December 31, 2019
                ((Image Removed: chart-cb74514f33b752ba837.jpg))
       Loss and LAE Reserves, Net of Reinsurance as of December 31, 2019
                                                                                                                                                                                                                                                                                Property &     Total Property &
                                                                     Casualty          Casualty       % Total
                           Commercial Lines     Personal Lines   Other Operations     Insurance     Reserves-net
Workers' compensation    $           10,418   $              -   $             -   $       10,418      45.3%
General liability                     3,494                  -                 -            3,494      15.2%
Marine                                  279                  -                 -              279       1.2%
Package business (1)                  1,742                  -                 -            1,742       7.6%
Commercial property                     461                  -                 -              461       2.0%
Automobile liability                    992              1,560                 -            2,552      11.1%
Automobile physical
damage                                   15                 33                 -               48       0.2%
Professional liability                1,050                  -                 -            1,050       4.6%
Bond                                    337                  -                 -              337       1.5%
Homeowners                                -                527                 -              527       2.3%
Asbestos and
environmental                           143                 10               994            1,147       5.0%
Assumed reinsurance                     190                  -               112              302       1.3%
All other                               212                  3               414              629       2.7%
Total reserves-net                   19,333              2,133             1,520           22,986      100.0%
Reinsurance and other
recoverables                          4,030                 68             1,177            5,275
Total reserves-gross     $           23,363   $          2,201   $         2,697   $       28,261

(1) Commercial Lines policy packages that include property and general liability

coverages are generally referred to as the package line of business.












For descriptions of the coverages provided under the lines of business shown
above, see Part I - Item1, Business.
Overview of Reserving for Property and Casualty Insurance Claims
It typically takes many months or years to pay claims incurred under a property
and casualty insurance product; accordingly, the

Company must establish reserves at the time the loss is incurred. Most of the
Company's policies provide for occurrence-based coverage where the loss is
incurred when a claim event happens like an automobile accident, house or
building fire or injury to an employee under a workers' compensation policy.
Some of the Company's policies, mostly for directors and officers insurance and
errors and omissions insurance, are claims-made policies

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








where the loss is incurred in the period the claim event is reported to the
Company even if the loss event itself occurred in an earlier period.
Loss and loss adjustment expense reserves provide for the estimated ultimate
costs of paying claims under insurance policies written by the Company, less
amounts paid to date. These reserves include estimates for both claims that have
been reported and those that have not yet been reported, and include estimates
of all expenses associated with processing and settling these claims. Case
reserves are established by a claims handler on each individual claim and are
adjusted as new information becomes known during the course of handling the
claim. Incurred but not reported ("IBNR") reserves represent the difference
between the estimated ultimate cost of all claims and the actual loss and loss
adjustment expenses reported to the Company by claimants ("reported losses").
Reported losses represent cumulative loss and loss adjustment expenses paid plus
case reserves for outstanding reported claims. For most lines, Company actuaries
evaluate the total reserves (IBNR and case reserves) on an accident year basis.
An accident year is the calendar year in which a loss is incurred, or, in the
case of claims-made policies, the calendar year in which a loss is reported. Pour
lines acquired from the Navigators Group book of business, total reserves are
evaluated on a policy year basis and then converted to accident year. A policy
year is the calendar year in which a policy incepts.
Factors that Change Reserve Estimates- Reserve estimates can change over time
because of unexpected changes in the external environment. Inflation in claim
costs, such as with medical care, hospital care, automobile parts, wages and
home and building repair, would cause claims to settle for more than they are
initially reserved. Changes in the economy can cause an increase or decrease in
the number of reported claims (claim frequency). For example, an improving
economy could result in more automobile miles driven and a higher number of
automobile reported claims, or a change in economic conditions can lead to more
or less workers' compensation reported claims. An increase in the number or
percentage of claims litigated can increase the average settlement amount per
claim (claim severity). Changes in the judicial environment can affect
interpretations of damages and how policy coverage applies which could increase
or decrease claim severity. Over time, judges or juries in certain jurisdictions
may be more inclined to determine liability and award damages. New legislation
can also change how damages are defined or change the statutes of limitations
for the filing of civil suits, resulting in greater claim frequency or severity.
In addition, new types of injuries may arise from exposures not contemplated
when the policies were written. Past examples include pharmaceutical products,
silica, lead paint, molestation or abuse and construction defects.
Reserve estimates can also change over time because of changes in internal
Company operations. A delay or acceleration in handling claims may signal a need
to increase or reduce reserves from what was initially estimated. Changes in
claim patterns may arise through integration of Navigators Group claims
practices. New lines of business may have loss development patterns that are not
well established. Changes in the geographic mix of business, changes in the mix
of business by industry and changes in the mix of business by policy limit or
deductible can increase the risk that losses will ultimately develop differently
than the loss development patterns assumed in our reserving. In addition,

changes in the quality of risk selection in underwriting and changes in
interpretations of policy language could increase or decrease ultimate losses
from what was assumed in establishing the reserves.
In the case of assumed reinsurance, all of the above risks apply. The Company
assumes property and casualty risks from other insurance companies as part of
its Global Re business acquired from Navigators Group and from certain pools and
associations. Global Re, which is a part of the global specialty business,
mostly assumes property, casualty, surety, agriculture, marine and accident and
health insurance risks. Changes in the case reserving and reporting patterns of
insurance companies ceding to The Hartford can create additional uncertainty in
estimating the reserves. Due to the inherent complexity of the assumptions used,
final claim settlements may vary significantly from the present estimates of
direct and assumed reserves, particularly when those settlements may not occur
until well into the future.
Reinsurance Recoverables- Through both facultative and treaty reinsurance
agreements, the Company cedes a share of the risks it has underwritten to other
insurance companies. The Company records reinsurance recoverables for loss and
loss adjustment expenses ceded to its reinsurers representing the anticipated
recovery from reinsurers of unpaid claims, including IBNR.
The Company estimates the portion of losses and loss adjustment expenses to be
ceded based on the terms of any applicable facultative and treaty reinsurance,
including an estimate of IBNR for losses that will ultimately be ceded.
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 estimated
allowance considers the credit quality of the Company's reinsurers, recent
outcomes in arbitration and litigation in disputes between reinsurers and
cedants and recent communication activity between reinsurers and cedants that
may signal how the Company's own reinsurance claims may settle. Where its
reinsurance contracts permit, the Company secures funding of future claim
obligations with various forms of collateral, including irrevocable letters of
credit, secured trusts, funds held accounts and group-wide offsets. The
allowance for uncollectible reinsurance was $114 as of December 31, 2019,
comprised of $42 related to Commercial Lines, $1 related to Personal Lines and
$71 related to Property & Casualty Other Operations.
The Company's estimate of reinsurance recoverables, net of an allowance for
uncollectible reinsurance, is subject to similar risks and uncertainties as the
estimate of the gross reserve for unpaid losses and loss adjustment expenses for
direct and assumed exposures.
Review of Reserve Adequacy- The Hartford regularly reviews the appropriateness
of reserve levels at the line of business or more detailed level, taking into
consideration the variety of trends that impact the ultimate settlement of
claims. For Property & Casualty Other Operations, asbestos and environmental
("Run-off A&E") reserves are reviewed by type of event rather than by line of
business.
Reserve adjustments, which may be material, are reflected in the operating
results of the period in which the adjustment is

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








determined to be necessary. In the judgment of management, information currently
available has been properly considered in establishing the reserves for unpaid
losses and loss adjustment expenses and in recording the reinsurance
recoverables for ceded unpaid losses.
Reserving Methodology
The following is a discussion of the reserving methods used for the Company's
property and casualty lines of business other than asbestos and environmental.
Reserves are set by line of business within the operating segments. A single
line of business may be written in more than one segment. Lines of business for
which reported losses emerge over a long period of time are referred to as
long-tail lines of business. Lines of business for which reported losses emerge
more quickly are referred to as short-tail lines of business. Les entreprises
shortest-tail lines of business are homeowners, commercial property, marine and
automobile physical damage. The longest tail lines of business include workers'
compensation, general liability, professional liability and assumed reinsurance.
For short-tail lines of business, emergence of paid loss and case reserves is
credible and likely indicative of ultimate losses. For long-tail lines of
business, emergence of paid losses and case reserves is less credible in the
early periods after a given accident year and, accordingly, may not be
indicative of ultimate losses.
Use of Actuarial Methods and Judgments- Les entreprises reserving actuaries
regularly review reserves for both current and prior accident years using the
most current claim data. A variety of actuarial methods and judgments are used
for most lines of business to arrive at selections of estimated ultimate losses
and loss adjustment expenses. New methods may be added for specific lines over
time to inform these selections where appropriate. The reserve selections
incorporate input, as appropriate, from claims personnel, pricing actuaries and
operating management about reported loss cost trends and other factors that
could affect the reserve estimates. Most reserves are reviewed fully each
quarter, including loss and loss adjustment expense reserves for homeowners,
commercial property, marine, automobile physical damage, automobile liability,
package property business, and workers' compensation. Other reserves, including
most general liability and professional liability lines, are reviewed
semi-annually. Certain additional reserves are also reviewed semi-annually or
annually, including reserves for losses incurred in accident years older than
twelve years for Personal Lines and older than twenty years for Commercial
Lines, as well as reserves for bond, assumed reinsurance, latent exposures such
as construction defects, and unallocated loss adjustment expenses. For reserves
that are reviewed semi-annually or annually, management monitors the emergence
of paid and reported losses in the intervening quarters and, if necessary,
performs a reserve review to determine whether the reserve estimate should
change.
An expected loss ratio is used in initially recording the reserves for both
short-tail and long-tail lines of business. This expected loss ratio is
determined by starting with the average loss ratio of recent prior accident
years and adjusting that ratio for the effect of expected changes to earned
pricing, loss frequency and severity, mix of business, ceded reinsurance and
other factors. For short-tail lines, IBNR for the current accident year is
initially

recorded as the product of the expected loss ratio for the period, earned
premium for the period and the proportion of losses expected to be reported in
future calendar periods for the current accident period. For long-tailed lines,
IBNR reserves for the current accident year are initially recorded as the
product of the expected loss ratio for the period and the earned premium for the
period, less reported losses for the period.
As losses emerge or develop in periods subsequent to a given accident year,
reserving actuaries use other methods to estimate ultimate unpaid losses in
addition to the expected loss ratio method. These primarily include paid and
reported loss development methods, frequency/severity techniques and the
Bornhuetter-Ferguson method (a combination of the expected loss ratio and paid
development or reported development method). Within any one line of business,
the methods that are given more influence vary based primarily on the maturity
of the accident year, the mix of business and the particular internal and
external influences impacting the claims experience or the methods. The output
of the reserve reviews are reserve estimates that are referred to herein as the
"actuarial indication".
Reserve Discounting- Most of the Company's property and casualty insurance
product reserves are not discounted. However, the Company has discounted
liabilities funded through structured settlements and has discounted a portion
of workers' compensation reserves that have a fixed and determinable payment
stream. 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, 2019
and 2018, U.S. property and casualty insurance product reserves for losses and
loss adjustment expenses, net of reinsurance recoverables, reported under U.S.
GAAP were approximately equal to net reserves reported on a statutory basis. The
primary difference between the statutory and GAAP reserve amounts is due to
reinsurance recoverables on two ceded retroactive reinsurance agreements that
are recorded as a reduction of other liabilities under statutory accounting. One
of the retroactive reinsurance agreements covers substantially all adverse
development on asbestos and environmental reserves subsequent to 2016 and the
other covers adverse development on Navigators Insurers' existing net loss and
allocated loss adjustment reserves as of December 31, 2018. Under both
agreements, the Company cedes to NICO, a subsidiary of Berkshire Hathaway Inc.
("Berkshire").
Reserving Methods by Line of Business- Apart from Run-off A&E which is discussed
in the following section on Property & Casualty Other Operations, below is a
general discussion of which reserving methods are preferred by line of business.
Because the actuarial estimates are generated at a much finer level of detail
than line of business (e.g., by distribution channel, coverage, accident
period), other methods than those described for the line of business may also be
employed for a coverage and accident year within a line of business. Also, as
circumstances change, the methods that are given more influence will change.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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                                                                Preferred Reserving Methods by Line of Business
Commercial     These short-tailed lines are fast-developing and paid and
property,      reported development techniques are used as these methods use
homeowners and historical data to develop paid and reported loss development
automobile     patterns, which are then applied to cumulative paid and reported
physical       losses by accident period to estimate ultimate losses. À
damage         addition to paid and reported development methods, for the most
               immature accident months, the Company uses frequency and severity
               techniques and the initial expected loss ratio. The advantage of
               frequency/severity techniques is that frequency estimates are
               generally easier to predict and external information can be used
               to supplement internal data in estimating average severity.

Personal For personal automobile liability, and bodily injury in
automobile particular, in addition to traditional paid and reported
liability development methods, the Company relies on frequency/severity

                                                            techniques and Berquist-Sherman techniques. Because the paid
               development technique is affected by changes in claim closure
               patterns and the reported development method is affected by
               changes in case reserving practices, the Company uses
               Berquist-Sherman techniques which adjust these patterns to
               reflect current settlement rates and case reserving practices.
               The Company generally uses the reported development method for
               older accident years and a combination of reported development,
               frequency/severity and Berquist-Sherman methods for more recent
               accident years. For older accident periods, reported losses are a
               good indicator of ultimate losses given the high percentage of
               ultimate losses reported to date. For more recent periods, the
               frequency/severity techniques are not affected as much by changes
               in case reserve practices and changing disposal rates and the
               Berquist-Sherman techniques specifically adjust for these
changements.
Commercial     The Company performs a variety of techniques, including the paid
automobile     and reported development methods and frequency/severity
liability      techniques. For older, more mature accident years, the Company
               primarily uses reported development techniques. For more recent
               accident years, the Company relies on several methods that
               incorporate expected loss ratios, reported loss development, paid
               loss development, frequency/severity, case reserve adequacy, and
               claim settlement rates.
Professional   Reported and paid loss development patterns for this line tend to
liability      be volatile. Therefore, the Company typically relies on frequency
               and severity techniques.
General        For these long-tailed lines of business, the Company generally
liability,     relies on the expected loss ratio and reported development
bond and large techniques. The Company generally weights these techniques
deductible     together, relying more heavily on the expected loss ratio method
workers'       at early ages of development and more on the reported development
compensation   method as an accident year matures.
Workers'       Workers' compensation is the Company's single largest reserve
compensation   line of business and a wide range of methods are used. Methods
               include paid and reported development techniques, the expected
               loss ratio and Bornhuetter-Ferguson methods, with adjustments
               based on analysis of larger states. We have seen an acceleration
               of paid losses relative to historical patterns that began in
               2011. This acceleration is due to an increase in lump sum
               settlements to claimants across multiple accident years and we
               have adjusted our expected loss development patterns accordingly.
               Adjusting for the effect of an acceleration in payments compared
               to historical patterns, paid loss development techniques are
               generally preferred for the workers' compensation line,
               particularly for more mature accident years. For less mature
               accident years, the Company places greater reliance on expected
               loss ratio methods.
Marine         For marine liability, the Company generally relies on the
               expected loss ratio, Berquist-Sherman, and reported development
               techniques. The Company generally weights these techniques
               together, relying more heavily on the expected loss ratio method
               at early ages of development and then shifts towards
               Berquist-Sherman and then more towards the reported development
               method as a policy year matures. Policy year loss reserve
estimates are then converted to an accident year basis. Pour
               marine property segments, the Company relies on a
               Berquist-Sherman method for early development ages then shifts to
               reported development techniques.
Assumed        Standard methods, such as expected loss ratio, Berquist-Sherman
reinsurance    and reported development techniques are applied. These methods
and all other  and analyses are informed by underlying treaty by treaty analyses
               supporting the ELRs, and cedant data will often inform the loss
               development patterns. In some instances, reserve indications may
               also be influenced by information gained from claims and
               underwriting audits. For the A&H business where the

reporting is

                                                            quick and treaties are not written evenly throughout the year,
               policy quarter analyses are performed to avoid potential
               distortions. Policy quarter and policy year loss reserve
               estimates are then converted to an accident year basis.
Allocated loss For some lines of business (e.g., professional liability, assumed
adjustment     reinsurance, and the acquired Navigators Group book of business),
expenses       ALAE and losses are analyzed together. For most lines of
(ALAE)         business, however, ALAE is analyzed separately, using paid
               development techniques and a ratio of paid ALAE to paid loss is
               applied to loss reserves to estimate unpaid ALAE.

Unallocated ULAE is analyzed separately from loss and ALAE. For most lines of
loss

                                            business, future ULAE costs to be paid are projected based on an
adjustment     expected claim handling cost per claim year, the anticipated
expenses       claim closure pattern and the ratio of paid ULAE to paid loss is
(ULAE)         applied to estimated unpaid losses. For some lines, a simplified
               paid-to-paid approach is used.


In the final step of the reserve review process, senior reserving actuaries and
senior management apply their judgment to determine the appropriate level of
reserves considering the actuarial indications and other factors not
contemplated in the actuarial indications. Those factors include, but are not
limited to, the assessed reliability of key loss trends and assumptions used in

the current actuarial indications, the maturity of the accident year, pertinent
trends observed over the recent past, the level of volatility within a
particular line of business, and the improvement or deterioration of actuarial
indications in the current period as compared to the prior periods. The Company

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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also considers the magnitude of the difference between the actuarial indication
and the recorded reserves.
Based on the results of the quarterly reserve review process, the Company
determines the appropriate reserve adjustments, if any, to record. In general,
adjustments are made more quickly to more mature accident years and less
volatile lines of business. Such adjustments of reserves are referred to as
"prior accident year development". Increases in previous estimates of ultimate
loss costs are referred to as either an increase in prior accident year reserves
or as unfavorable reserve development. Decreases in previous estimates of
ultimate loss costs are referred to as either a decrease in prior accident year
reserves or as favorable reserve development. Reserve development can influence
the comparability of year over year underwriting results.
For a discussion of changes to reserve estimates recorded in 2019, see the Total
P&C Insurance Product Reserve Development section below.
Current Trends Contributing to Reserve Uncertainty
The Hartford is a multi-line company in the property and casualty insurance
business. The Hartford is therefore subject to reserve uncertainty stemming from
changes in loss trends and other conditions which could become material at any
point in time. As market conditions and loss trends develop, management must
assess whether those conditions constitute a long-term trend that should result
in a reserving action (i.e., increasing or decreasing the reserve).
General liability- Within Commercial Lines, including the acquired Navigators
Group book of business, and Property & Casualty Other Operations, the Company
has exposure to general liability claims, including from bodily injury, property
damage and product liability. Reserves for these exposures can be particularly
difficult to estimate due to the long development pattern and uncertainty about
how cases will settle. In particular, the Company has exposure to bodily injury
claims that is the result of long-term or continuous exposure to harmful
products or substances. Examples include, but are not limited to, pharmaceutical
products, silica, talcum powder, head injuries and lead paint. The Company also
has exposure to claims from construction defects, where property damage or
bodily injury from negligent construction is alleged. In addition, the Company
has exposure to claims asserted against religious institutions and other
organizations relating to molestation or abuse. Such exposures may involve
potentially long latency periods and may implicate coverage in multiple policy
periods. These factors make reserves for such claims more uncertain than other
bodily injury or property damage claims. With regard to these exposures, the
Company monitors trends in litigation, the external environment including
legislation, the similarities to other mass torts and the potential impact on
the Company's reserves. Additionally, uncertainty in estimated claim severity
causes reserve variability, particularly with respect to changes in internal
claim handling and case reserving practices.
Workers' compensation- Included in both Small Commercial and in Middle & Large
Commercial, workers' compensation is the Company's single biggest line of
business and the property and casualty line of business with the longest pattern
of loss emergence. To the extent that patterns in the frequency of settlement
payments deviate from historical

patterns, loss reserve estimates would be less reliable. Medical costs make up
approximately 50% of workers' compensation payments. As such, reserve estimates
for workers' compensation are particularly sensitive to changes in medical
inflation, the changing use of medical care procedures and changes in state
legislative and regulatory environments. In addition, a deteriorating economic
environment can reduce the ability of an injured worker to return to work and
lengthen the time a worker receives disability benefits. In National Accounts,
reserves for large deductible workers' compensation insurance require estimating
losses attributable to the deductible amount that will be paid by the insured;
if such losses are not paid by the insured due to financial difficulties, the
Company is contractually liable.
Commercial Lines automobile- Uncertainty in estimated claim severity causes
reserve variability for commercial automobile losses including reserve
variability due to changes in internal claim handling and case reserving
practices as well as due to changes in the external environment.
Directors' and officers' insurance- Uncertainty regarding the number and
severity of class action suits can result in reserve volatility for both
directors' and officers' insurance claims. Additionally, the Company's exposure
to losses under directors' and officers' insurance policies, both domestically
and internationally, is primarily in excess layers, making estimates of loss
more complex.
Personal Lines automobile- While claims emerge over relatively shorter periods,
estimates can still vary due to a number of factors, including uncertain
estimates of frequency and severity trends. Severity trends are affected by
changes in internal claim handling and case reserving practices as well as by
changes in the external environment. Changes in claim practices increase the
uncertainty in the interpretation of case reserve data, which increases the
uncertainty in recorded reserve levels. Severity trends have increased in recent
accident years, in part driven by more expensive parts associated with new
automobile technology, causing additional uncertainty about the reliability of
past patterns. In addition, the introduction of new products and class plans has
led to a different mix of business by type of insured than the Company
experienced in the past. Such changes in mix increase the uncertainty of the
reserve projections, since historical data and reporting patterns may not be
applicable to the new business.
Assumed reinsurance- While the pricing and reserving processes can be
challenging and idiosyncratic for insurance companies, the inherent
uncertainties of setting prices and estimating such reserves are even greater
for the reinsurer. This is primarily due to the longer time between the date of
an occurrence and the reporting of claims to the reinsurer, the diversity of
development patterns among different types of reinsurance treaties or contracts,
the necessary reliance on the ceding companies for information regarding
reported claims and differing pricing and reserving practices among ceding
companies. In addition, trends that have affected development of liabilities in
the past may not necessarily occur or impact liability development in the same
manner or to the same degree in the future. As a result, actual losses and LAE
may deviate, perhaps substantially, from the expected estimates.
International business- In addition to several of the line-specific trends
listed above, the International business acquired

                                       52
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








through the Navigators Group book of business may have additional uncertainty
due to geopolitical, foreign currency, and other risks. For example, uncertainty
with the resolution of Brexit can affect the reserve estimates for international
business.
Impact of Key Assumptions on Reserves
As stated above, the Company's practice is to estimate reserves using a variety
of methods, assumptions and data elements within its reserve estimation process.
The Company does not consistently use statistical loss distributions or
confidence levels around its reserve estimate and, as a result, does not
disclose reserve ranges.
Across most lines of business, the most important reserve assumptions are future
loss development factors applied to paid or reported losses to date. The trend
in loss cost frequency and severity is also a key assumption, particularly in
the most recent accident years, where loss development factors are less
credible.
The following discussion discloses possible variation from current estimates of
loss reserves due to a change in certain key indicators of potential losses. Pour
automobile liability lines in both Personal Lines and Commercial Lines, the key
indicator is the annual loss cost trend, particularly the severity trend
component of loss costs. For workers' compensation and general liability, loss
development patterns are a key indicator, particularly for more mature accident
years. For workers' compensation, paid loss development patterns have been
impacted by medical cost inflation and other changes in loss cost trends. Pour
general liability, incurred loss development patterns have been impacted by,
among other things, emergence of new types of claims (e.g., construction defect
claims) and a shift in the mixture between smaller, more routine claims and
larger, more complex claims.
Each of the impacts described below is estimated individually, without
consideration for any correlation among key indicators or among lines of
business. Therefore, it would be inappropriate to take each of the amounts
described below and add them together in an attempt to estimate volatility for
the Company's reserves in total. For any one reserving line of business, the
estimated variation in reserves due to changes in key indicators is a reasonable
estimate of possible variation that may occur in the future, likely over a
period of several calendar years. The variation discussed is not meant to be a
worst-case scenario, and, therefore, it is possible that future variation may be
more than the amounts discussed below.

                                              Reserves, Net of     Estimated Range
                       Possible Change in   Reinsurance December   of Variation in
                         Key Indicator            31, 2018            Reserves
Personal Automobile    +/- 2.5. points to       $1.6 billion           +/- $80
Liability              the annual assumed
                      change in loss cost
                      severity for the two
                      most recent accident
                             years
Commercial Automobile  +/- 2.5 points to        $1.0 billion           +/- $30
Liability              the annual assumed
                      change in loss cost
                      severity for the two
                      most recent accident
                             years
Workers' Compensation  2% change in paid        $10.4 billion         +/- $400
                        loss development
                            patterns
General Liability         8% change in          $3.5 billion          +/- $450
                         reported loss
                      development patterns


Reserving for Asbestos and Environmental Claims
How A&E Reserves are Set- The process for establishing reserves for asbestos and
environmental claims first involves estimating the required reserves gross of
ceded reinsurance and then estimating reinsurance recoverables. In establishing
reserves for gross asbestos claims, the Company evaluates its insureds'
estimated liabilities for such claims by examining exposures for individual
insureds and assessing how coverage applies. The Company considers a variety of
factors, including the jurisdictions where underlying claims have been brought,
past, pending and anticipated future claim activity, the level of plaintiff
demands, disease mix, past settlement values of similar claims, dismissal rates,
allocated loss adjustment expense, and potential impact of other defendants
being in bankruptcy.
Similarly, the Company reviews exposures to establish gross environmental
reserves. The Company considers several factors in estimating environmental
liabilities, including historical values of similar claims, the number of sites
involved, the insureds' alleged activities at each site, the alleged
environmental damage, the respective shares of liability of potentially
responsible parties, the appropriateness and cost of remediation, the nature of
governmental enforcement activities or mandated remediation efforts and
potential impact of other defendants being in bankruptcy.
After evaluating its insureds' probable liabilities for asbestos and/or
environmental claims, the Company evaluates the insurance coverage in place for
such claims. The Company considers its insureds' total available insurance
coverage, including the coverage issued by the Company. 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.

                                       53
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








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. This analysis is conducted by the Company's lawyers and is subject
to applicable privileges.
For both asbestos and environmental reserves, the Company also analyzes its
historical paid and reported losses and expenses year by year, to assess any
emerging trends, fluctuations or characteristics suggested by the aggregate paid
and reported activity. The historical losses and expenses are analyzed on both a
direct basis and net of reinsurance.
Once the gross ultimate exposure for indemnity and allocated loss adjustment
expense is determined for its insureds by each policy year, the Company
calculates its ceded reinsurance projection based on any applicable facultative
and treaty reinsurance and the Company's experience with reinsurance
collections. See the section that follows entitled A&E Adverse Development Cover
that discusses the impact the reinsurance agreement with NICO may have on future
adverse development of asbestos and environmental reserves, if any.
Uncertainties Regarding Adequacy of A&E Reserves- A number of factors affect the
variability of estimates for gross asbestos and environmental reserves including
assumptions with respect to the frequency of claims, the average severity of
those claims settled with payment, the dismissal rate of claims with no payment,
resolution of coverage disputes with our policyholders and the expense to
indemnity ratio. Reserve estimates for gross asbestos and environmental reserves
are subject to greater variability than reserve estimates for more traditional
exposures.
The process of estimating asbestos and environmental reserves remains subject to
a wide variety of uncertainties, which are

detailed in Note 14 - Commitments and Contingencies of Notes to Consolidated
Financial Statements. The Company believes that its current asbestos and
environmental reserves are appropriate. Future developments could cause the
Company to change its estimates of its gross asbestos and environmental reserves
and if cumulative ceded losses under the adverse development cover ("A&E ADC")
with NICO exceed the ceded premium paid of $650, there could be significant
variability in net income due to timing differences between when gross reserves
are increased and when reinsurance recoveries are recognized. Consistent with
past practice, the Company will continue to monitor its reserves in Property &
Casualty Other Operations regularly, including its annual reviews of asbestos
liabilities, reinsurance recoverables, the allowance for uncollectible
reinsurance, and environmental liabilities. Where future developments indicate,
we will make appropriate adjustments to the reserves at that time.
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, 2019 represent the Company's best estimate of its ultimate
liability for losses and loss adjustment expenses related to losses covered by
policies written by the Company. 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 and liquidity.

                                       54
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Part II – Item 7. 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, 2019
                                                            Personal     

Property & Casualty Total Property &

                                        
                                        
                                        
                                        Commercial Lines      Lines        Other Operations     Casualty Insurance
Beginning liabilities for unpaid
losses and loss adjustment expenses,
gross                                  $        19,455$     2,456   $         2,673        $       24,584
Reinsurance and other recoverables               3,137            108               987                 4,232
Beginning liabilities for unpaid
losses and loss adjustment expenses,
net                                             16,318          2,348             1,686                20,352
Navigators Group acquisition                     2,001              -                 -                 2,001
Provision for unpaid losses and loss
adjustment expenses
Current accident year before
catastrophes                                     4,913          2,087                 -                 7,000
Current accident year ("CAY")
catastrophes                                       323            140                 -                   463
Prior accident year development
("PYD") (1)                                        (44 )          (42 )              21                   (65 )
Total provision for unpaid losses and
loss adjustment expenses                         5,192          2,185                21                 7,398
Change in deferred gain on retroactive
reinsurance included in other
liabilities (1)                                    (16 )            -                 -                   (16 )
Payments                                        (4,161 )       (2,400 )            (187 )              (6,748 )
Foreign currency adjustment                         (1 )            -                 -                    (1 )
Ending liabilities for unpaid losses
and loss adjustment expenses, net               19,333          2,133             1,520                22,986
Reinsurance and other recoverables               4,030             68             1,177                 5,275
Ending liabilities for unpaid losses
and loss adjustment expenses, gross    $        23,363$     2,201   Dollars   

2,697 $ 28,261
Earned premiums and fee income $ 8,325 $ 3,235
Loss and loss expense paid ratio (2)

                                                        50.0           74.2
Loss and loss expense incurred ratio              62.6           68.3
Prior accident year development (pts)
(3)                                               (0.5 )         (1.3 )


(1) Prior accident year development does not include the benefit of a portion of

losses ceded under the Navigators ADC which, under retroactive reinsurance

accounting, is deferred and recognized over the period the ceded losses are

recovered in cash from NICO. For additional information regarding the

Navigators ADC agreement, please refer to Note 11 – Reserve for Unpaid Losses

and Loss Adjustment Expenses of Notes to Consolidated Financial Statements.

(2) The "loss and loss expense paid ratio" represents the ratio of paid losses

and loss adjustment expenses to earned premiums.

(3) "Prior accident year development (pts)" represents the ratio of prior

accident year development to earned premiums.



    


    


    


    Current Accident Year Catastrophe Losses for the Year Ended December 31, 2019, Net of
Réassurance
                                             Commercial         Personal
                                                Lines            Lines            Total
Wind and hail                             $           157   $          102   $          259
Winter storms                                          54               18               72
Tropical Storms                                        18                5               23
Hurricanes                                             20                4               24
Wildfires                                               4                4                8
Tornadoes                                              53                7               60
Typhoons                                               16                -               16
Other                                                   1                -                1
Total catastrophe losses                  $           323   $          140   $          463

In December, 2019, the judge overseeing the bankruptcy of PG&E Corporation and
Pacific Gas and Electric Company (together, "PG&E") approved an $11 billion
settlement with insurers representing approximately 85 percent of insurance
subrogation claims to resolve all such claims arising from the








2017 Northern California wildfires and 2018 Camp wildfire. The settlement is
subject to the confirmation by the bankruptcy court of a chapter 11 plan of
reorganization (a "Plan") which implements the terms of the settlement. If a
Plan is approved, certain of the Company's insurance subsidiaries would be
entitled

                                       55
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








to settlement payments. Based on reserve estimates submitted with the
subrogation request, the amount our subsidiaries could collect from PG&E, if
any, would be approximately $300 į $325 but could be more or less than that
amount depending on how the Company's ultimate paid claims subject to
subrogation compare to other insurers' ultimate paid claims subject to
subrogation. Approval of the Plan and amount of the Company's ultimate
subrogation recoveries from PG&E are subject to uncertainty.
Given the uncertainty about whether the Plan will be approved, the Company has
not recognized a benefit from potential subrogation from PG&E and will evaluate
in future periods when

more information becomes known. In connection with the 2018 Camp wildfire, the
Company has recognized a $12 reinsurance recoverable for losses incurred in
excess of a $350 per occurrence retention. Under its 2018 property aggregate
catastrophe treaty, the Company has recognized a reinsurance recoverable for
aggregate catastrophe losses in excess of an $825 retention, with the
recoverable currently estimated at $45. As such, the first $57 of subrogation
recoveries would be offset by a $57 reduction in these reinsurance recoverables
resulting in no net benefit to income.

Unfavorable (Favorable) Prior Accident Year Development for the Year Ended December 31, 2019

                                                                                                                                                                                                                                                                                                                Property &
                                                             Personal     Casualty Other     Total Property &
                                        Commercial Lines       Lines        Operations      Casualty Insurance
Workers' compensation                  $          (120 )   $         -   $          -     $          (120 )
Workers' compensation discount
accretion                                           33               -              -                  33
General liability                                   61               -              -                  61
Marine                                               8               -              -                   8
Package business                                   (47 )             -              -                 (47 )
Commercial property                                (11 )             -              -                 (11 )
Professional liability                              29               -              -                  29
Bond                                                (3 )             -              -                  (3 )
Assumed Reinsurance                                  3               -              -                   3
Automobile liability                                27             (38 )            -                 (11 )
Homeowners                                           -               3              -                   3
Net asbestos reserves                                -               -              -                   -
Net environmental reserves                           -               -              -                   -
Catastrophes                                       (40 )            (2 )            -                 (42 )
Uncollectible reinsurance                           (5 )             -            (25 )               (30 )
Other reserve re-estimates, net                      5              (5 )           46                  46
Total prior accident year development,
including full benefit for the ADC
cession                                            (60 )           (42 )           21                 (81 )
Change in deferred gain on retroactive
reinsurance included in other
liabilities                                         16               -              -                  16
Total prior accident year development  $           (44 )   $       (42 ) $         21     $           (65 )



56
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Part II – Item 7. 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, 2018
                                                            Personal     

Property & Casualty Total Property &

                                        
                                        
                                        
                                        Commercial Lines      Lines        Other Operations     Casualty Insurance
Beginning liabilities for unpaid
losses and loss adjustment expenses,
gross                                  $        18,893$     2,294   $         2,588        $       23,775
Reinsurance and other recoverables               3,147             71               739                 3,957
Beginning liabilities for unpaid
losses and loss adjustment expenses,
net                                             15,746          2,223             1,849                19,818
Provision for unpaid losses and loss
adjustment expenses
Current accident year before
catastrophes                                     4,037          2,249                 -                 6,286
Current accident year catastrophes                 275            546                 -                   821
Prior accident year development                   (200 )          (32 )              65                  (167 )
Total provision for unpaid losses and
loss adjustment expenses                         4,112          2,763                65                 6,940
Payments                                        (3,540 )       (2,638 )            (228 )              (6,406 )
Ending liabilities for unpaid losses
and loss adjustment expenses, net               16,318          2,348             1,686                20,352
Reinsurance and other recoverables               3,137            108               987                 4,232
Ending liabilities for unpaid losses
and loss adjustment expenses, gross    $        19,455$     2,456   Dollars   

2,673 $ 24,584
Earned premiums and fee income $ 7,081 $ 3,439
Loss and loss expense paid ratio (1)

                                                        50.0           76.7
Loss and loss expense incurred ratio              58.4           81.3
Prior accident year development (pts)
(2)                                               (2.8 )         (0.9 )


(1) The "loss and loss expense paid ratio" represents the ratio of paid losses

and loss adjustment expenses to earned premiums and fee income.

(2) "Prior accident year development (pts)" represents the ratio of prior

accident year development to earned premiums.



    


    


    


    Current Accident Year Catastrophe Losses for the Year Ended December 31, 2018, Net of
Réassurance
                                              Commercial         Personal
                                                Lines             Lines            Total
Wind and hail                             $           124    $          164   $         288
Winter storms                                          50                25              75
Flooding                                                1                 1               2
Volcanic eruption                                       -                 2               2
Wildfire                                               56               384             440
Hurricanes                                             71                23              94
Massachusetts gas explosion                             1                 -               1
Earthquake                                              -                 1               1
Total catastrophe losses                              303               600             903
Less: reinsurance recoverable under the
property aggregate treaty (1)                         (28 )             (54 )           (82 )
Net catastrophe losses                    $           275    $          546   $         821

(1)Refers to reinsurance recoverable under the Company's Property Aggregate
treaty. For further information on the treaty, refer to Part II, Item 7, MD&A –
Enterprise Risk Management – Insurance Risk.

                                                                                                                                                            57
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Unfavorable (Favorable) Prior Accident Year Development for the Year Ended December 31, 2018

                                                                                                                                                                                                                                                                                                            Property &
                                                             Personal    Casualty Other     Total Property &
                                        Commercial Lines      Lines        Operations      Casualty Insurance
Workers' compensation                  $          (164 )  $         -    $           -   $          (164 )
Workers' compensation discount
accretion                                           40              -                -                40
General liability                                   52              -                -                52
Package business                                   (26 )            -                -               (26 )
Commercial property                                (12 )            -                -               (12 )
Professional liability                             (12 )            -                -               (12 )
Bond                                                 2              -                -                 2
Automobile liability                               (15 )          (18 )              -               (33 )
Homeowners                                           -            (25 )              -               (25 )
Net asbestos reserves                                -              -                -                 -
Net environmental reserves                           -              -                -                 -
Catastrophes                                       (67 )           18                -               (49 )
Uncollectible reinsurance                            -              -               22                22
Other reserve re-estimates, net                      2             (7 )             43                38

Total prior accident year development $ (200 ) $ (32 ) Dollars

65 $ (167 )

Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid

                                                        Losses and LAE for the Year Ended December 31, 2017
                                                            Personal     

Property & Casualty Total Property &

                                        
                                        
                                        
                                        Commercial Lines      Lines        Other Operations     Casualty Insurance
Beginning liabilities for unpaid
losses and loss adjustment expenses,
gross                                  $        17,950$     2,094   $         2,501        $       22,545
Reinsurance and other recoverables               3,037             25               426                 3,488
Beginning liabilities for unpaid
losses and loss adjustment expenses,
net                                             14,913          2,069             2,075                19,057
Provision for unpaid losses and loss
adjustment expenses
Current accident year before
catastrophes                                     3,961          2,584                 -                 6,545
Current accident year catastrophes                 383            453                 -                   836
Prior accident year development                    (22 )          (37 )              18                   (41 )
Total provision for unpaid losses and
loss adjustment expenses                         4,322          3,000                18                 7,340
Payments                                        (3,489 )       (2,846 )            (244 )              (6,579 )
Less: net reserves transferred to
liabilities held for sale (1)                        -              -                 -                     -
Ending liabilities for unpaid losses
and loss adjustment expenses, net               15,746          2,223             1,849                19,818
Reinsurance and other recoverables               3,147             71               739                 3,957
Ending liabilities for unpaid losses
and loss adjustment expenses, gross    $        18,893$     2,294   Dollars   

2,588 $ 23,775
Earned premiums and fee income $ 6,902 $ 3,734
Loss and loss expense paid ratio (1)

                                                        50.6           76.2
Loss and loss expense incurred ratio              63.0           81.3
Prior accident year development (pts)
(2)                                               (0.3 )         (1.0 )


(1) The "loss and loss expense paid ratio" represents the ratio of paid losses

and loss adjustment expenses to earned premiums and fee income.

(2) "Prior accident year development (pts)" represents the ratio of prior

                accident year development to earned premiums.



58
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations


    

    

    

    Current Accident Year Catastrophe Losses for the Year Ended December 31, 2017, Net of
Réassurance
                                              Commercial         Personal
                                                Lines             Lines            Total
Wind and hail                             $           138    $          176   $         314
Hurricanes (1)                                        236                68             304
Wildfires                                              51               253             304
Winter storms                                           1                 3               4
Total catastrophe losses                              426               500             926
Less: reinsurance recoverable under the
property aggregate treaty (2)                         (43 )             (47 )           (90 )
Net catastrophe losses                    $           383    $          453   $         836


(1)Includes catastrophe losses from Hurricane Harvey and Hurricane Irma of $170
et $121, respectively.
(2)Refers to reinsurance recoverable under the Company's Property Aggregate
treaty. For further information on the treaty, refer to Part II, Item 7, MD&A -
Enterprise Risk Management - Insurance Risk.

Unfavorable (Favorable) Prior Accident Year Development for the Year Ended December 31, 2017

                                                                                                                                                                                                                                                                                                                Property &
                                                              Personal    Casualty Other   Total Property &
                                        Commercial Lines       Lines        Operations    Casualty Insurance
Workers' compensation                  $          (79 )    $         -    $           -   $            (79 )
Workers' compensation discount
accretion                                          28                -                -                 28
General liability                                  11                -                -                 11
Package business                                  (25 )              -                -                (25 )
Commercial property                                (8 )              -                -                 (8 )
Professional liability                              1                -                -                  1
Bond                                               32                -                -                 32
Automobile liability                               17                -                -                 17
Homeowners                                          -              (14 )              -                (14 )
Net asbestos reserves                               -                -                -                  -
Net environmental reserves                          -                -                -                  -
Catastrophes                                        -              (16 )              -                (16 )
Uncollectible reinsurance                         (15 )              -                -                (15 )
Other reserve re-estimates, net                    16               (7 )             18                 27

Total prior accident year development $ (22 ) $ (37 ) Dollars

                                        18   $            (41 )


For discussion of the factors contributing to unfavorable (favorable) prior
accident year reserve development, please refer to Note 11 - Reserve for Unpaid
Losses and Loss Adjustment Expenses of Notes to Consolidated Financial
Statements.
Property & Casualty Other Operations
Net reserves and reserve activity in Property & Casualty Other Operations are
categorized and reported as asbestos, environmental, and "all other". The "all
other" category of reserves covers a wide range of insurance and assumed
reinsurance coverages, including, but not limited to, potential liability for
construction defects, lead paint, silica, pharmaceutical products, head
injuries, molestation and other long-tail liabilities. In addition to various
insurance and assumed reinsurance exposures, "all other" includes unallocated
loss adjustment expense reserves. "All other" also includes the Company's
allowance for uncollectible reinsurance. When the Company commutes a ceded
reinsurance contract or settles a ceded

reinsurance dispute, net reserves for the related cause of loss (including
asbestos, environmental or all other) are increased for the portion of the
allowance for uncollectible reinsurance attributable to that commutation or
settlement.

                                                                                                                                                            59
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

                                                                                                                        P&C Other Operations
                       Total Reserves, Net of Reinsurance
                ((Image Removed: chart-f7f1f35a578d597cb98.jpg))
Asbestos and Environmental Reserves
The vast majority of the Company's exposure to A&E relates to policy coverages
provided prior to 1986, reported within the P&C Other Operations segment
("Run-off A&E"). In addition, since 1986, the Company has written asbestos and
environmental exposures under general liability policies and pollution liability
under homeowners policies, which are reported in the Commercial Lines and
Personal Lines segments.
                  Run-off A&E Summary as of December 31, 2019
                                                                                                                                                    Asbestos   Environmental    Total A&E
Gross
    Direct                          $  1,315$        353$    1,668
    Assumed Reinsurance                  477             62            539
    Total                              1,792            415          2,207
Ceded- other than NICO                  (484 )          (69 )         (553 )

Ceded – NICO A&E ADC "Run-off"(1) (434 ) (226 ) (660 )
Net

                                 $    874$        120$      994

(1) Including $660 of ceded losses for Run-off A&E and a $20 reduction in ceded

losses for Commercial Lines and Personal Lines, cumulative net incurred

losses of $640 have been ceded to NICO under an adverse development cover

reinsurance agreement. See the section that follows entitled A&E Adverse

                Development Cover for additional information.



                   Rollforward of Run-off A&E Losses and LAE
                                                 Asbestos             Environmental
2019
Beginning liability - net                    $           984   $            

151




Losses and loss adjustment expenses incurred               -                




Losses and loss adjustment expenses paid                (111 )                      (32 )
Reclassification of allowance for
uncollectible insurance (1)                                1                          1
Ending liability - net                       $           874   $                    120
L'année 2018
Beginning liability - net                    $         1,143   $                    182
Losses and loss adjustment expenses incurred               -                




Losses and loss adjustment expenses paid                (159 )                      (31 )
Reclassification of allowance for
uncollectible insurance (1)                                -                          -
Ending liability - net                       $           984   $                    151
2017
Beginning liability - net                    $         1,282   $                    234
Losses and loss adjustment expenses incurred               -                




Losses and loss adjustment expenses paid                (140 )                      (52 )
Reclassification of allowance for
uncollectible insurance (1)                                1                          -
Ending liability - net                       $         1,143   $                    182


(1) Related to the reclassification of an allowance for uncollectible
reinsurance from the "all other" category of P&C Other Operations reserves.
A&E Adverse Development Cover
Effective December 31, 2016, the Company entered into an A&E ADC reinsurance
agreement with NICO, a subsidiary of Berkshire, to reduce uncertainty about
potential adverse development. Under the A&E ADC, the Company paid a reinsurance
premium of $650 for NICO to assume adverse net loss and allocated loss
adjustment expense reserve development up to $1.5 billion above the Company's
existing net A&E reserves as of December 31, 2016 of approximately $1.7 billion,
including both Run-off A&E and A&E reserves in Commercial Lines and Personal
Lines. The $650 reinsurance premium was placed in a collateral trust account as
security for NICO's claim payment obligations to the Company. The Company has
retained the risk of collection on amounts due from other third-party reinsurers
and continues to be responsible for claims handling and other administrative
services, subject to certain conditions. The A&E ADC covers substantially all
the Company's A&E reserve development up to the reinsurance limit.
Under retroactive reinsurance accounting, net adverse A&E reserve development
after December 31, 2016 will result in an offsetting reinsurance recoverable up
to the $1.5 billion limit. Cumulative ceded losses up to the $650 reinsurance
premium paid are recognized as a dollar-for-dollar offset to net losses incurred
before ceding to the A&E ADC. Cumulative ceded losses exceeding the $650
reinsurance premium paid result in a deferred gain. The deferred gain will be
recognized over the claim

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








settlement period in the proportion of the amount of cumulative ceded losses
collected from the reinsurer to the estimated ultimate reinsurance recoveries.
Consequently, until periods when the deferred gain is recognized as a benefit to
earnings, cumulative adverse development of A&E claims after December 31, 2016
in excess of $650 may result in significant charges against earnings.
As of December 31, 2019, the Company has incurred a cumulative $640 in adverse
development on A&E reserves that have been ceded under the A&E ADC treaty with
NICO, including $660 for Run-off A&E reserves and ($20) for A&E reserves in
Commercial Lines and Personal Lines. As such, $860 of coverage is available for
future adverse net reserve development, if any.
Net and Gross Survival Ratios
Net and gross survival ratios are a measure of the quotient of the carried
reserves divided by average annual payments (net of reinsurance and on a gross
basis) and is an indication of the number of years that carried reserves would
last (i.e. survive) if future annual payments were consistent with the
calculated historical average.
Since December 31, 2016, asbestos and environmental net reserves have been
declining since all adverse development has been ceded to NICO, up to a limit of
$1.5 billion. Recoveries from NICO will not be collected until the Company has
cumulative loss payments of more than the $1.7 billion carrying value of net
reserves as of December 31, 2016. Accordingly, with no net incurred losses, the
payment of losses without any current collection of recoveries from NICO has
reduced the Company's net loss reserves which decreases the net survival ratios
such that, unadjusted, the net survival ratios would not be representative of
the true number of years of average loss payments covered by the reserves.
Therefore, the net survival ratios presented in the table below are calculated
before considering the effect of the A&E ADC reinsurance agreement but net of
other reinsurance in place.
                         Net and Gross Survival Ratios
                                  Asbestos Environmental

One year net survival ratio (1) 11.7 10.8
Three year net survival ratio (1) 9.5

                                            9.0

One year gross survival ratio 13.6 10.7
Three year gross survival ratio 10.1

                                            8.4


(1) As of December 31, 2019, the one year net survival ratios after considering
the ADC were 7.8 and 3.8 for asbestos and environmental,  respectively.  As of
December 31, 2019, the three year net survival ratios after considering the ADC
were 6.4 and 3.1, respectively.

            Run-off A&E Paid and Incurred Losses and LAE Development
                                           Asbestos                                       Environmental
                         Paid Losses & LAE      Incurred Losses & LAE      Paid Losses & LAE       Incurred Losses & LAE
2019
Gross                  $             131      $               115       $               39       $                 95
Ceded- other than NICO               (20 )                    (39 )                     (7 )                      (39 )
Ceded - NICO A&E ADC                   -                      (76 )                      -                        (56 )
Net                    $             111      $                 -       $               32       $                  -
L'année 2018
Gross                  $             213      $               249       $               47       $                 83
Ceded- other than NICO               (54 )                    (85 )                    (16 )                      (12 )
Ceded - NICO A&E ADC                   -                     (164 )                                               (71 )
Net                    $             159      $                 -       $               31       $                  -
2017
Gross                  $             190      $               317       $               63       $                123
Ceded- other than NICO               (50 )                   (123 )                    (11 )                      (24 )
Ceded - NICO A&E ADC                   -                     (194 )                      -                        (99 )
Net                    $             140      $                 -       $               52       $                  -


Annual Reserve Reviews
Review of Asbestos and Environmental Reserves
The Company performs its regular comprehensive annual review of asbestos and
environmental reserves in the fourth quarter, including both Run-off A&E (P&C
Other Operations) and asbestos and environmental reserves included in Commercial
Lines and Personal Lines. As part of the evaluation of asbestos reserves in the
fourth quarter of 2019, the Company reviewed all of its open direct domestic
insurance accounts exposed to asbestos liability, as well as assumed reinsurance
accounts. As part of its evaluation of environmental reserves in the fourth
quarter of 2019, the Company reviewed all of its open direct domestic insurance
accounts exposed to environmental liability, as well as assumed reinsurance
accounts.
2019 comprehensive annual reviews
During the 2019 fourth quarter review, the Company increased estimated asbestos
reserves before NICO reinsurance in P&C Other Operations by $76, primarily due
to an increase in average settlement values, most notably from mesothelioma
claims, driven by elevated plaintiff demands.  In addition, cost-sharing
agreements and settlements with certain insureds reduced the uncertainty of the
Company's asbestos liability but resulted in a reserve increase.  Partially
offsetting the adverse development was a decrease in the number of claim
filings, most notably from mesothelioma claims.
As a result of the 2019 fourth quarter review, the Company increased estimated
environmental reserves before NICO reinsurance in P&C Other Operations by $56,
primarily due to

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regulatory remediation requirements that changed in 2019 for certain sites
polluted by coal ash and resulted in more costly and extensive remediation
plans, a higher than anticipated number of claims associated with per &
polyfluoroalkyl substances (PFAS), and increased defense and cleanup costs
associated with Superfund sites.
The total $132 increase in asbestos and environmental reserves in P&C Other
Operations was offset by a $132 reinsurance recoverable under the NICO treaty.
Including a reduction of asbestos and environmental reserves in Commercial Lines
and Personal Lines, the net increase in A&E reserves in 2019 was $117 offset by
un $117 increase in reinsurance recoverables under the NICO treaty.
2018 comprehensive annual reviews
During the 2018 fourth quarter review of asbestos reserves, the Company
increased estimated reserves before NICO reinsurance in P&C Other Operations by
$164, primarily due to an increase in average mesothelioma settlement values
driven by elevated plaintiff demands and defendant bankruptcies. The rise in
plaintiff demands also resulted in higher than anticipated defense costs for a
small subset of peripheral defendants with a high concentration of asbestos
filings in specific, adverse jurisdictions. In addition, the Company observed
unfavorable developments in the application of coverage that resulted in
increased liability shares on certain insureds. An increase in reserves from
umbrella and excess policies in the 1981-1985 policy years contributed to the
adverse development.
As a result of the 2018 fourth quarter review of environmental reserves, the
Company increased estimated reserves before NICO reinsurance by $71 due to
increased defense and clean-up costs associated with increasingly complex
remediation plans at Superfund sites, intensifying regulatory scrutiny by state
agencies (particularly in the Pacific Northwest), and increased liability shares
due to unavailability of other responsible parties.
The total $235 increase in asbestos and environmental reserves in P&C Other
Operations was offset by a $235 reinsurance recoverable under the NICO treaty.
Including an increase in asbestos and environmental reserves in Commercial Lines
and Personal Lines, the net increase in A&E reserves in 2018 was $238 offset by
un $238 increase in reinsurance recoverables under the NICO treaty
For information regarding the 2017 comprehensive annual review, please refer to
Part 2, Item 7, Management's Discussion and Analysis of Financial Condition and
Results of Operations in The Hartford's 2018 Form 10-K Annual Report.
Major Categories of Asbestos Accounts
Direct asbestos exposures include both Known and Unallocated Direct Accounts.
•   Known Direct Accounts- includes both Major Asbestos Defendants and Non-Major

Accounts, and represent approximately 73% of the Company's total Direct gross

asbestos reserves as of December 31, 2019 compared to approximately 70% as of

December 31, 2018. Major Asbestos Defendants have been defined as the "Top

70" accounts in Tillinghast's published Tiers 1 and 2 and Wellington

accounts, while Non-Major accounts are comprised of all other direct asbestos

accounts and largely represent smaller and more peripheral defendants. Major

Asbestos Defendants have the fewest number of asbestos accounts.
• Unallocated Direct Accounts- includes an estimate of the reserves necessary

for asbestos claims related to direct insureds that have not previously

tendered asbestos claims to the Company and exposures related to liability

claims that may not be subject to an aggregate limit under the applicable

policies. These exposures represent approximately 27% of the Company's Direct

gross asbestos reserves as of December 31, 2019 compared to approximately 30%

as of December 31, 2018.












Review of "All Other" Reserves in Property & Casualty Other Operations
In the fourth quarters of 2019, 2018 and 2017, the Company completed evaluations
of certain of its non-asbestos and non-environmental reserves in Property &
Casualty Other Operations, including unallocated loss adjustment expense
reserves and the allowance for uncollectible reinsurance.  Overall prior year
development on all other reserves resulted in increases of $21, $65 et $18,
respectively for calendar years 2019, 2018 and 2017.  Included in the 2019
adverse reserve development was a $37 increase in reserves for unallocated loss
adjustment expenses, primarily due to an increase in expected aggregate claim
handling costs associated with asbestos and environmental claims, as well as
higher than anticipated ULAE costs in recent years, prompting an increase in the
projected ULAE run rate.
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. During the
fourth quarters of 2019, 2018 and 2017, the Company completed its annual
evaluations of the collectibility of the reinsurance recoverables and the
adequacy of the allowance for uncollectible reinsurance associated with older,
long-term casualty liabilities reported in Property & Casualty Other
Operations.  In conducting these evaluations, the company used its most recent
detailed evaluations of ceded liabilities reported in the segment.  The Company
analyzed the overall credit quality of the Company's reinsurers, recent trends
in arbitration and litigation outcomes in disputes between cedants and
reinsurers, and recent developments in commutation activity between reinsurers
and cedants. As of December 31, 2019, 2018, and 2017 the allowance for
uncollectible reinsurance for Property & Casualty Other Operations totaled $71,
$105 et $86, respectively.  Due to the inherent uncertainties as to collection
and the length of time before reinsurance recoverables become due, particularly
for older, long-term casualty liabilities, it is possible that future
adjustments to the Company's reinsurance recoverables, net of the allowance,
could be required.
Impact of Re-estimates on Property and Casualty Insurance Product Reserves
Estimating property and casualty insurance product reserves uses a variety of
methods, assumptions and data elements. Ultimate losses may vary materially from
the current estimates. Many factors can contribute to these variations and the
need to change the previous estimate of required reserve levels. Prior accident
year reserve development is generally due to the emergence of additional facts
that were not known or anticipated

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at the time of the prior reserve estimate and/or due to changes in
interpretations of information and trends.
The table below shows the range of annual reserve re-estimates experienced by
The Hartford over the past ten years. The amount of prior accident year
development (as shown in the reserve rollforward) for a given calendar year is
expressed as a percent of the beginning calendar year reserves, net of
reinsurance. The ranges presented are significantly influenced by the facts and

circumstances of each particular year and by the fact that only the last ten
years are included in the range. Accordingly, these percentages are not intended
to be a prediction of the range of possible future variability. For further
discussion of the potential for variability in recorded loss reserves, see
Preferred Reserving Methods by Line of Business and Impact of Key Assumptions on
Reserves sections.
  Range of Prior Accident Year Unfavorable (Favorable) Development for the Ten
                         Years Ended December 31, 2019
                                                                  Property &
                                                                   Casualty      Total
                                                     Personal       Other      Property &
                                 Commercial Lines     Lines       Operations  Casualty (1)
Annual range of prior accident
year unfavorable (favorable)
development for the ten years                                                   (1.1%) -
ended December 31, 2019            (2.9%) - 1.0%   (6.9%) - 8.3%  0.9% - 9.8%     2.4%

(1) Excluding the reserve increases for asbestos and environmental reserves, over

the past ten years, reserve re-estimates for total property and casualty

insurance ranged from (2.5%) to 1.0%.












The potential variability of the Company's property and casualty insurance
product reserves would normally be expected to vary by segment and the types of
loss exposures insured by those segments. Illustrative factors influencing the
potential reserve variability for each of the segments are discussed under
Critical Accounting Estimates for Property & Casualty Insurance Product Reserves
and Asbestos and Environmental Reserves. See the section entitled Property &
Casualty Other Operations, Annual Reserve Reviews about the impact that the A&E
ADC retroactive reinsurance agreement with NICO may have on net reserve changes
of asbestos and environmental reserves going forward.

The following table summarizes the effect of reserve re-estimates, net of
reinsurance, on calendar year operations for the ten-year period ended
December 31, 2019. The total of each column details the amount of reserve
re-estimates made in the indicated calendar year and shows the accident years to
which the re-estimates are applicable. The amounts in the total column on the
far right represent the cumulative reserve re-estimates during the ten year
period ended December 31, 2019 for the indicated accident year in each row. This
table does not include Navigators Group reserve re-estimates for periods prior
to the acquisition of the business on May 23, 2019.
         Effect of Net Reserve Re-estimates on Calendar Year Operations
                                                                  Calendar Year
                             2010    2011    2012    2013    2014    2015    2016    2017     2018    2019     Total
By Accident Year
2009 & Prior               $ (196 )$ 122$ (43 )$ (36 )$ 352$ 334$ 301$  71$  (38 )$  50$   917
2010                                  245       3      61     (22 )    16      15      16        1     (12 )     323
2011                                           36     148      (4 )    12      (6 )     6       11     (19 )     184
2012                                                   19       -     (55 )   (35 )   (12 )    (15 )   (15 )    (113 )
2013                                                          (98 )   (43 )   (29 )   (33 )     (2 )   (26 )    (231 )
2014                                                                  (14 )    20     (19 )    (54 )   (29 )     (96 )
2015                                                                          191     (41 )    (93 )    19        76
2016                                                                                  (29 )     14     (11 )     (26 )
2017                                                                                             9    (116 )    (107 )
2018                                                                                                    78        78
Increase (decrease) in net
reserves (1) (2)           $ (196 )$ 367$  (4 )$ 192$ 228$ 250

$ 457$ (41 )$ (167 )$ (81 )$ 1,005

(1) For the 2019 calendar year, net favorable prior accident year development

recognized in the consolidated statement of operations was $65 rather than

$81 as shown in this table as the Company recognized a $16 deferred gain on

retroactive reinsurance. See Note 2 – Business Acquisitions of Notes to

Consolidated Financial Statements.

(2) For calendar years before 2017, the 2009 and prior accident year development

includes adverse development for A&E reserves. Beginning with the 2017

calendar year, A&E reserve development has been ceded to NICO.












The commentary below explains, by accident year, the total prior accident year
development recognized over the past 10 years.
Accident years 2009 and Prior
The net increases in estimates of ultimate losses for accident
years 2009 and prior are driven mostly by increased reserves for
asbestos and environmental reserves, and also by increased

estimates for customs bonds and other mass torts claims.
Partially offsetting these reserve increases was favorable
development in general liability and workers' compensation.
Additionally, reserves for professional liability were reduced due
to a lower estimate of claim severity in both directors' and
officers' and errors and omissions insurance claims. Reserves for

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personal automobile liability claims were reduced largely due to
improvement in emerged claim severity.
Accident years 2010 and 2011
Unfavorable changes in estimates of ultimate losses on accident
years 2010 and 2011 were primarily related to workers'
compensation and commercial automobile liability. Workers'
compensation loss cost trends were higher than initially expected
as an increase in frequency outpaced a moderation of severity
trends. Unfavorable commercial automobile liability reserve re-estimates were
driven by higher frequency of large loss bodily
injury claims.
Accident years 2012 and 2013
Estimates of ultimate losses were decreased for accident years
2012 and 2013 due to favorable frequency and/or medical
severity trends for workers' compensation and favorable professional liability
claim emergence. Favorable
emergence of property lines of business, including catastrophes,
for the 2013 accident year, is partially offset by increased
reserves in automobile liability due to increased severity of large
claims.
Accident years 2014 and 2015
Changes in estimates of ultimate losses for accident years 2014
and 2015 were largely driven by unfavorable frequency and
severity trends for personal and commercial automobile liability,
increased severity of liability claims on package business and increased
estimated severity on the acquired Navigators Group book of business related to
U.S construction, premises liability, products liability and excess casualty
offset by favorable frequency and medical severity trends for
workers' compensation.
Accident year 2016
Estimates of ultimate losses were decreased for the 2016
accident year largely due to reserve decreases on short-tail lines
of business, where results emerge more quickly, and workers' compensation due to
lower estimated claim severity, somewhat offset by unfavorable reserve estimates
for higher hazard general
liability exposures due to increased frequency and severity
trends, higher estimated severity in middle & large commercial and on the
acquired Navigators Group book of business related to U.S construction, premises
liability, products liability and excess casualty
Accident year 2017
Ultimate loss estimates were decreased for the 2017 accident
year mainly due to favorable reserve estimates in personal auto liability due to
emergence of lower estimated severity, workers' compensation related to lower
than previously estimated claim severity and release of reserves related to
catastrophes, somewhat offset by increases in estimates of ultimate losses in
general liability and bond. Partially offsetting was an increase to general
liability reserves that was related to higher hazard exposures which experienced
increased frequency and severity trends. In addition, unfavorable bond reserve
re-estimates were driven by large claims.
Accident year 2018
Ultimate loss estimates were increased for the 2018 accident
year mainly due to commercial auto liability, and professional liability.
Commercial auto liability was related to higher estimated severity on national
accounts. On the Navigators

Group book of business, reserve increases for professional liability was related
to large loss activity and increased estimated severity on directors and
officers reserves.
Group Benefit LTD Reserves, Net of Reinsurance
The Company establishes reserves for group life and accident & health contracts,
including long-term disability coverage, for both outstanding reported claims
and claims related to insured events that the Company estimates have been
incurred but have not yet been reported. These reserve estimates can change over
time based on facts and interpretations of circumstances, and consideration of
various internal factors including The Hartford's experience with similar cases,
claim payment patterns, loss control programs and mix of business. In addition,
the reserve estimates are influenced by various external factors including court
decisions and economic conditions. The effects of inflation are implicitly
considered in the reserving process. Long-tail claim liabilities are discounted
because the payment pattern and the ultimate costs are reasonably fixed and
determinable on an individual claim basis. The majority of Group Benefits'
reserves are for LTD claimants who are known to be disabled and are currently
receiving benefits. The Company held $6,616 et $6,767 of LTD unpaid losses and
loss adjustment expenses, net of reinsurance, as of December 31, 2019 and 2018,
respectively.
Reserving Methodology
How Reserves are Set - A Disabled Life Reserve ("DLR") is calculated for each
LTD claim. The DLR for each claim is the expected present value of all future
benefit payments starting with the known monthly gross benefit which is reduced
for estimates of the expected claim recovery due to return to work or claimant
death, offsets from other income including offsets from Social Security
benefits, and discounting where the discount rate is tied to expected investment
yield at the time the claim is incurred. Estimated future benefit payments
represent the monthly income benefit that is paid until recovery, death or
expiration of benefits. Claim recoveries are estimated based on claim
characteristics such as age and diagnosis and represent an estimate of benefits
that will terminate, generally as a result of the claimant returning to work or
being deemed able to return to work. For claims recently closed due to recovery,
a portion of the DLR is retained for the possibility that the claim reopens upon
further evidence of disability.  In addition, a reserve for estimated unpaid
claim expenses is included in the DLR.
The DLR also includes a liability for potential payments to pending claimants
beyond the elimination period who have not yet been approved for LTD. In these
cases, the present value of future benefits is reduced for the likelihood of
claim denial based on Company experience.
Estimates for incurred but not reported ("IBNR") claims are made by applying
completion factors to expected emerged experience by line of business.  Included
within IBNR are bulk reserves for claims reported but still within the waiting
period until benefits are paid, typically 3 or 6 months depending on the
contract.  Completion factors are derived from standard actuarial techniques
using triangles that display historical claim count emergence by incurral month.
These estimates are reviewed for reasonableness and are adjusted for current
trends and other factors expected to cause a change in claim emergence. The

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reserves include an estimate of unpaid claim expenses, including a provision for
the cost of initial set-up of the claim once reported.
For all products, including LTD, there is a period generally ranging from two to
twelve months, depending on the product and line of business, where emerged
claims for an incurral year are not yet credible enough to be a basis for
estimating reserves.  In these cases, the ultimate loss is estimated using
earned premium multiplied by an expected loss ratio based on pricing assumptions
of claim incidence, claim severity, and earned pricing.
Current Trends Contributing to Reserve Uncertainty
In group insurance, LTD has the longest pattern of loss emergence and the
highest reserve amount. One significant risk to the reserve would be a slowdown
in recoveries. In particular, the economic environment can affect the ability of
a disabled employee to return-to-work and the length of time an employee
receives disability benefits. Another significant risk is a change in benefit
offsets. Often the Company pays a reduced benefit due to offsets from other
income sources such as pensions or Social Security Disability Insurance
("SSDI"). Possible changes to the frequency, timing, or amount of offsets, such
as a change in SSDI approval standards or benefit offerings, create a risk that
the amount to settle open claims will exceed initial estimates. Since the
monthly income benefit for a claimant is established based on the individual's
salary at the time of disability and the level of coverages and benefits
provided, inflation is not considered a significant risk to the reserve
estimate. Few of the Company's LTD policies provide for cost of living
adjustments to the monthly income benefit.
Impact of Key Assumptions on Reserves
The key assumptions affecting our group life and accident & health reserves
including disability include:
Discount Rate - The discount rate is the interest rate at which expected future
claim cash flows are discounted to determine the present value. A higher
selected discount rate results in a lower reserve. If the discount rate is
higher than our future investment returns, our invested assets will not earn
enough investment income to cover the discount accretion on our claim reserves
which would negatively affect our profits. For each incurral year, the discount
rates are estimated based on investment yields expected to be earned net of
investment expenses. The incurral year is the year in which the claim is
incurred and the estimated settlement pattern is determined. Once established,
discount rates for each incurral year are unchanged except that LTD reserves
assumed from the acquisition of Aetna's U.S. group life and disability business
are all discounted using current rates as of the November 1, 2017 acquisition
date. The weighted average discount rate on LTD reserves was 3.4% in 2019 and
2018. Had the discount rate for each incurral year been 10 basis points lower at
the time they were established, our LTD unpaid loss and loss adjustment expense
reserves would be higher by $30, pretax, as of December 31, 2019.
Claim Termination Rates (inclusive of mortality, recoveries, and expiration of
benefits) - Claim termination rates are an estimate of the rate at which
claimants will cease receiving benefits during a

given calendar year. Terminations result from a number of factors, including
death, recoveries and expiration of benefits. The probability that benefits will
terminate in each future month for each claim is estimated using a predictive
model that uses past Company experience, contract provisions, job
characteristics and other claimant-specific characteristics such as diagnosis,
time since disability began, and age. Actual claim termination experience will
vary from period to period. Over the past 8 years, claim termination rates for a
single incurral year have generally increased and have ranged from 5% below to
6% above current assumptions over that time period. For a single recent incurral
year (such as 2019), a one percent decrease in our assumption for LTD claim
termination rates would increase our reserves by $9. For all incurral years
combined, as of December 31, 2019, a one percent decrease in our assumption for
our LTD claim termination rates would increase our Group Benefits unpaid losses
and loss adjustment expense reserves by $22.
Evaluation of Goodwill for Impairment
Current Evaluation for Goodwill Impairment
Goodwill balances are reviewed for impairment at least annually, or more
frequently if events occur or circumstances change that would indicate that a
triggering event for a potential impairment has occurred. The goodwill
impairment test follows a two-step process. In the first step, the fair value of
a reporting unit is compared to its carrying value. If the carrying value of a
reporting unit exceeds its fair value, the second step of the impairment test is
performed for purposes of measuring the impairment. In the second step, the fair
value of the reporting unit is allocated to all of the assets and liabilities of
the reporting unit to determine an implied goodwill value. If the carrying
amount of the reporting unit's goodwill exceeds the implied goodwill value, an
impairment loss is recognized in an amount equal to that excess, not to exceed
the goodwill carrying value.
The estimated fair value of each reporting unit incorporates multiple inputs
into discounted cash flow calculations including assumptions that market
participants would make in valuing the reporting unit. Assumptions include
levels of economic capital, future business growth, earnings projections, assets
under management for Hartford Funds, and the weighted average cost of capital
used for purposes of discounting. Decreases in business growth, decreases in
earnings projections and increases in the weighted average cost of capital will
all cause a reporting unit's fair value to decrease, increasing the possibility
of impairment.
A reporting unit is defined as an operating segment or one level below an
operating segment. The Company's reporting units, for which goodwill has been
allocated consist of Commercial Lines, Personal Lines, Group Benefits, and
Hartford Funds.
The carrying value of goodwill is $1,913 as of December 31, 2019 and is
comprised of $661 for Commercial Lines, $119 for Personal Lines, $861 for Group
Benefits, and $272 for Hartford Funds.
The annual goodwill assessment for the reporting units was completed as of
October 31, 2019, and resulted in no write-downs of goodwill for the year ended
December 31, 2019. All reporting units passed the first step of the annual
impairment test with a significant margin. For information regarding the 2018
et

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2017 impairment tests see Note 10 -Goodwill & Other Intangible Assets of Notes
to Consolidated Financial Statements.
Future Accounting Change Contributing to Uncertainty for Goodwill Impairment
Effective January 1, 2020, the Company will adopt updated accounting guidance on
recognition and measurement of goodwill impairment, as required. The updated
guidance requires recognition and measurement of goodwill impairment based on
the excess of the carrying value of the reporting unit over its estimated fair
value, up to the amount of the reporting unit's goodwill. Since the estimated
fair value of the reporting unit will no longer be allocated to the assets and
liabilities of the reporting unit to determine an implied goodwill value, under
the updated guidance, changes in market-based factors are more likely to result
in a goodwill impairment, whether a reporting unit's fair value is estimated
using an income approach or a market approach. For example, changes in the
weighted average cost of capital that is used to discount expected cash flows
under the income approach or changes in market-based factors such as peer
company price to earnings multiples or price to book multiples under a market
approach can significantly affect changes to the estimated fair value of each
reporting unit and such changes could result in impairments that have a material
effect on our results of operations and financial condition.
Valuation of Investments and Derivative Instruments
Fixed Maturities, Equity Securities, Short-term Investments and Derivatives
The Company generally determines fair values using valuation techniques that use
prices, rates, and other relevant information evident from market transactions
involving identical or similar instruments. Valuation techniques also include,
where appropriate, estimates of future cash flows that are converted into a
single discounted amount using current market expectations. The Company uses a
"waterfall" approach comprised of the following pricing sources which are listed
in priority order: quoted prices, prices from third-party pricing services,
internal matrix pricing, and independent broker quotes. The fair value of
derivative instruments are determined primarily using a discounted cash flow
model or option model technique and incorporate counterparty credit risk. À
some cases, quoted market prices for exchange-traded transactions and
transactions cleared through central clearing houses ("OTC-cleared") may be used
and in other cases independent broker quotes may be used. For further
discussion, see the Fixed Maturities, Equity Securities, Short-term Investments
and Derivatives section in Note 5 - Fair Value Measurements of Notes to
Consolidated Financial Statements.
Evaluation of OTTI on Available-for-sale Securities and Valuation Allowances on
Mortgage Loans
Each quarter, a committee of investment and accounting professionals evaluates
investments to determine if an other-than-temporary impairment ("impairment") is
present for AFS securities or a valuation allowance is required for mortgage
prêts.

This evaluation is a quantitative and qualitative process, which is subject to
risks and uncertainties. For further discussion of the accounting policies, see
the Significant Investment Accounting Policies Section in Note 1 - Basis of
Presentation and Significant Accounting Policies of Notes to Consolidated
Financial Statements. For a discussion of impairments recorded, see the
Other-than-temporary Impairments within the Investment Portfolio Risks and Risk
Management section of the MD&A.
Valuation Allowance on Deferred Tax Assets
Deferred tax assets represent the tax benefit of future deductible temporary
differences and certain tax carryforwards. Deferred tax assets are measured
using the enacted tax rates expected to be in effect when such benefits are
realized if there is no change in tax law. Under U.S. GAAP, we test the value of
deferred tax assets for impairment on a quarterly basis at the entity level
within each tax jurisdiction, consistent with our filed tax returns. Deferred
tax assets are reduced by a valuation allowance if, based on the weight of
available evidence, it is more likely than not that some portion, or all, of the
deferred tax assets will not be realized. The determination of the valuation
allowance for our deferred tax assets requires management to make certain
judgments and assumptions. In evaluating the ability to recover deferred tax
assets, we have considered all available evidence as of December 31, 2019,
including past operating results, forecasted earnings, future taxable income,
and prudent and feasible tax planning strategies. In the event we determine it
is more likely than not that we will not be able to realize all or part of our
deferred tax assets in the future, an increase to the valuation allowance would
be charged to earnings in the period such determination is made. Likewise, if it
is later determined that it is more likely than not that those deferred tax
assets would be realized, the previously provided valuation allowance would be
reversed. Our judgments and assumptions are subject to change given the inherent
uncertainty in predicting future performance and specific industry and
investment market conditions.
As of December 31, 2019, the Company has recorded a valuation allowance of $4
against foreign deferred tax assets for foreign NOLs. As of December 31, 2018,
the Company had no valuation allowance on U.S. NOL's. The U.S. NOL carryovers,
if unused, would expire between 2028 and 2036. The foreign NOLs do not expire.
As of December 31, 2019, the Company projects there will be sufficient future
taxable income to fully recover the remainder of the NOL carryover for which
benefits have been recognized, though the Company's estimate of the likely
realization may change over time. As of December 31, 2019 the Company had
remaining AMT credit carryovers of $410 which are reflected as a current income
tax receivable within other assets in the accompanying Condensed Consolidated
Balance Sheets. AMT credits may be used to offset a regular tax liability for
any taxable year beginning after December 31, 2017, and are refundable at an
amount equal to 50 percent of the excess of the minimum tax credit for the
taxable year over the amount of credit allowable for the year against regular
tax liability. Any remaining credits not used against regular tax liability are
refundable in the 2021 tax year to be realized in 2022. For additional
information about Tax Reform, see Note - 16, Income Taxes of Notes to
Consolidated Financial Statements.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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In assessing the need for a valuation allowance, management considered future
taxable temporary difference reversals, future taxable income exclusive of
reversing temporary differences and carryovers, taxable income in open carry
back years and other tax planning strategies. From time to time, tax planning
strategies could include holding a portion of debt securities with market value
losses until recovery, altering the level of tax exempt securities held, making
investments which have specific tax characteristics, and business considerations
such as asset-liability matching. Management views such tax planning strategies
as prudent and feasible, and would implement them, if necessary, to realize the
deferred tax assets.
Contingencies Relating to Corporate Litigation and Regulatory Matters
Management evaluates each contingent matter separately. A loss is recorded if
probable and reasonably estimable. Management establishes reserves for these
contingencies at its "best estimate," or, if no one number within the range of
possible losses is more probable than any other, the Company records an
estimated reserve at the low end of the range of losses.

The Company has a quarterly monitoring process involving legal and accounting
professionals. Legal personnel first identify outstanding corporate litigation
and regulatory matters posing a reasonable possibility of loss. These matters
are then jointly reviewed by accounting and legal personnel to evaluate the
facts and changes since the last review in order to determine if a provision for
loss should be recorded or adjusted, the amount that should be recorded, and the
appropriate disclosure. The outcomes of certain contingencies currently being
evaluated by the Company, which relate to corporate litigation and regulatory
matters, are inherently difficult to predict, and the reserves that have been
established for the estimated settlement amounts are subject to significant
changements. Management expects that the ultimate liability, if any, with respect to
such lawsuits, after consideration of provisions made for estimated losses, will
not be material to the consolidated financial condition of the Company. 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 and
liquidity in a particular quarterly or annual period.


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Part II - Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

SEGMENT OPERATING SUMMARIES
COMMERCIAL LINES


Results of Operations
                              Underwriting Summary
                                            2019      2018      2017
Written premiums                          $ 8,452$ 7,136$ 6,956
Change in unearned premium reserve            162        89        91
Earned premiums                             8,290     7,047     6,865
Fee income                                     35        34        37

Losses and loss adjustment expenses
Current accident year before catastrophes 4,913 4,037 3,961
Current accident year catastrophes (1) 323 275 383
Prior accident year development (1)

                                            (44 )    (200 )     (22 )

Total losses and loss adjustment expenses 5,192 4,112 4,322
Amortization of DAC

                                                                                                    1,296     1,048     1,009
Underwriting expenses                       1,600     1,369     1,347

Amortization of other intangible assets 18 4 1
Dividends to policyholders

                                                                                    30        23        35
Underwriting gain                             189       525       188
Net servicing income                            2         2         1
Net investment income (2)                   1,129       997       949

Net realized capital gains (losses) (2) 271 (43 ) 103
Loss on reinsurance transaction

                                                            (91 )       -         -
Other income (expenses)                       (38 )      (2 )       1
Income before income taxes                  1,462     1,479     1,242
 Income tax expense (3)                       270       267       377
Net income                                $ 1,192$ 1,212$   865

(1) For discussion of current accident year catastrophes and prior accident year

development, see MD&A – Critical Accounting Estimates, Property and Casualty

Insurance Product Reserves Development, Net of Reinsurance.

(2) For discussion of consolidated investment results, see MD&A – Investment

Results.

(3) For discussion of income taxes, see Note 16 – Income Taxes of Notes to

                Consolidated Financial Statements.


                                Premium Measures
                                                       2019          2018          2017
Small commercial new business premium              $       646$       600$       552
Middle market new business premium                         584           540           466
Small commercial policy count retention                     83 %          82 %          84 %
Middle market policy count retention (1)                    80 %          78 %          78 %
Standard commercial lines renewal written price
increases (1) (2)                                          2.7 %         2.4 %         3.3 %
Standard commercial lines renewal earned price
increases (1) (2)                                          2.3 %         3.0 %         2.8 %
Small commercial premium retention                          85 %          84 %          88 %
Middle market premium retention (1)                         84 %          83 %          82 %
Small commercial policies in-force as of end of
period (in thousands)                                    1,291         1,271         1,266
Middle market policies in-force as of end of
period (in thousands) (1)                                   62            64            66


(1) Excludes certain risk classes of higher hazard general liability in middle

market.

(2) Small commercial and middle market lines within middle & large commercial are

                generally referred to as standard commercial lines.



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Part II - Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

                              Underwriting Ratios
                                                    2019        2018        2017
Loss and loss adjustment expense ratio
Current accident year before catastrophes             59.3        57.3      

57.7




Current accident year catastrophes                     3.9         3.9      

5.6




Prior accident year development                       (0.5 )      (2.8 )      (0.3 )
Total loss and loss adjustment expense ratio          62.6        58.4        63.0
Expense ratio                                         34.7        33.9        33.8
Policyholder dividend ratio                            0.4         0.3         0.5
Combined ratio                                        97.7        92.6        97.3
Current accident year catastrophes and prior
year development                                       3.4         1.1      

5.3




Current accident year change in loss reserves
upon acquisition of a business (1)                     0.3           -           -
Underlying combined ratio                             94.0        91.5        92.0

(1) Upon acquisition of Navigators Group and a review of Navigators Insurers

reserves, the year ended December 31, 2019 included $68 of prior accident

year reserve increases and $29 of current accident year reserve increases

which were excluded for the purposes of the underlying combined ratio

calculation.












2020 Outlook
The Company expects higher Commercial Lines written premiums in 2020, largely
driven by the inclusion of a full year of written premium from the Navigators
Group acquisition. Apart from the Navigators Group acquisition, the Company
expects both new business and premium renewal retention to be relatively flat
compared with 2019 as a modest increase in new and renewal premium for middle
and large commercial, driven in part by continued growth in industry verticals,
is expected to offset a modest decrease in small commercial new business.
Management expects positive renewal written pricing in all lines of business
except workers' compensation, which is expected to be flat to slightly positive
in middle market and down in small commercial. In addition to the impact of
pricing trends, written premium growth in 2019 will depend on economic
conditions as economic growth is expected to moderate in 2020 while the interest
rate environment will also put pressure on pricing.
Pricing varies significantly by product line with mid-single digit pricing
increases expected in property and general liability and high single to low
double digit written pricing increases expected in commercial automobile. À
workers' compensation, given favorable profitability trends, rates are expected
to continue to decline in 2020, particularly in small commercial. Aussi,
2020 rates are expected to remain firm in global specialty where increases are
expected in international, wholesale and financial lines.
The Company expects the Commercial Lines combined ratio will be between
approximately 95.5 and 97.5 for 2020, compared to 97.7 in 2019, primarily due to
lower current accident year catastrophe losses expected in 2020, partially
offset by less favorable prior year development. The underlying combined ratio
is expected to be flat to slightly lower as earned pricing increases in excess
of moderate increases in loss costs in most lines will be largely offset by
continued margin compression in workers' compensation, while the expense ratio
is expected to be down slightly. Current accident year catastrophes are assumed
to be 2.9 points of the combined ratio in 2020 compared to 3.9 points in 2019.

                                   Net Income
                ((Image Removed: chart-2f47b3bec26d5347b9f.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Net income decreased slightly in 2019 due to $91 before tax of ADC ceded premium
and a lower underwriting gain, largely offset by a shift from net realized
capital losses in 2018 to net realized capital gains in 2019 and higher net
investment income.
Contributing to the increase in net investment income was income on invested
assets acquired from Navigators Group and higher income from limited
partnerships and alternative investments. For further discussion of investment
results, see MD&A - Investment Results.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

                                                                                                                            Underwriting Gain
                ((Image Removed: chart-b41a6841ede55b6486c.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Underwriting gain decreased in 2019, primarily due to a decrease in net
favorable prior year development, including $97 before tax of increases to
Navigators Group reserves upon acquisition of the business, higher expenses, a
higher current accident year loss and loss adjustment expense ratio before
catastrophes, and higher catastrophe losses, partially offset by the effect of
higher earned premium, excluding Navigators Group. Higher commissions
contributed to the increase in amortization of DAC. Contributing to the increase
in underwriting expenses was the effect of higher information technology and
operations costs in middle market as well as higher operations and other costs
in small commercial associated with the 2018 renewal rights agreement with
Farmers Group to acquire its Foremost-branded small commercial business.
Additionally, the acquisition of Navigators Group contributed to the increase in
earned premiums with a corresponding increase to losses and loss adjustment
expenses, amortization of DAC and underwriting expenses. Apart from the effect
de Navigators Group acquisition, earned premiums increased in all commercial
lines of business.

                                Earned Premiums
                ((Image Removed: chart-d13d0ec1db5c596eb4d.jpg))

(1) Other of $42, $45et $46 for 2019, 2018, and 2017, respectively, is

included in the total.












Year ended December 31, 2019 compared to the year ended December 31, 2018
Earned premiums increased in 2019 reflecting written premium growth over the
preceding twelve months.
Written premiums increased in 2019 with growth across small commercial, middle &
large commercial, and global specialty, including growth from the acquisition of
Navigators Group. In standard commercial lines, renewal written pricing
increased in 2019, mostly attributable to higher written pricing in property and
general liability lines, partially offset by larger rate decreases in small
commercial workers' compensation. New business premium in small commercial and
middle market increased over the prior year, with increases in package business
and workers' compensation in small commercial and property and industry
verticals in middle market.
•  Small commercial written premium increased primarily driven by having a full

year's premium from the business acquired under a 2018 renewal rights

agreement with Farmers Group to acquire its Foremost-branded small commercial

business, offset by lower renewal premium in workers' compensation.

• Middle & large commercial written premium growth was primarily due to new

business growth, the acquisition of Navigators Group and higher renewal

premium in core middle market lines, as well as growth in certain industry

            verticals, including construction and energy. The increase in renewal



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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








premium was due to renewal written price increases across most lines and higher
audit premium.
•  Global specialty written premium increased in 2019 driven by the acquisition
   of Navigators Group as well as growth in financial products and bond.


          Current Accident Year Loss and LAE Ratio before Catastrophes
                ((Image Removed: chart-ff86a219796c524a9a9.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Current Accident Year Loss and LAE ratio before catastrophes increased in 2019
primarily due to a higher loss and loss adjustment expense ratio on the acquired
Navigators Group business and higher non-catastrophe property losses in small
commercial package business and middle market inland marine as well as a higher
loss and loss adjustment expense ratio in workers' compensation due to rate
decreases.
Included in current accident year loss and loss adjustment expenses before
catastrophes for 2019 was a $29 increase in current accident year Navigators
Group reserves upon acquisition of the business in May 2019, which was driven
primarily by increased loss estimates for general liability, international
professional liability and assumed reinsurance accident and health business.

Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

                                                                ((Image Removed: chart-fe1eddafca105161b36.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Current accident year catastrophe losses for 2019 were primarily from tornado,
wind and hail events in various areas of the Midwest, Mountain West and
Southeast and, to a lesser extent, winter storms in the northern plains, Midwest
and Northeast. Current accident year catastrophe losses in 2018 were primarily
from hurricanes Florence and Michael in the Southeast, wildfires in California,
wind and hail storms in Colorado, and various wind storms and winter storms
across the country. Catastrophe losses in 2018 are net of an estimated
reinsurance recoverable of $28 under the 2018 Property Aggregate reinsurance
treaty that was allocated to Commercial Lines. Due to reductions in 2018
catastrophe loss estimates in 2019, the reinsurance recoverable under the
Property Aggregate treaty allocated to Commercial Lines was reduced to $15 as of
December 31, 2019.
Prior accident year development was less favorable in 2019 than in 2018. Net
reserve decreases for 2019 were primarily related to lower loss reserve
estimates for workers' compensation claims, package business reserves and
catastrophes, partially offset by a $68 before tax increase to Navigators Group
reserves upon acquisition of the business and increases in reserves for auto
liability and general liability. The increase in Navigators Group reserves upon
acquisition of the business principally related to higher reserve estimates for
general liability, professional liability and marine. Net reserve decreases for
2018 were primarily related to decreases for workers' compensation, catastrophes
and unallocated loss adjustment expense reserves, partially offset by an
increase in general liability reserves.

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Part II - Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

PERSONAL LINES


Results of Operations
                              Underwriting Summary
                                            2019      2018      2017
Written premiums                          $ 3,131$ 3,276$ 3,561
Change in unearned premium reserve            (67 )    (123 )    (129 )
Earned premiums                             3,198     3,399     3,690
Fee income                                     37        40        44

Losses and loss adjustment expenses
Current accident year before catastrophes 2,087 2,249 2,584
Current accident year catastrophes (1) 140 546 453
Prior accident year development (1)

                                            (42 )     (32 )     (37 )

Total losses and loss adjustment expenses 2,185 2,763 3,000
Amortization of DAC

                                                                                                            259       275       309
Underwriting expenses                         625       611       577

Amortization of other intangible assets 6 4 4
Underwriting gain (loss)

                                                                                        160      (214 )    (156 )
Net servicing income (2)                       13        16        16
Net investment income (3)                     179       155       141

Net realized capital gains (losses) (3) 43 (7 ) 15
Other income (expenses)

                                                                                                (1 )      (1 )       1
Income (loss) before income taxes             394       (51 )      17
Income tax expense (benefit) (4)               76       (19 )      26
Net income (loss)                         $   318$   (32 )$    (9 )

(1) For discussion of current accident year catastrophes and prior accident year

development, see MD&A – Critical Accounting Estimates, Property and Casualty

Insurance Product Reserves, Net of Reinsurance.

(2) Includes servicing revenues of $83, $84et $85 for 2019, 2018, and 2017,

respectively and includes servicing expenses of $70, $68et $69 for 2019,

2018, and 2017, respectively.

(3) For discussion of consolidated investment results, see MD&A – Investment

Results.

(4) For discussion of income taxes, see Note 16 – Income Taxes of Notes to

Consolidated Financial Statements.


                          

                          

                          

                          Written and Earned Premiums
Written Premiums   2019     2018     2017
Product Line
Automobile       $ 2,176$ 2,273$ 2,497
Homeowners           955    1,003    1,064
Total            $ 3,131$ 3,276$ 3,561
Earned Premiums
Product Line
Automobile       $ 2,221$ 2,369$ 2,584
Homeowners           977    1,030    1,106
Total            $ 3,198$ 3,399$ 3,690



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Part II - Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

                                Premium Measures
                                                 2019     2018     2017
Policies in-force end of period (in thousands)
Automobile                                      1,422    1,510    1,702
Homeowners                                        877      927    1,038
New business written premium
Automobile                                     $  220$  169$  152
Homeowners                                     $   73$   46$   44
Policy count retention
Automobile                                         85 %     82 %     81 %
Homeowners                                         85 %     83 %     83 %
Renewal written price increase
Automobile                                        4.6 %    7.2 %   10.9 %
Homeowners                                        6.5 %    9.7 %    8.9 %
Renewal earned price increase
Automobile                                        5.5 %    9.6 %    9.6 %
Homeowners                                        8.4 %    9.3 %    8.5 %
Premium retention
Automobile                                         87 %     85 %     88 %
Homeowners                                         89 %     90 %     89 %


                              Underwriting Ratios
                                                               2019   2018    2017
Loss and loss adjustment expense ratio
Current accident year before catastrophes                     65.3    66.2  

70.0




Current accident year catastrophes                             4.4    16.1  

12.3




Prior accident year development                               (1.3 )  (0.9 )  (1.0 )
Total loss and loss adjustment expense ratio                  68.3    81.3    81.3
Expense ratio                                                 26.7    25.0    22.9
Combined ratio                                                95.0   106.3   104.2

Current accident year catastrophes and prior year development 3.1 15.2

            11.3
Underlying combined ratio                                     91.9    91.2    93.0


                            Product Combined Ratios
                          2019   2018   2017
Automobile
Combined ratio            96.6   98.6  101.6
Underlying combined ratio 97.9   98.2   99.7
Homeowners
Combined ratio            91.7  124.3  110.4

Underlying combined ratio 78.3 75.1 77.1












2020 Outlook
Written premium is expected to decline in 2020 as non-renewal of premium more
than offsets new business growth, with a larger percentage decrease expected in
the agency channel. The Company expects to increase new business in 2020, with
most of the growth in the direct channel, driven by investments in product
enhancements and targeted marketing initiatives. In 2020, the Company expects
written pricing increases in 2020 to be in the

low to mid-single digits for automobile and mid-single digits for homeowners.
The Company expects the combined ratio for Personal Lines will be between
approximately 98.5 and 100.5 for 2020 compared to 95.0 in 2019, primarily due to
higher current accident year catastrophes, less favorable prior year
development, and a higher expense ratio, partially offset by a modestly lower
current accident year loss and loss adjustment expense ratio before

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








catastrophes. The expected increase in the expense ratio is driven by lower
earned premium and investments to support growth and strategic initiatives. The
underlying combined ratio for Personal Lines is expected to be slightly higher,
largely due to a higher expense ratio, partially offset by an improved current
accident year loss and loss adjustment expense ratio in automobile. Current
accident year catastrophes are assumed to be 7.1 points of the combined ratio in
2020 compared with 4.4 points in 2019. For automobile, we expect the underlying
combined ratio to improve slightly as further improvement in the loss ratio
before catastrophes, driven by earned pricing increases in excess of modestly
higher loss costs, will be partially offset by a higher expense ratio. The
underlying combined ratio for homeowners is expected to increase in 2020,
primarily driven by a return to a higher, more normal, level of non-catastrophe
weather and non-weather loss experience and a higher expense ratio, partially
offset by the effect of earned pricing increases.
                               Net Income (Loss)
                ((Image Removed: chart-9f3ede3ef1bb5baebf2.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Net income in 2019 improved from a net loss in 2018, primarily due to lower
current accident year catastrophe losses. A change from net realized capital
losses in 2018 to net realized capital gains in 2019 and higher net investment
income were largely offset by a decrease in underlying underwriting results.
                            Underwriting Gain (Loss)
                ((Image Removed: chart-1a7a8e7d70c3562abc8.jpg))

Year ended December 31, 2019 compared to the year ended December 31, 2018
Underwriting gain in 2019 improved from an underwriting loss in 2018, primarily
due to lower current accident year catastrophes and, to a lesser extent, a lower
current accident year loss ratio before catastrophes in auto partially offset by
the effect of lower earned premium and an increase in underwriting expenses. The
increase in underwriting expenses was largely driven by investments in
information technology, and an increase in direct marketing spending, selling
expenses, and operational costs to generate new business, partially offset by a
reduction in state taxes and assessments. The decrease in amortization of DAC
was commensurate with the reduction in earned premium.
                                Earned Premiums
                ((Image Removed: chart-224445e32b4d50e283c.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Earned premiums decreased in 2019, reflecting a decline in written premium over
the prior six to twelve months in both Agency channels and in AARP Direct.
Written premiums decreased in 2019 in AARP Direct and both Agency channels.
Despite an increase in new business and higher policy count retention in both
auto and homeowners, written premium declined, primarily due to not generating
enough new business to offset the loss of non-renewed premium.
Renewal written pricing increases in 2019 were lower in both auto and homeowners
in response to moderating loss cost trends.
Policy count retention increased in both automobile and homeowners, in part
driven by moderating renewal written price increases.
Policies in-force decreased in 2019 in both automobile and homeowners, driven by
not generating enough new business to offset the loss of non-renewed policies.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Current Accident Year Loss and Loss Adjustment Expense Ratio before Catastrophes

                                                                ((Image Removed: chart-92a490c5ddff5948bdc.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Current accident year loss and LAE ratio before catastrophes decreased in 2019.
For auto, a decrease in the loss and loss adjustment expense ratio was due to
the effect of earned pricing increases and a slight decrease in average claim
frequency, partially offset by a modest increase in average claim severity. Pour
home, the increase in the current accident year loss and loss adjustment expense
ratio before catastrophes was driven by an increase in the loss adjustment
expense and moderately higher severity partially offset by earned pricing
increases and a decrease in frequency.

Current Accident Year Catastrophes and Unfavorable (Favorable) Prior Accident

                                Year Development
                ((Image Removed: chart-ec170b0ff70e5dab9fe.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Current accident year catastrophe losses for 2019 primarily included winter
storms across the country and tornado, wind and hail events in the South,
Midwest, and Mountain West. Catastrophe losses for 2018 were primarily from
wildfires in California, wind and hail storms in Colorado, hurricanes Florence
and Michael in the Southeast and various wind storms and winter storms across
the country. Catastrophe losses in 2018 were net of an estimated reinsurance
recoverable of $54 under the 2018 Property Aggregate reinsurance treaty that was
allocated to Personal Lines. Due to reductions in 2018 catastrophe loss
estimates in 2019, the reinsurance recoverable under the Property Aggregate
treaty allocated to Personal Lines was reduced to $30 as of December 31 2019.
Prior accident year development was favorable in 2019 primarily due to a
decrease in auto liability reserves for the 2017 accident year. Favorable
development in 2018 was primarily in automobile liability and homeowners,
partially offset by an increase in net catastrophe loss reserves.


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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

PROPERTY & CASUALTY OTHER OPERATIONS








Results of Operations
                              Underwriting Summary
                                           2019   2018   2017
Written Premiums                          $  -   $ (4 ) $  -

Change in unearned premium reserve (2 ) (4 ) –

      
      
      
      Earned premiums                        2      -      -

Losses and loss adjustment expenses
Prior accident year development (1) 21 65 18
Total losses and loss adjustment expenses 21 65 18
Underwriting expenses

                                                                                            12     12     14
Underwriting loss                          (31 )  (77 )  (32 )
Net investment income (2)                   84     90    106

Net realized capital gains (losses) (2) 20 (4 ) 14
Other income (expenses)

                                                                                        -     (1 )    5
 Income before income taxes                 73      8     93
Income tax expense (benefit) (3)            12     (7 )   24
Net income                                $ 61$ 15$ 69

(1) For discussion of prior accident year development, see MD&A – Critical

Accounting Estimates, Property and Casualty Insurance Product Reserves, Net

of Reinsurance.

(2) For discussion of consolidated investment results, see MD&A – Investment

Results.

(3) For discussion of income taxes, see Note 16 – Income Taxes of Notes to

                Consolidated Financial Statements.


                                   Net Income
                ((Image Removed: chart-145484549c4853388a7.jpg))

Year ended December 31, 2019 compared to the year ended December 31, 2018
Net Income increased primarily due to a decrease in net unfavorable prior
accident year development and an increase in








net realized capital gains. The decrease in prior accident year development was
principally due to a change from reserve increases for uncollectible reinsurance
in 2018 to reserve decreases for uncollectible reinsurance in 2019.
Asbestos Reserves reflected no net incurred losses and allocated loss adjustment
expenses in 2019 as a $76 increase in estimated reserves before NICO reinsurance
was offset by $76 of losses recoverable under the NICO treaty. The increase
before NICO reinsurance was primarily due to an increase in average mesothelioma
settlement values driven by elevated plaintiff demands and defendant
bankruptcies and, to a lesser extent, unfavorable developments in the
application of coverage that resulted in increased liability shares on certain
insureds. An increase in reserves from umbrella and excess policies in the 1981
- 1985 policy years contributed to the adverse development. Partially offsetting
the unfavorable development was the effect of a decrease in the number of
mesothelioma claim filings and a projection that trend will continue.
Environmental Reserves reflected no net incurred losses and allocated loss
adjustment expenses in 2019 as a $56 increase in estimated reserves before NICO
reinsurance was offset by $56 of loss recoverable under the NICO treaty. The
increase in reserves before NICO reinsurance was primarily due to an increase in
the estimated costs to remediate sites polluted by coal ash and polyfluoroalkyl
chemicals and due to increased defense and clean-up costs associated with
Superfund sites and intensifying regulatory scrutiny by state agencies for more
extensive remediation.

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Part II - Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

GROUP BENEFITS


Results of Operations
                               Operating Summary
                                                2019     2018      2017
Premiums and other considerations             $ 5,603$ 5,598$ 3,677
Net investment income (1)                         486      474       381
Net realized capital gains (losses) (1)            34      (47 )      34
Total revenues                                  6,123    6,025     4,092

Benefits, losses and loss adjustment expenses 4,055 4,214 2,803
Amortization of DAC

                                                                                                                                54       45        33

Insurance operating costs and other expenses 1,311 1,282 915
Amortization of other intangible assets

                                                41       60         9
Total benefits, losses and expenses             5,461    5,601     3,760
Income before income taxes                        662      424       332
 Income tax expense (2)                           126       84        38
Net income                                    $   536$   340$   294

(1) For discussion of consolidated investment results, see MD&A – Investment

Results.

(2) For discussion of income taxes, see Note 16 – Income Taxes of Notes to the

                Consolidated Financial Statements.


                       Premiums and Other Considerations
                                                 2019     2018     2017
Fully insured - ongoing premiums               $ 5,416$ 5,418$ 3,571
Buyout premiums                                      7        5       15
Fee income                                         180      175       91

Total premiums and other considerations $ 5,603$ 5,598$ 3,677
Fully insured ongoing sales, excluding buyouts $ 647$ 704$ 449

                                                                                                            Ratios, Excluding Buyouts
                             2019   2018   2017
Group disability loss ratio 67.3 % 73.1 % 76.5 %
Group life loss ratio       79.5 % 78.4 % 76.7 %
Total loss ratio            72.3 % 75.3 % 76.1 %
Expense ratio (1)           24.5 % 24.0 % 25.7 %

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

                                                                                                                                                    Margin
                                                       2019        2018        2017
Net income margin                                        8.8 %       5.6 %       7.2 %
Adjustments to reconcile net income margin to core
earnings margin:
Net realized capital losses (gains) excluded from
core earnings, before tax                               (0.5 )%      0.9  %     (0.7 )%
Integration and transaction costs associated with
acquired business, before tax                            0.6  %      0.8  %      0.4  %
Income tax benefit                                         -  %     (0.3 )%     (1.1 )%
Core earnings margin                                     8.9 %       7.0 %       5.8 %


2020 Outlook
The Company expects Group Benefits fully insured ongoing premiums to increase
modestly in 2020, with increases in both sales and renewal premium. In 2020, the
segment's net income

margin is expected to be between 6.25% and 7.25%, compared to a net income
margin of 8.8% in 2019. The expected decrease largely reflects the expectation
of less favorable claim incidence and recoveries on long-term disability claims,
lower expected investment yield driven, in part, by strong investment returns

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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from limited partnerships in 2019 that are not assumed to repeat in 2020, and a
level of net realized capital gains in 2019 not expected to recur in 2020.
Management expects that the 2020 core earnings margin, which does not include
the effect of net realized capital gains (losses) or integration costs
associated with the acquired business, will be in the range of 6.5% to 7.5%,
down from a 2019 core earnings margin of 8.9%, primarily due to the expectation
of less favorable claim incidence and recoveries on long-term disability claims
and lower expected investment income.
                                   Net Income
                ((Image Removed: chart-fea1ac62f0225d699d4.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Net income increased in 2019 compared to 2018, primarily due to a lower group
disability loss ratio and a change from net realized capital losses in 2018 to
net realized capital gains in 2019. Lower amortization of other intangibles,
higher net investment income and lower integration costs were largely offset by
higher insurance operating costs and other expenses.
Insurance operating costs and other expenses increased in 2019 compared to 2018
due to higher commissions on our voluntary product offerings and investments in
technology and claims operations, partially offset by achievements of expense
synergies and lower state taxes and assessments.

                         Fully Insured Ongoing Premiums
                ((Image Removed: chart-ad810767ba62536aa74.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Fully insured ongoing premiums were relatively flat in 2019 compared to 2018 as
a decrease in group life was offset by an increase in group disability and
higher premiums from voluntary products.
Fully insured ongoing sales, excluding buyouts decreased in 2019 compared to
2018 with decreases in group disability and group life, partially offset by an
increase in sales of voluntary products. Part of the decrease in fully insured
ongoing sales was due to first year sales of the New York Paid Family Leave
product in 2018.
                                     Ratios
                ((Image Removed: chart-f85361c06fa252709ae.jpg))

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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Year ended December 31, 2019 compared to the year ended December 31, 2018
Total loss ratio decreased 3.0 points from 2018 to 2019 as a decrease in the
group disability loss ratio was partially offset by an increase in the group
life loss ratio. The group disability loss ratio decreased 5.8 points driven by
continued favorable incidence trends and strong claim recoveries on prior
incurral year reserves, including the impact of updating our claim recovery
probabilities to more recent experience and an experience refund related to the
New York Paid Family Leave product.

The group life loss ratio increased 1.1 points, largely due to higher severity.
Expense ratio increased 0.5 points from 2018 to 2019, due to higher commissions
on our voluntary product offerings, investments in technology and claims, and
higher amortization of DAC, partially offset by achievements of expense
synergies and lower state taxes and assessments.

HARTFORD FUNDS


Results of Operations
                               Operating Summary
                                                         2019        2018        2017
Fee income and other revenue                          $     999$   1,032$     992
Net investment income                                         7           5           3
Net realized capital gains (losses)                           5          (4 )         -
Total revenues                                            1,011       1,033         995
Amortization of DAC                                          12          16          21
Operating costs and other expenses                          813         831 

805




Total benefits, losses and expenses                         825         847         826
Income before income taxes                                  186         186         169
 Income tax expense (1)                                      37          38          63
Net income                                            $     149$     148$     106
Daily average total Hartford Funds segment AUM        $ 117,914$ 116,876$ 107,593
Return on Assets ("ROA") (2)                               12.5        12.6 

9.9

Adjustments to reconcile ROA to ROA, core earnings:
Effect of net realized capital (gains) losses,
excluded from core earnings, before tax

                                                                                (0.3 )       0.4 




Effect of income tax benefit (expense)                        -        (0.1 )       0.3
Return on Assets ("ROA"), core earnings (2)                12.2        12.9 

10.2

(1) For discussion of income taxes, see Note 16 – Income Taxes of Notes to

Consolidated Financial Statements.

(2) Represents annualized earnings divided by a daily average of assets under

                management, as measured in basis points.


                           Hartford Funds Segment AUM
2019       

2018 2017

 
 
 
 Mutual Fund and ETP AUM - beginning of period               $  91,557$  99,090$  81,507
Sales - mutual fund                                             22,479      22,198      23,654
Redemptions - mutual fund                                      (23,624 )   (23,888 )   (20,409 )
Net flows - ETP                                                  1,332       1,404         157
Net Flows - mutual fund and ETP                                    187        (286 )     3,402
Change in market value and other                                20,789      

(7,247 ) 14,181

 
 
 
 Mutual Fund and ETP AUM - end of period                       112,533      91,557      99,090
Talcott Resolution life and annuity separate account AUM (1)    14,425      13,283      16,260
Hartford Funds AUM - end of period                           $ 126,958   Dollars 

104,840 $ 115,350

(1) Represents AUM of the life and annuity business sold in May 2018 that is

                still managed by the Company's Hartford Funds segment.



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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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                                                                                                    Mutual Fund AUM by Asset Class
                                  2019      2018      2017
Equity                         $  71,629$ 56,986$ 63,740
Fixed Income                      16,130    14,467    14,401

Multi-Strategy Investments (1) 21,332 18,233 20,469
Exchange-traded products

                                            3,442     1,871       480

Mutual Fund and ETP AUM $ 112,533$ 91,557$ 99,090

(1) Includes balanced, allocation, and alternative investment products.












2020 Outlook
Assuming continued growth in equity markets in 2020 and an expectation of
positive net flows, the Company expects net income for Hartford Funds to
increase from 2019 to 2020. The Company expects to increase net sales in 2020
from a diversified lineup of mutual funds and ETPs, though net flows are more
uncertain given the increased volatility in the markets. Assuming the Company
can generate positive net flows and fund performance is strong, assets under
management are expected to increase modestly despite the expected continued
decline of the Talcott Resolution AUM.
                                   Net Income
                ((Image Removed: chart-e8077234e8625d6d857.jpg))
Year ended December 31, 2019 compared to the year ended December 31, 2018
Net income increased slightly in 2019 as a change from net realized capital
losses in 2018 to net realized capital gains in 2019 was largely offset by the
effect of lower investment management fee revenues, an increase in contingent
consideration payable associated with the acquisition of Lattice Strategies LLC

("Lattice") and lower state income tax expense in 2018. The decrease in
investment management fees was driven by fee reductions and a shift to lower fee
funds, partially offset by the effect of slightly higher average daily AUM. See
Note 5 - Fair Value Measurements of Notes to Consolidated Financial Statements
for additional information on the Lattice consideration.
                               Hartford Funds AUM
                ((Image Removed: chart-b1b29ea0323959e19a8.jpg))
December 31, 2019 compared to December 31, 2018
Hartford Funds AUM increased from December 31, 2018 į December 31, 2019 due to
market appreciation in 2019 across equity, fixed income and multi-strategy funds
and exchange traded products. Net flows were slightly positive in 2019 compared
to slightly negative net flows in 2018 with net inflows in exchange traded
products and fixed income funds offset by net outflows in equity and
multi-strategy funds.


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Part II - Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

CORPORATE


Results of Operations
                               Operating Summary
                                                        2019    2018      2017
Fee income                                            $   50$  32$      4
Other revenue                                             96      21          -
Net investment income                                     66      59         23
Net realized capital gains (losses)                       22      (7 )       (1 )
Total revenues                                           234     105        

26e

Benefits, losses and loss adjustment expenses (1) 19 11

31




Insurance operating costs and other expenses              83      83        

59




Pension settlement                                         -       -        

750




Loss on extinguishment of debt (2)                        90       6        




Interest expense (2)                                     259     298        

316




Total benefits, losses and expenses                      451     398      

1,156




Loss before income taxes                                (217 )  (293 )   (1,130 )
Income tax expense (benefit) (3)                         (46 )   (95 )      

457




Loss from continuing operations, net of tax             (171 )  (198 )   (1,587 )
Income (loss) from discontinued operations,net of tax      -     322     (2,869 )
Net income (loss)                                     $ (171 )$ 124$ (4,456 )
Preferred stock dividends                                 21       6          -

Net income (loss) available to common stockholders $ (192 )$ 118$ (4,456 )

(1) Represents benefits expense on life and annuity business previously

underwritten by the Company.

(2) For discussion of debt, see Note 13 – Debt of Notes to Consolidated Financial

Statements.

(3) For discussion of income taxes, see Note 16 – Income Taxes of Notes to

                Consolidated Financial Statements.


                               Net Income (Loss)
                ((Image Removed: chart-e6c5dc03672d509e804.jpg))

Year ended December 31, 2019 compared to the year ended December 31, 2018
Net loss compared to net income in 2018 as 2018 included income from
discontinued operations related to the life and annuity business sold in May
L'année 2018
. The loss from continuing operations, net of tax, improved due to an
increase in other revenues due to higher earnings on the Company's retained








equity interest in the legal entity that acquired the life and annuity business
sold in 2018, lower interest expense, a change to net realized capital gains in
2019 from net realized capital losses in 2018, and greater fee revenue from
managing the invested assets of Talcott Resolution post-sale, partially offset
by an increase in loss on extinguishment of debt and transaction costs incurred
in 2019 related to the Navigators Group acquisition.
                                Interest Expense
                ((Image Removed: chart-8c8d0540cd8a5e788bc.jpg))

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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Year ended December 31, 2019 compared to the year ended December 31, 2018
Interest expense decreased primarily due to the maturity of senior notes payable
in January 2019 and the redemption of junior subordinated debentures in June
L'année 2018, partially offset by the issuance of senior notes in August 2019 in excess
of the amount of proceeds used to redeem other outstanding senior notes. Sur June
15, 2018, The Hartford redeemed $500 aggregate principal amount of its 8.125%
Fixed-to-Floating Rate Junior Subordinated Debentures due 2068. On January 15,
2019,

the Company repaid at maturity the $413 principal amount of its 6.0% senior
notes. In third quarter 2019, after receiving net proceeds of $1.38 billion from
the issuance of the 2.8% senior notes due August 19, 2029 and 3.6% senior notes
due August 19, 2049, The Hartford repaid $265 of 5.75% senior notes due 2023
that had been assumed in the Navigators Group acquisition and $800 of 5.125%
senior notes due 2022 of The Hartford Financial Services Group, Inc.et
recognized a loss on extinguishment of debt of $90. For additional information,
see Note 13 - Debt of Notes to the Consolidated Financial Statements.




ENTERPRISE RISK MANAGEMENT
The Company's Board of Directors has ultimate responsibility for risk oversight,
as described more fully in our Proxy Statement, while management is tasked with
the day-to-day management of the Company's risks.
The Company manages and monitors risk through risk policies, controls and
limits. At the senior management level, an Enterprise Risk and Capital Committee
("ERCC") oversees the risk profile and risk management practices of the Company.
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.


                  ERCC Members
                   CEO (Chair)
                    President
             Chief Financial Officer
            Chief Investment Officer
               Chief Risk Officer
                 General Counsel

Others as deemed necessary by the Committee Chair



                                             


                                             


                                             


                                             ERCC


    Asset       Underwriting    Emerging Risk      Operational     Economic        Model
  Liability         Risk          Steering            Risk          Capital      Oversight
        Committee       Committee       Committee         Committee      Executive     Committee
                                                                   Committee

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

• the development of risk appetites, tolerances, and limits;

• risk monitoring; et

• internal and external risk reporting.












The Company categorizes its main risks as insurance risk, operational risk and
financial risk, each of which is described in more detail below.
Insurance Risk
Insurance risk is the risk of losses of both a catastrophic and non-catastrophic
nature on the P&C and Group Benefits products the Company has sold. Catastrophe
insurance risk is the exposure arising from both natural (e.g., weather,
earthquakes, wildfires, pandemics) and man-made catastrophes (e.g., terrorism,
cyber-

attacks) that create a concentration or aggregation of loss across the Company's
insurance or asset portfolios.
Sources of Insurance Risk Non-catastrophe insurance risks exist within each of
the Company's segments except Hartford Funds and include:
•   Property- Risk of loss to personal or commercial property from automobile

related accidents, weather, explosions, smoke, shaking, fire, theft,

vandalism, inadequate installation, faulty equipment, collisions and falling

objects, and/or machinery mechanical breakdown resulting in physical damage

and other covered perils.

• Liability- Risk of loss from automobile related accidents, uninsured and

underinsured drivers, lawsuits from accidents, defective products, breach of

warranty, negligent acts by professional practitioners, environmental claims,

latent exposures, fraud, coercion, forgery, failure to fulfill obligations

                per contract surety, liability from errors and omissions, losses from
    political and credit coverages, losses



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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

from derivative lawsuits, and other securities actions and covered perils.
• Mortality- Risk of loss from unexpected trends in insured deaths impacting

timing of payouts from group life insurance, personal or commercial

automobile related accidents, and death of employees or executives during the

course of employment, while on disability, or while collecting workers

compensation benefits.

• Morbidity- Risk of loss to an insured from illness incurred during the course

of employment or illness from other covered perils.

• Disability- Risk of loss incurred from personal or commercial automobile

related losses, accidents arising outside of the workplace, injuries or

accidents incurred during the course of employment, or from equipment, with

each loss resulting in short term or long-term disability payments.

• Longevity- Risk of loss from increased life expectancy trends among

policyholders receiving long-term benefit payments.

Cyber Insurance– Risk of loss to property, breach of data and business

interruption from various types of cyber-attacks.

Catastrophe risk primarily arises in the property, automobile, workers'
compensation, casualty, group life, and group disability lines of business.
Impact Non-catastrophe insurance risk can arise from unexpected loss experience,
underpriced business and/or underestimation of loss reserves and can have
significant effects








on the Company's earnings. Catastrophe insurance risk can arise from various
unpredictable events and can have significant effects on the Company's earnings
and may result in losses that could constrain its liquidity.
Management Les entreprises policies and procedures for managing these risks
include disciplined underwriting protocols, exposure controls, sophisticated
risk-based pricing, risk modeling, risk transfer, and capital management
strategies. The Company has established underwriting guidelines for both
individual risks, including individual policy limits, and risks in the
aggregate, including aggregate exposure limits by geographic zone and peril. The
Company uses both internal and third-party models to estimate the potential loss
resulting from various catastrophe events and the potential financial impact
those events would have on the Company's financial position and results of
operations across its businesses.
In addition, certain insurance products offered by The Hartford provide coverage
for losses incurred due to cyber events and the Company has assessed and modeled
how those products would respond to different events in order to manage its
aggregate exposure to losses incurred under the insurance policies we sell. 

The




Company models numerous deterministic scenarios including losses caused by
malware, data breach, distributed denial of service attacks, intrusions of cloud
environments and attacks of power grids.
Among specific risk tolerances set by the Company, risk limits are set for
natural catastrophes, terrorism risk and pandemic risk.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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   Risk            Definition                     Details and Company 

Limits

Natural Exposure arising from The Company generally limits its estimated pre-tax
catastrophe natural phenomena (e.g., loss as a result of natural catastrophes for

            
            
            
            earthquakes, wildfires,   property & casualty exposures from a 

single

            
            
            
            etc.) that create a       250-year event to less than 30% of 

the projected

            
            
            
            concentration or          total available capital at year end 

de

                                                aggregation of loss       property and casualty insurance

subsidiaries prior

            
            
            
            across the Company's      to reinsurance and to less than 15% 

de

            
            
            
            insurance or asset        projected total available capital at 

year end of

            
            
            
            portfolios and the        the property and casualty insurance 

subsidiaries

            
            
            
            inherent volatility of    after reinsurance. From time to time 

the estimated

            
            
            
            weather or climate        loss to natural catastrophes from a single
            pattern changes.          250-year event prior to reinsurance may fluctuate
                                      above or below these limits due to changes in
                                      modeled loss estimates, exposures or statutory
surplus. (2)
                                            - The estimated 250 year pre-tax probable
                                            maximum loss from earthquake events is
                                            estimated to be $1.1 billion prieš tai
                                            reinsurance and $408 million net of
reinsurance. (1)
                                            - The estimated 250 year pre-tax probable
                                            maximum losses from hurricane events are
                                            estimated to be $1.8 billion prieš tai
                                            reinsurance and $906 net of

reinsurance. (1)
Terrorism The risk of losses from Enterprise limits for terrorism apply to

            
            
            
            terrorist attacks,        aggregations of risk across 

property-casualty,

            
            
            
            including losses caused   group benefits and specific asset 

portfolios and

            
            
            
            by single-site and        are defined based on a deterministic, 

single-site

                                                multi-site conventional   conventional terrorism attack

scenario. The

                                                attacks, as well as the   Company manages its potential

estimated loss from

                                                potential for attacks     a conventional terrorism loss

scenario, up to $2.0

            
            
            
            using nuclear,            billion net of reinsurance and $2.5

billion gross

            
            
            
            biological, chemical or   of reinsurance, before coverage under 

the

            
            
            
            radiological weapons      Terrorism Risk Insurance Program established under
            ("NBCR").                 "TRIPRA". In addition, the Company monitors
                                      exposures monthly and employs both internally
                                      developed and vendor-licensed loss modeling tools
                                      as part of its risk management discipline. Our
                                      modeled exposures to conventional terrorist
                                      attacks around landmark locations may fluctuate
                                      above and below our stated limits.

Pandemic The exposure to loss The Company generally limits its estimated pre-tax

            
            
            
            arising from widespread   loss from a single 250 year pandemic 

event to less

            
            
            
            influenza or other        than 18% of the aggregate projected 

total

            
            
            
            pathogens or bacterial    available capital at year end of the 

property and

            
            
            
            infections that create an casualty and group benefits insurance
            aggregation of loss       subsidiaries. In evaluating these 

scenarios, the

            
            
            
            across the Company's      Company assesses the impact on group 

life,

            
            
            
            insurance or asset        short-term disability, long-term disability and
            portfolios.               property & casualty claims.  While ERM has a
                                      process to track and manage these limits, from
                                      time to time, the estimated loss for pandemics may
                                      fluctuate above or below these limits due to
                                      changes in modeled loss estimates, exposures, or
                                      statutory surplus. In addition, the Company
                                      assesses losses in the investment portfolio
                                      associated with market declines in the event of a
widespread pandemic. (2)

(1) The loss estimates represent total property losses for hurricane events and

property and workers compensation losses for earthquake events resulting from

a single event. The estimates provided are based on 250-year return period

loss estimates that have a 0.4% likelihood of being exceeded in any single

year. The net loss estimates provided assume that the Company is able to

recover all losses ceded to reinsurers under its reinsurance programs. The

Company also manages natural catastrophe risk for group life and group

disability, which in combination with property and workers compensation loss

estimates are subject to separate enterprise risk management net aggregate

loss limits as a percent of enterprise surplus.

(2) For U.S. insurance subsidiaries other than Navigators Insurers, total

available capital is equal to actual statutory capital and surplus. Pour

Navigators Insurers, including in U.S. and non-U.S. jurisdictions, total

available capital is equal to U.S. GAAP equity of those subsidiaries less

certain assets such as goodwill, intangible assets, deferred taxes and other

adjustments, including discounting.












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

Insurance Program ("TRIPRA") and other reinsurance programs relating to
particular risks or specific lines of business.
Reinsurance for Catastrophes- The Company utilizes various reinsurance programs
to mitigate catastrophe losses including excess of loss occurrence-based
treaties covering property and workers' compensation, and an aggregate property
catastrophe treaty as well as individual risk agreements (including facultative
reinsurance) that reinsure losses from specific classes or lines of business.
The aggregate property catastrophe treaty covers the aggregate of catastrophe
events designated by the Property Claim Services office of Verisk and, for
international business, net losses arising from two or more risks involved in
the same loss occurrence totaling at least $500 thousand.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Primary Catastrophe Treaty Reinsurance Coverages as of January 1, 2020

                                                                                                                                                                                                            Portion of       Portion of
                                                     losses      losses retained
                                                    reinsured    by The Hartford
Per Occurrence Property Catastrophe Treaty from
1/1/2020 to 12/31/2020 (1) (2)
Losses of $0 į $150                                  None        100% 

retained




Losses of $150 į $350 for named storms and
earthquakes                                           None        100% 

retained

Losses of $150 į $350 from one event other than 70% of $200 in 30%
named storms and earthquakes

                                                                                    excess of $150

co-participation

Losses of $350 į $500 from one event (all 75% of $150 in 25%
perils)

                                                                                                                                                                        excess of $350

co-participation

Losses of $500 į $1.1 billion from one event 90% of $600 in 10%
(3) (all perils)

                                                                                                                                            excess $500

co-participation




Aggregate Property Catastrophe Treaty for
1/1/2020 to 12/31/2020 (4)
$0 į $700 of aggregate losses                        None        100% 

retained

$700 į $900 of aggregate losses                      100%             None
Workers' Compensation Catastrophe Treaty for
1/1/2020 to 12/31/2020
Losses of $0 į $100 from one event                   None        100% 

retained

                                                 
                                                 
                                                 
                                                 80% of $350 in        20%

Losses of $100 į $450 from one event (5) excess of $100 co-participation

(1) As of January 1, 2020Navigators Group (Global Specialty) is included in the

Corporate Property Catastrophe treaties. These treaties do not cover the

assumed reinsurance business which purchases its own retrocessional coverage.

(2) In addition to the Property Occurrence Treaty, for Florida events, The

Hartford has purchased the mandatory FHCF reinsurance for the period from

6/1/2019 to 5/30/2020. Retention and coverage varies by writing company. The

writing company with the largest coverage under FHCF is Hartford Insurance

Company of the Midwest, with coverage for approximately $67 of per event

losses in excess of a $27 retention.

(3) Portions of this layer of coverage extend beyond a traditional one year term.

(4) The aggregate treaty is not limited to a single event; rather, it is designed

to provide reinsurance protection for the aggregate of all catastrophe events

(up to $350 per event), either designated by the Property Claim Services

office of Verisk or, for international business, net losses arising from two

or more risks involved in the same loss occurrence totaling at least $500

thousand. All catastrophe losses apply toward satisfying the $700 attachment

point under the aggregate treaty.

(5) In addition to the limits shown, the workers' compensation reinsurance

includes a non-catastrophe, industrial accident layer, providing coverage for

80% of $30 in per event losses in excess of a $20 retention.












In addition to the property catastrophe reinsurance coverage described in the
above table, the Company has other reinsurance agreements that cover property
catastrophe losses. The Per Occurrence Property Catastrophe Treaty, and Workers'
Compensation Catastrophe Treaty include a provision to reinstate one limit in
the event that a catastrophe loss exhausts limits on one or more layers under
the treaties.
Reinsurance for Terrorism- For the risk of terrorism, private sector catastrophe
reinsurance capacity is generally limited and largely unavailable for terrorism
losses caused by nuclear, biological, chemical or radiological attacks. As such,
the Company's principal reinsurance protection against large-scale terrorist
attacks is the coverage currently provided through TRIPRA to the end of 2027.
TRIPRA provides a backstop for insurance-related losses resulting from any "act
of terrorism", which is certified by the Secretary of the Treasury, in
consultation with the Secretary of Homeland Security and the Attorney General,
for losses that exceed a threshold of industry losses of $200 billion. Selon
program, in any one calendar year, the federal government will pay a percentage
of losses incurred from a certified act of terrorism after an insurer's losses
exceed 20% of the Company's eligible direct commercial earned premiums of the
prior calendar year up to a combined annual aggregate limit for the federal
government and all insurers of $100 billion. The percentage of losses paid by
the federal government is 80% . The Company's estimated deductible under the
program is $1.5 billion for 2020. If an act of terrorism or acts of terrorism
result in covered losses exceeding the $100 billion annual industry aggregate
limit,

Congress would be responsible for determining how additional losses in excess of
$100 billion will be paid.
Reinsurance for A&E and Navigators Group Reserve Development - The Company has
two adverse development cover ("ADC") reinsurance agreements in place, both of
which are accounted for as retroactive reinsurance. One agreement covers
substantially all A&E reserve development for 2016 and prior accident years (the
"A&E ADC") and the other covers substantially all reserve development of
Navigators Insurance Company and certain of its affiliates for 2018 and prior
accident years ("Navigators ADC"). For more information on the A&E ADC and the
Navigators ADC, see Note 1, Basis of Presentation and Significant Accounting
Policies, and Note 11, Reserve for Unpaid Losses and Loss Adjustment Expenses.
Reinsurance Recoverables
Property and casualty insurance product reinsurance recoverables represent loss
and loss adjustment expense recoverables from a number of entities, including
reinsurers and pools.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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                                                                        Property & Casualty Reinsurance Recoverables
                                           As of December 31,
                                             2019        2018

Paid loss and loss adjustment expenses $ 249 $ 127
Unpaid loss and loss adjustment expenses 4,819 3,773
Gross reinsurance recoverables

                                                                5,068      3,900

Allowance for uncollectible reinsurance (114 ) (126 )
Net reinsurance recoverables

                                                    $    4,954    $ 3,774


As shown in the following table, a portion of the total gross reinsurance
recoverables relates to the Company's mandatory participation in various
involuntary assigned risk pools and the value of annuity contracts held under
structured settlement agreements. Reinsurance recoverables due from mandatory
pools are backed by the financial strength of the property and casualty
insurance industry. Annuities purchased from third-party life insurers under
structured settlements are recognized as reinsurance recoverables in cases where
the Company has not obtained a release from the claimant. Of the remaining gross
reinsurance recoverables, the portion of recoverables due from companies rated
auteur A.M. Le meilleur is as follows:
                 Distribution of Gross Reinsurance Recoverables
                                                    As of December 31,
2019                        

L'année 2018




Gross reinsurance recoverables    $      5,068                $      3,900
Mandatory (assigned risk) pools
and structured settlements              (1,186 )                    (1,220 )
Gross reinsurance recoverables
excluding mandatory pools and
structured settlements            $      3,882                $      2,680
                                                  % of Total                  % of Total
Rated A- (excellent) or better by
A.M. Best (1)                     $      3,261         84.0 % $      2,194         81.8 %
Other rated by A.M. Best                     -                           1          0.1 %
Total rated companies                    3,261         84.0 %        2,195         81.9 %
Voluntary pools                             30          0.8 %           35          1.3 %
Captives                                   325          8.3 %          302         11.3 %
Other not rated companies                  266          6.9 %          148          5.5 %
Total                             $      3,882        100.0 % $      2,680        100.0 %

(1) Based on A.M. Le meilleur ratings as of December 31, 2019 and 2018, respectively.












To manage reinsurer credit risk, a reinsurance security review committee
evaluates the credit standing, financial performance, management and operational
quality of each potential reinsurer. In placing reinsurance, the Company
considers the nature of the risk reinsured, including the expected liability
payout duration, and establishes limits tiered by reinsurer credit rating.

Where its contracts permit, the Company secures future claim obligations with
various forms of collateral, including irrevocable letters of credit, secured
trusts, funds held accounts and group wide offsets. As part of its reinsurance
recoverable review, the Company analyzes recent developments in commutation
activity between reinsurers and cedants, recent trends in arbitration and
litigation outcomes in disputes between cedants and reinsurers and the overall
credit quality of the Company's reinsurers. As indicated in the above table,
excluding mandatory pools and structured settlements, 84.0% of the gross
reinsurance recoverables due from reinsurers rated by A.M. Le meilleur were rated A-
(excellent) or better as of December 31, 2019.
Annually, the Company completes evaluations of the reinsurance recoverable asset
associated with older, long-term casualty liabilities reported in the Property &
Casualty Other Operations reporting segment, and the allowance for uncollectible
reinsurance reported in the Commercial Lines reporting segment. For a discussion
regarding the results of these evaluations, see MD&A - Critical Accounting
Estimates, Property and Casualty Insurance Product Reserves, Net of Reinsurance.
Group Benefits reinsurance recoverables represent reserve for future policy
benefits and unpaid loss and loss adjustment expenses and other policyholder
funds and benefits payable that are recoverable from a number of reinsurers.
                    Group Benefits Reinsurance Recoverables
                                                 As of December 31,
                                                     2019           2018
Paid loss and loss adjustment expenses      $         6            $  12
Unpaid loss and loss adjustment expenses            247              239
Gross reinsurance recoverables                      253              251
Allowance for uncollectible reinsurance (1)           -                -
Net reinsurance recoverables                $       253            $ 251


(1) No allowance for uncollectible reinsurance was required as of December 31,

2019 and 2018.












Guaranty Funds and Other Insurance-related Assessments
As part of its risk management strategy, the Company regularly monitors the
financial strength of other insurers and, in particular, activity by insurance
regulators and various state guaranty associations in the U.S. relating to
troubled insurers. In all states, insurers licensed to transact certain classes
of insurance are required to become members of a guaranty fund.
Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed
internal processes and systems, human error, or from external events.
Sources of Operational Risk Operational risk is inherent in the Company's
business and functional areas. Operational risks include: compliance with laws
and regulation, cybersecurity, business disruption, technology failure,
inadequate execution or process management, reliance on model and data
analytics, internal fraud, external fraud, third party dependency and attraction
and retention of talent.

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Impact Operational risk can result in financial loss, disruption of our
business, regulatory actions or damage to our reputation.
Management Responsibility for day-to-day management of operational risk lies
within each business unit and functional area. ERM provides an enterprise-wide
view of the Company's operational risk on an aggregate basis. ERM is responsible
for establishing, maintaining and communicating the framework, principles and
guidelines of the Company's operational risk management program. Operational
risk mitigation strategies include the following:
• Establishing policies and monitoring risk tolerances and exceptions;


• Conducting business risk assessments and implementing action plans where

necessary;

• Validating existing crisis management protocols;

• Identifying and monitoring emerging risks; et

• Purchasing insurance coverage.












Cybersecurity Risk
The Hartford has implemented an information protection program with established
governance routines that promote an adaptive approach for assessing and managing
risks. The Hartford employs a 'defense-in-depth' strategy that uses multiple
security measures to protect the integrity of the Company's information assets.
This 'defense-in-depth' strategy aligns to the National Institute of Standards
and Technology ("NIST") Cyber Security Framework and provides preventative,
detective and responsive measures that collectively protects the Company.
Various cyber assurance methods, including security metrics, third party
security assessments, external penetration testing, red team exercises, and
cyber war game exercises are used to test the effectiveness of the overall
cybersecurity control environment.
The Hartford, like many other large financial services companies, blocks
attempted cyber intrusions on a daily basis. In the event of a cyber intrusion,
the Company invokes its Cyber Incident Response Program (the "Program")
commensurate with the nature of the intrusion. While the actual methods employed
differ based on the event, our approach uses internal teams and outside advisors
with specialized skills to support the response and recovery efforts and
requires elevation of issues, as necessary, to senior management. In addition,
we have procedures to ensure timely notification of critical cybersecurity
incidents pursuant to the Program to help identify employees who may have
material non-public information and to implement blackout restrictions on
trading the Company's securities during the investigation and assessment of such
cybersecurity incidents.
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, including the Finance,
Investment, and Risk Management Committee (FIRMCo), a committee comprised of all
directors, which has principal responsibility for oversight of cybersecurity
risk, and/or the Audit Committee, which oversees controls for the Company's
major risk exposures. The topics covered by these updates include the Company's
activities, policies and procedures to prevent, detect and respond to
cybersecurity incidents, as well as lessons learned

from cybersecurity incidents and internal and external testing of our cyber
defenses.
Financial Risk
Financial risks include direct and indirect risks to the Company's financial
objectives from events that impact financial market conditions and the value of
financial assets. Some events may cause correlated movement in multiple risk
factors. The primary sources of financial risks are the Company's invested
assets.
Consistent with its risk appetite, the Company establishes financial risk limits
to control potential loss on a U.S. GAAP, statutory, and economic basis.
Exposures are actively monitored and managed, with risks mitigated where
appropriate. The Company uses various risk management strategies, including
limiting aggregation of risk, portfolio re-balancing and hedging with
over-the-counter and exchange-traded derivatives with counterparties meeting the
appropriate regulatory and due diligence requirements. Derivatives are utilized
to achieve one of four Company-approved objectives: hedging risk arising from
interest rate, equity market, commodity market, credit spread and issuer
default, price or currency exchange rate risk or volatility; managing liquidity;
controlling transaction costs; or entering into synthetic replication
transactions. Derivative activities are monitored and evaluated by the Company's
compliance and risk management teams and reviewed by senior management. The
Company identifies different categories of financial risk, including liquidity,
credit, interest rate, equity and foreign currency exchange.
Liquidity Risk
Liquidity risk is the risk to current or prospective earnings or capital arising
from the Company's inability or perceived inability to meet its contractual
funding obligations as they come due.
Sources of Liquidity Risk Sources of liquidity risk include funding risk,
company-specific liquidity risk and market liquidity risk resulting from
differences in the amount and timing of sources and uses of cash as well as
company-specific and general market conditions. Stressed market conditions may
impact the ability to sell assets or otherwise transact business and may result
in a significant loss in value.
Impact Inadequate capital resources and liquidity could negatively affect the
Company's overall financial strength and its ability to generate cash flows from
its businesses, borrow funds at competitive rates, and raise new capital to meet
operating and growth needs.
Management The Company has defined ongoing monitoring and reporting requirements
to assess liquidity across the enterprise under both current and stressed market
conditions. The Company measures and manages liquidity risk exposures and
funding needs within prescribed limits across legal entities, taking into
account legal, regulatory and operational limitations to the transferability
liquidity. The Company also monitors internal and external conditions, and
identifies material risk changes and emerging risks that may impact operating
cash flows or liquid assets. The liquidity requirements of the Holding Company
have been and will continue to be met by the Holding Company's fixed maturities,
short-term investments and cash, and dividends from its subsidiaries,
principally its insurance operations, as well as the issuance of common stock,
debt or

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other capital securities and borrowings from its credit facilities as needed.
The Company maintains multiple sources of contingent liquidity including a
revolving credit facility, a commercial paper program, an intercompany liquidity
agreement that allows for short-term advances of funds among the HFSG Holding
Company and certain affiliates, and access to collateralized advances from the
Federal Home Loan Bank of Boston ("FHLBB") for certain affiliates. Les entreprises
CFO has primary responsibility for liquidity risk.
For further discussion on liquidity see the section on Capital Resources and
Liquidity.
Credit Risk and Counterparty Risk
Credit risk is the risk to earnings or capital due to uncertainty of an
obligor's or counterparty's ability or willingness to meet its obligations in
accordance with contractually agreed upon terms. Credit risk is comprised of
three major factors: the risk of change in credit quality, or credit migration
risk; the risk of default; and the risk of a change in value due to changes in
credit spreads.
Sources of Credit Risk The majority of the Company's credit risk is concentrated
in its investment holdings and use of derivatives, but it is also present in the
Company's ceded reinsurance activities and various insurance products.
Impact A decline in creditworthiness is typically reflected as an increase in an
investment's credit spread and associated decline in value, potentially
resulting in an increase in other-than-temporary impairment, and an increased
probability of a realized loss upon sale. In certain instances, counterparties
may default on their obligations and the Company may realize a loss on default.
Premiums receivable, reinsurance recoverable and deductible losses recoverable
are also subject to credit risk based on the counterparty's unwillingness or
inability to pay.
Management The objective of the Company's enterprise credit risk management
strategy is to identify, quantify, and manage credit risk in aggregate and to
limit potential losses in accordance with the Company's credit risk management
policy. The Company manages its credit risk by managing aggregations of risk,
holding a diversified mix of issuers and counterparties across its investment,
reinsurance, and insurance portfolios and limiting exposure to any specific
reinsurer or counterparty. Potential credit losses can be mitigated through
diversification (e.g., geographic regions, asset types, industry sectors),
hedging and the use of collateral to reduce net credit exposure.
The Company manages credit risk through the use of various analyses and
governance processes. The investment, derivatives and reinsurance areas have
formal policies and procedures for counterparty approvals and authorizations,
which establish criteria defining minimum levels of creditworthiness and
financial stability for eligible counterparties. Credits considered for
investment are subject to underwriting reviews and private securities are
subject to management approval. Mitigation strategies vary across the three
sources of credit risk, but may include:
• Investing in a portfolio of high-quality and diverse securities;


• Selling investments subject to credit risk;

• Hedging through use of credit default swaps;

• Clearing transactions through central clearing houses that require daily

variation margin;

• Entering into contracts only with strong creditworthy institutions

• Requiring collateral; et

• Non-renewing policies/contracts or reinsurance treaties.












The Company has developed credit exposure thresholds which are based upon
counterparty ratings. Aggregate counterparty credit quality and exposure are
monitored on a daily basis utilizing an enterprise-wide credit exposure
information system that contains data on issuers, ratings, exposures, and credit
limits. Exposures are tracked on a current and potential basis and aggregated by
ultimate parent of the counterparty across investments, reinsurance receivables,
insurance products with credit risk, and derivatives.
As of December 31, 2019, the Company had no investment exposure to any credit
concentration risk of a single issuer or counterparty greater than 10% of the
Company's stockholders' equity, other than the U.S. government and certain U.S.
government agencies. For further discussion of concentration of credit risk in
the investment portfolio, see the Concentration of Credit Risk section in Note 6
- Investments of Notes to Consolidated Financial Statements.



                 Assets and Liabilities Subject to Credit Risk



Investments Essentially all of the Company's invested assets are subject to
credit risk. Credit related impairments on investments were $3 and $1, in 2019
and 2018, respectively. (See the Enterprise Risk Management section of the MD&A
under "Other-Than-Temporary Impairments.")



Reinsurance recoverables Reinsurance recoverables, net of an allowance for
uncollectible reinsurance, were $5,527 and $4,357, as of December 31, 2019 and
2018, respectively. (See the Enterprise Risk Management section of the MD&A
under "Reinsurance as a Risk Management Strategy.")
















Premiums receivable and agents' balances Premiums receivable and agents'
balances, net of an allowance for doubtful accounts, were $4,384 and $3,995, as
of December 31, 2019 and 2018, respectively. (For a discussion regarding
collectibility of these balances, see Note 1 - Basis of Presentation and
Significant Accounting Policies of Notes to Consolidated Financial Statements
under the section labeled "Revenue Recognition.")



Credit Risk of Derivatives
The Company uses various derivative counterparties in executing its derivative
transactions. The use of counterparties creates credit risk that the
counterparty may not perform in accordance with the terms of the derivative
transaction.
Downgrades to the credit ratings of the Company's insurance operating companies
may have adverse implications for its use of derivatives. In some cases,
downgrades may give derivative

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counterparties for OTC derivatives and clearing brokers for OTC-cleared
derivatives the right to cancel and settle outstanding derivative trades or
require additional collateral to be posted. In addition, downgrades may result
in counterparties and clearing brokers becoming unwilling to engage in or clear
additional derivatives or may require additional collateralization before
entering into any new trades.
Managing the Credit Risk of Counterparties to Derivative Instruments
The Company also has derivative counterparty exposure policies which limit the
Company's exposure to credit risk. The Company monitors counterparty exposure on
a monthly basis to ensure compliance with Company policies and statutory
limitations. The Company's policies with respect to derivative counterparty
exposure establishes market-based credit limits, favors long-term financial
stability and creditworthiness of the counterparty and typically requires credit
enhancement/credit risk reducing agreements, which are monitored and evaluated
by the Company's risk management team and reviewed by senior management.
The Company minimizes the credit risk of derivative instruments by entering into
transactions with high quality counterparties primarily rated A or better. The
Company also generally requires that OTC derivative contracts be governed by an
International Swaps and Derivatives Association ("ISDA") Master Agreement, which
is structured by legal entity and by counterparty and permits right of offset.
The Company enters into credit support annexes in conjunction with the ISDA
agreements, which require daily collateral settlement based upon agreed upon
thresholds.
The Company also has derivative counterparty exposure policies which limit the
Company's exposure to credit risk. Credit exposures are generally quantified
based on the prior business day's net fair value, including income accruals, of
all derivative positions transacted with a single counterparty for each separate
legal entity. The notional amount of derivative contracts represents the basis
upon which pay or receive amounts are calculated and are not reflective of
credit risk.  The Company enters into collateral arrangements in connection with
its derivatives positions and collateral is pledged to or held by, or on behalf
of, the Company to the extent the exposure is greater than zero, subject to
minimum transfer thresholds or negotiated thresholds. In accordance with
industry standards and the contractual requirements, collateral is typically
settled on the same business day. For the year ended December 31, 2019, the
Company incurred no losses on derivative instruments due to counterparty
default. For further discussion, see the Derivative Commitments section of Note
14 - Commitments and Contingencies of Notes to Consolidated Financial
Statements.
Use of Credit Derivatives
The Company may also use credit default swaps to manage credit exposure or to
assume credit risk to enhance yield.
Credit Risk Reduced Through Credit Derivatives
The Company uses credit derivatives to purchase credit protection with respect
to a single entity or referenced index. The Company purchases credit protection
through credit default swaps to economically hedge and manage credit risk of
certain fixed maturity investments across multiple sectors of the investment
portfolio. As of December 31, 2019 and 2018, the notional amount related to
credit derivatives that purchase credit

protection was $124 and $6, respectively, while the fair value was $(3) and $0,
respectively. These amounts do not include positions that are in offsetting
relationships.
Credit Risk Assumed Through Credit Derivatives
The Company also enters into credit default swaps that assume credit risk as
part of replication transactions. Replication transactions are used as an
economical means to synthetically replicate the characteristics and performance
of assets that are permissible investments under the Company's investment
policies. These swaps reference investment grade single corporate issuers and
indexes. As of December 31, 2019 and 2018, the notional amount related to credit
derivatives that assume credit risk was $500 and $1.1 billion, respectively,
while the fair value was $13 and $3, respectively. These amounts do not include
positions that are in offsetting relationships.
For further information on credit derivatives, see Note 7 - Derivatives of Notes
to Consolidated Financial Statements.
Credit Risk of Business Operations
A portion of the company's commercial business is written with large deductible
policies or retrospectively-rated plans. Under some commercial insurance
contracts with deductible features, the Company is obligated to pay the claimant
the full amount of the claim. The Company is subsequently reimbursed by the
contract holder for the deductible amount, and is subject to credit risk until
such reimbursement is made. Additionally, retrospectively rated policies are
utilized primarily for workers compensation coverage, whereby the ultimate
premium is determined based on actual loss activity. Although the
retrospectively rated feature of the policy substantially reduces insurance risk
for the Company, it does introduce credit risk to the Company. Les entreprises
results of operations could be adversely affected if a significant portion of
such contract holders failed to reimburse the Company for the deductible amount
or the retrospectively rated policyholders failed to pay additional premiums
owed. While the Company attempts to manage the risks discussed above through
underwriting, credit analysis, collateral requirements, provision for bad debt,
and other oversight mechanisms, the Company's efforts may not be successful.
Interest Rate Risk
Interest rate risk is the risk of financial loss due to adverse changes in the
value of assets and liabilities arising from movements in interest rates.
Interest rate risk encompasses exposures with respect to changes in the level of
interest rates, the shape of the term structure of rates and the volatility of
interest rates. Interest rate risk does not include exposure to changes in
credit spreads.
Sources of Interest Rate Risk The Company has exposure to interest rate risk
arising from its fixed maturity investments, commercial mortgage loans, capital
securities issued by the Company and discount rate assumptions associated with
the Company's claim reserves and pension and other post retirement benefit
obligations as well as from assets that support the Company's pension and other
post-retirement benefit plans.
Impact Changes in interest rates from current levels can have both favorable and
unfavorable effects for the Company.

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 Change in

Interest

   
   
   
   Rates             Favorable Effects                Unfavorable Effects
             Additional net investment income  Decrease in the fair value 

de

             
             
             
             due to reinvesting at higher      fixed income investment portfolio
     Ý       yields
                                               Higher interest expense on
                                               variable rate debt obligations
                                                    Increase in the fair value of the Lower net investment income due
             fixed income investment portfolio to reinvesting at lower
                                               investment yields
     Þ                                         Acceleration in paydowns and
                                               prepayments or calls of certain
                                               mortgage-backed and municipal
                                               securities


Management The Company manages its exposure to interest rate risk by
constructing investment portfolios that seek to protect the firm from the
economic impact associated with changes in interest rates by setting portfolio
duration targets that are aligned with the duration of the liabilities that they
support. The Company analyzes interest rate risk using various models including
parametric models and cash flow simulation under various market scenarios of the
liabilities and their supporting investment portfolios. Key metrics that the
Company uses to quantify its exposure to interest rate risk inherent in its
invested assets and the associated liabilities include duration, convexity and
key rate duration.
The Company utilizes a variety of derivative instruments to mitigate interest
rate risk associated with its investment portfolio or to hedge liabilities.
Interest rate caps, floors, swaps, swaptions, and futures may be used to manage
portfolio duration. Interest rate swaps are primarily used to convert interest
receipts or payments to a fixed or variable rate. 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. Interest rate swaps
are also used to hedge the variability in the cash flows of a forecasted
purchase or sale of fixed rate securities due to changes in interest rates. Comment
of December 31, 2019 and 2018, notional amounts pertaining to derivatives
utilized to manage interest rate risk, including offsetting positions, totaled
$11.4 billion and $10.5 billion, respectively primarily related to investments.
The fair value of these derivatives was $(59) and $(61) as of December 31, 2019
and 2018, respectively.




              Assets and Liabilities Subject to Interest Rate Risk



Fixed income investments The fair value of fixed income investments, which
include fixed maturities, commercial mortgage loans, and short-term investments,
was $49.3 billion and $43.7 billion at December 31, 2019 and 2018, respectively.
The weighted average duration of the portfolio, including derivative
instruments, was approximately 5.0 years and 4.7 years as of December 31, 2019
and 2018, respectively. Changes in the fair value of fixed maturities due to
changes in interest rates are reflected as a component of AOCI.



Long-term debt obligations The Company's variable rate debt obligations will
generally result in increased interest expense as a result of higher interest
rates; the inverse is true during a declining interest rate environment. Changes
in the value of long-term debt as a result of changes in interest rates will
impact the fair value of these instruments but not the carrying value in the
Company's Consolidated Balance Sheets.



Group life and disability product liabilities The cash outflows associated with
contracts issued by the Company's Group Benefits segment, primarily group life
and short and long-term disability policy liabilities, are not interest rate
sensitive but vary based on timing. Though the aggregate cash flow payment
streams are relatively predictable, these products rely upon actuarial pricing
assumptions (including mortality and morbidity) and have an element of cash flow
uncertainty. As of December 31, 2019 and 2018, the Company had $8,256 and
$8,445, respectively of reserves for group life and disability contracts.
Changes in the value of the liabilities as a result of changes in interest rates
will impact the fair value of these instruments but not the carrying value in
the Company's Consolidated Balance Sheets.

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Pension and other post-retirement benefit obligations The Company's pension and
other post-retirement benefit obligations are exposed to interest rate risk
based upon the sensitivity of present value obligations to changes in liability
discount rates as well as the sensitivity of the fair value of investments in
the plan portfolios to changes in interest rates. 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. (For further
discussion of discounting pension and other postretirement benefit obligations,
refer to Note 18 - Employee Benefit Plans of Notes to Consolidated Financial
Statements.) As of December 31, 2019 and 2018, the Company had $732 and $791,
respectively, of unfunded liabilities for pension and post-retirement benefit
obligations recorded within Other Liabilities in the accompanying Balance
Sheets.



Interest Rate Sensitivity
Group Life and Disability Reserves and Invested Assets Supporting Them
Included in the following table is the before tax change in the net economic
value of contracts issued by the Company's Group Benefits segment, primarily
group life and disability, for which fixed valuation discount rate assumptions
are established based upon investment returns assumed in pricing, along with the
corresponding invested assets. Also included in this analysis are the interest
rate sensitive derivatives used by the Company to hedge its exposure to interest
rate risk in the investment portfolios supporting these contracts. This analysis
does not include the assets and corresponding liabilities of other insurance
products such as automobile, property, workers' compensation and general
liability insurance. Certain financial instruments, such as limited partnerships
and other alternative investments, have been omitted from the analysis as the
interest rate sensitivity of these investments is generally lower and less
predictable than fixed income investments. The calculation of the estimated
hypothetical change in net economic value below assumes a 100 basis point upward
and downward parallel shift in the yield curve.
The selection of the 100 basis point parallel shift in the yield curve was made
only as an illustration of the potential hypothetical impact of such an event
and should not be construed as a prediction of future market events. Actual
results could differ materially from those illustrated below due to the nature
of the estimates and assumptions used in the analysis. The Company's sensitivity
analysis calculation assumes that the composition of invested assets and
liabilities remain materially consistent throughout the year and that the
current relationship between short-term and long-term interest rates will remain
constant over time. As a result, these calculations may not fully capture the
impact of portfolio re-allocations, significant product sales or non-parallel
changes in interest rates.

Interest Rate Sensitivity of Group Benefits Short and Long-term Disability

                                                                        Reserves and Invested Assets Supporting Them
                                                                                                                                                                            Change in Net Economic Value as of December 31,
                                                   2019                         2018
Basis point shift                               -100          +100          -100         +100
 Increase (decrease) in economic
value, before tax                      $          83   $      (101 ) $      

47 $ (68 )












The carrying value of assets supporting the liabilities related to the
businesses included in the table above was $10.6 billion and $10.0 billion, as
of December 31, 2019 and 2018, respectively, and included fixed maturities,
commercial mortgage loans and short-term investments. The assets supporting the
liabilities are monitored and managed within set duration guidelines and are
evaluated on a daily basis, as well as annually, using scenario simulation
techniques in compliance with regulatory requirements.
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, 2019 and 2018. Certain
financial instruments, such as limited partnerships and other alternative
investments, have been omitted from the analysis as the interest rate
sensitivity of these investments is generally lower and less predictable than
fixed income investments.
Interest Rate Sensitivity of Invested Assets Not Supporting Group Benefits Short
                       and Long-term Disability Reserves
                                           Change in Fair Value as of December 31,
                                              2019                          2018
Basis point shift                         -100           +100           -100           +100
 Increase (decrease) in fair
value, before tax                $       2,165   $     (1,853 ) $      1,761   $     (1,511 )


The carrying value of fixed maturities, commercial mortgage loans and short-term
investments related to the businesses included in the table above was $38.7
billion and $33.7 billion as of December 31, 2019 and 2018, respectively.
Long-term Debt
A 100 basis point parallel decrease in the yield curve would result in an
increase in the fair value of long-term debt by $607 and $331 as of December 31,
2019 and 2018, respectively. A 100 basis point parallel increase in the yield
curve would result in a decrease in the fair value of long-term debt by $499 and
$279 as of December 31, 2019 and 2018, respectively. Changes in the value of
long-term debt as a result of changes in interest rates will not impact the
carrying value in the Company's Consolidated Balance Sheets.

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Pension and Other Post-Retirement Plan Obligations
A 100 basis point parallel decrease in the yield curve would impact both the
value of the underlying pension assets and the value of the liability, resulting
in an increase in the unfunded liabilities for pension and other post-retirement
plan obligations of $185 and $178 as of December 31, 2019 and 2018,
respectively. A 100 basis point parallel increase in the yield curve would have
the inverse effect and result in a decrease in the unfunded liabilities for
pension and other post-retirement plan obligations of $138 and $134 as of
December 31, 2019 and 2018, respectively. Gains or losses due to changes in
interest rates on the pension and post-retirement plan obligations are recorded
within AOCI and are amortized into the actuarial loss component of net periodic
benefit cost when they exceed a threshold.
Discontinuation of LIBOR The Company continues to monitor the potential impacts
of the discontinuation of LIBOR which is used as a benchmark or reference rate
for certain investments and derivatives the Company owns and floating rate debt
the Company has issued. The Company has identified three principal types of
outstanding contracts that may be affected by the discontinuation of or
transition from LIBOR to an alternative reference rate, including floating rate
fixed maturity investments the Company holds in its investment portfolio;
derivative instruments that hedge interest rate risk; and two classes of junior
subordinated debentures that the Company has issued and are currently
outstanding.
•   Using our best estimate of expected future cash flows including prepayments

and maturities, the book value of LIBOR referenced floating rate fixed

maturities that the Company owns as of December 31, 2019 and that the Company

expects to be outstanding at the end of 2021, is approximately $2.7 billion.

The Company has performed a review of the LIBOR replacement language on these

assets and believes that greater than 80% have language that supports a

transition to a new standard benchmark rate. The Company will continue to

assess the remaining holdings and work with counterparties, as appropriate,

to determine LIBOR replacement language or manage the assets in other ways,

such as through asset sales.

• The notional amount of derivative instruments as of December, 31, 2019 with a

floating rate component that references LIBOR that the Company expects to be

outstanding at the end of 2021, considering maturities, is $10.3 billion,

with $10.1 billion being cleared through an exchange or clearinghouse. The

Company anticipates that substantially all existing derivatives referencing

LIBOR, whether or not cleared through an exchange or clearing house, will

transition from LIBOR to SOFR or other market alternative rates in line with

new market standards currently being developed.

• The Company has issued $1.1 billion of junior subordinated debentures that

mature after 2021 with LIBOR referenced floating interest rates. The Company

is assessing options to manage the risk associated with the transition away

from LIBOR related to these outstanding securities.












The uncertainty regarding the continued use and reliability of LIBOR, including
the timing of such transition, could reduce the value of some of our floating
rate fixed maturity investments and

increase the interest the Company pays on the junior subordinated debentures.
There is also a risk that certain derivatives may no longer qualify for hedge
accounting if reference rates change on derivative contracts but the reference
interest rate of the instruments being hedged do not change in a substantially
similar manner, particularly for cash flow hedges of floating rate investments
the Company owns and junior subordinated debentures the Company has issued. The
loss of hedge accounting could result in the recognition of gains or losses on
derivatives in the income statement rather than in accumulated other
comprehensive income. The FASB has proposed guidance that would allow companies
to continue to apply hedge accounting in these instances for one year after year
end 2021 when the U.K.Financial Conduct Authority is expected to stop requiring
financial institutions to publish LIBOR rates. Beyond the one year period ending
2022, there is uncertainty whether certain outstanding derivative contracts will
continue to qualify for hedge accounting either because the replacement rate of
the financial instrument being hedged is not sufficiently matched to the
reference rate of the derivative contract or because replacement rate language
for the hedged instrument has not been determined.
Equity Risk
Equity risk is the risk of financial loss due to changes in the value of global
equities or equity indices.
Sources of Equity Risk The Company has exposure to equity risk from invested
assets, assets that support the Company's pension and other post-retirement
benefit plans, and fee income derived from Hartford Funds assets under
management. In addition, the Company has equity exposure through its 9.7%
ownership interest in the limited partnership, Hopmeadow Holdings LP, that owns
the life and annuity business sold in 2018. For further information, see Note 21
- Business Dispositions and Discontinued Operations of Notes to Consolidated
Financial Statements.
Impact The investment portfolio is exposed to losses from market declines
affecting equity securities and derivatives, alternative assets and limited
partnerships which could negatively impact the Company's reported earnings. Pour
assets supporting pension and other post-retirement benefit plans, the Company
may be required to make additional plan contributions if equity investments in
the plan portfolios decline in value. Hartford Funds earnings are also
significantly influenced by the U.S. and other equity markets. Generally,
declines in equity markets will reduce the value of assets under management and
the amount of fee income generated from those assets. Increases in equity
markets will generally have the inverse impact.
Management The Company uses various approaches in managing its equity exposure,
including limits on the proportion of assets invested in equities,
diversification of the equity portfolio, and hedging of changes in equity
indices. For assets supporting pension and other post-retirement benefit plans,
the asset allocation mix is reviewed on a periodic basis. In order to minimize
risk, the pension plans maintain a listing of permissible and prohibited
investments and impose concentration limits and investment quality requirements
on permissible investment options.

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                 Assets and Liabilities Subject to Equity Risk



Investment portfolio The investment portfolio is exposed to losses from market
declines affecting equity securities and derivatives, and certain alternative
assets and limited partnerships. Generally, declines in equity markets will
reduce the value of these types of investments and could negatively impact the
Company's earnings while increases in equity will have the inverse impact. Pour
equity securities, the changes in fair value are reported in net realized
capital gains and losses. For alternative assets and limited partnerships, the
Company's share of earnings for the period is recorded in net investment income,
though typically on a delay based on the availability of the underlying
financial statements. For a discussion of equity sensitivity, see below.



Assets supporting pension and other post-retirement benefit plans The Company
may be required to make additional plan contributions if equity investments in
the plan portfolios decline in value. For a discussion of equity sensitivity,
see below.
Declines in value are recognized as unrealized losses in AOCI. Increases in
equity markets are recognized as unrealized gains in AOCI. Unrealized gains and
losses in AOCI are amortized into the actuarial loss component of net periodic
benefit cost when they exceed a threshold. For further discussion of equity risk
associated with the pension plans, see Note 18 - Employee Benefit Plans of Notes
į

Consolidated Financial Statements.
















Assets under management Assets under management in Hartford Funds may decrease
in value during equity market declines, which would result in lower earnings
because fee income is earned based upon the value of assets under management.



Equity Sensitivity
Investment portfolio and the assets supporting pension and other post-retirement
benefit plans
Included in the following tables are the estimated before tax change in the
economic value of the Company's invested assets and assets supporting pension
and other post-retirement benefit plans with sensitivity to equity risk. The
calculation of the hypothetical change in economic value below assumes a 20%
upward and downward shock to the Standard & Poor's 500 Composite Price Index
("S&P 500"). For limited partnerships and other alternative investments, the
movement in economic value is calculated using a beta analysis largely derived
from historical experience relative to the S&P 500.
The selection of the 20% shock to the S&P 500 was made only as an illustration
to the potential hypothetical impact of such an event and should not be
construed as a prediction of future market events. Actual results could differ
materially from those illustrated below due to the nature of the estimates and
assumptions used in the analysis. These calculations do not capture the impact
of portfolio re-allocations.
                             Equity Sensitivity (1)
                                             As of December 31, 2019                   As of December 31, 2018
                                                       Shock to S&P 500                          Shock to S&P 500
(Before tax)                          Fair Value        +20%         -20%       Fair Value        +20%         -20%
Investment Portfolio                 $     3,295   $    440        $  (407 )   $     3,045   $    419        $  (418 )
Assets supporting pension and other
post-retirement benefit plans        $     1,372   $    230        $  (230 )   $     1,226   $    209        $  (209 )


(1) Table excludes the Company's investment in Hopmeadow Holdings LP which is

reported in other assets on the Company's Consolidated Balance Sheets.












Hartford Funds assets under management
Hartford Funds earnings are significantly influenced by the U.S. and other
equity markets. If equity markets were to hypothetically decline 20% and remain
depressed for one year, the estimated before tax impact on reported earnings for
that one year period is $(50) as of December 31, 2019. The selection of the 20%
shock to the S&P 500 was made only as an illustration to the potential
hypothetical impact of such an event and should not be construed as a prediction
of future market events. Actual results could differ materially due to the
nature of the estimates and assumptions used in the analysis.

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Foreign Currency Exchange Risk
Foreign currency exchange risk is the risk of financial loss due to changes in
the relative value between currencies.
Sources of Currency Risk The Company has foreign currency exchange risk in
non-U.S. dollar denominated cash, fixed maturities, equities, and derivative
instruments. In addition, the Company has non-U.S. subsidiaries, some with
functional currencies other than U.S. dollar, and which transact business in
multiple currencies resulting in assets and liabilities denominated in foreign
currencies.
Impact Changes in relative values between currencies can create variability in
cash flows and realized or unrealized gains and losses on changes in the value
of assets and liabilities. The impact on the fair value of fixed maturities, AFS
due to changes in foreign currency exchange rates, in relation to functional
currency, is reported in unrealized gains or losses as part of other
comprehensive income. The realization of gains or losses resulting from
investment sales or resulting from changes in investments that record fair value
through the income statement due to changes in foreign currency exchange rates
is reflected through net realized capital gains and losses.
In regards to insurance and reinsurance contracts that the Company enters into
for which we are obligated to pay losses in a foreign currency, the impact of
changes in foreign currency exchange rates on assets and liabilities related to
these contracts is reflected through net realized capital gains and losses.
These assets or liabilities include, but are not limited to, cash and cash
equivalents, premiums receivable, reinsurance recoverables, and unpaid losses
and loss adjustment expenses. Additionally, the Company translates the assets,
liabilities, and income of non-U.S. dollar functional currency legal entities
into U.S. dollar. This translation amount is reported as a component of other
comprehensive income.
Management The Company manages its foreign currency exchange risk primarily
through asset-liability matching and through the use of derivative instruments.
However, legal entity capital is invested in local currencies in order to
satisfy regulatory requirements and to support local insurance operations. The
foreign currency exposure of non-U.S. dollar denominated investments will most
commonly be reduced through the sale of the assets or through hedges using
foreign currency swaps and forwards.




        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. Changes in relative values between currencies can positively or
negatively impact net realized capital gains and losses or unrealized gains
(losses) as part of other comprehensive income.



Assets supporting pension plan Changes in relative values between currencies can
positively or negatively impact unrealized gains and losses in AOCI. Unrealized
gains and losses in AOCI are amortized into the actuarial loss component of net
periodic benefit cost when they exceed a threshold. As of December 31, 2019 and
2018, the Company had pension plan assets of $83 and $68, respectively, of
non-U.S. dollar investments in multiple currencies. These amounts are excluded
from the sensitivity analysis below.



Insurance contract related assets and liabilities The Company has non-U.S.
dollar denominated insurance contracts and associated premiums receivable,
reinsurance recoverables and unpaid losses and loss adjustment expenses, that
are exposed to foreign exchange risk. For contracts that are within U.S, dollar
functional currency legal entities, changes in foreign currency exchange rates
can positively or negatively impact net realized capital gains and losses. Pour
contracts within non-U.S. dollar functional currency legal entities, changes in
foreign currency exchange rates can positively or negatively impact other
comprehensive income.



Foreign Currency Sensitivity
For the Company's primary currencies that create foreign exchange risk, the
following table provides the estimated impact of a hypothetical 10% unfavorable
change in exchange rates. Actual results could differ materially due to the
nature of the estimates and assumptions used in the analysis. The amounts
presented are in U.S. dollars and before-tax.
                        Foreign Currency Sensitivity (1)
                          GBP    CAD     10% Unfavorable Change
December 31, 2019
Net assets (liabilities) $ 336  $ 173  $                (46 )

December 31, 2018
Net assets (liabilities) $   -  $  89  $                 (8 )


(1) Amount excludes currencies where the value of net assets in U.S. dollar

equivalent is less than 1% of total net assets of the Company.












Financial Risk on Statutory Capital
Statutory surplus amounts and RBC ratios may increase or decrease in any period
depending upon a variety of factors and

may be compounded in extreme scenarios or if multiple factors occur at the same
time. In general, as equity market levels and interest rates decline, the amount
and volatility of either our

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actual or potential obligation, as well as the related statutory surplus and
capital margin can be materially negatively affected, sometimes at a greater
than linear rate. At times the impact of changes in certain market factors or a
combination of multiple factors on RBC ratios can be counterintuitive. Factors
include:
•   A decrease in the value of certain fixed-income and equity securities in our

investment portfolio, due in part to credit spreads widening or a decline in

equity market levels, may result in a decrease in statutory surplus and RBC

ratios.

• Decreases in the value of certain derivative instruments that do not get

hedge accounting, may reduce statutory surplus and RBC ratios.

• Non-market factors can also impact the amount and volatility of either our

actual or potential obligation, as well as the related statutory surplus and

    
    
    
    capital margin.



Most of these factors are outside of the Company's control. Les entreprises
financial strength and credit ratings are significantly influenced by the
statutory surplus amounts and RBC ratios of our insurance company subsidiaries.
In addition, rating agencies may implement changes to their internal models that
have the effect of increasing or decreasing the amount of statutory capital we
must hold in order to maintain our current ratings.
Investment Portfolio Risk
The following table presents the Company's fixed maturities, AFS, by credit
quality. The credit ratings referenced throughout this section are based on
availability and are generally the midpoint of the available ratings among
Moody's, S&P, and Fitch. If no rating is available from a rating agency, then an
internally developed rating is used.
                       Fixed Maturities by Credit Quality
                                                December 31, 2019                                 December 31, 2018
                                                                    Percent of                                        Percent of
                                                                    Total Fair                                        Total Fair
                                  Amortized Cost     Fair Value       Value         Amortized Cost     Fair Value       Value
United States
Government/Government agencies   $         5,478   $      5,644       13.4 %       $         4,446   $      4,430       12.4 %
AAA                                        6,412          6,617       15.7 %                 6,366          6,440       18.1 %
AA                                         7,746          8,146       19.3 %                 6,861          6,985       19.6 %
A                                         10,144         10,843       25.7 %                 8,314          8,370       23.5 %
BBB                                        8,963          9,530       22.6 %                 8,335          8,163       22.9 %
BB & below                                 1,335          1,368        3.3 %                 1,281          1,264        3.5 %
Total fixed maturities, AFS      $        40,078   $     42,148      100.0 %       $        35,603   $     35,652      100.0 %


The fair value of fixed maturities, AFS increased as compared to December 31,
2018, primarily due to the transfer in of assets related to the acquisition of
Navigators Group as well as an increase in valuations due to lower interest
rates and tighter

credit spreads. Fixed Maturities, FVO, are not included in the preceding table.
For further discussion on FVO securities, see Note 5 - Fair Value Measurements
of Notes to Consolidated Financial Statements.

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Part II - Item 7. Management's Discussion and Analysis of Financial Condition
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                               Securities by Type
                                                      December 31, 2019                                                                  December 31, 2018
                                                                                             Percent                                                                            Percent
                           Cost or     Gross Unrealized  Gross Unrealized                 of Total Fair       Cost or     Gross Unrealized  Gross Unrealized                 of Total Fair
                       Amortized Cost       Gains             Losses         Fair Value       Value       Amortized Cost        Gains            Losses         Fair Value       Value
Asset-backed
securities ("ABS")
Consumer loans         $       1,350   $           16   $         (3 )     $      1,363       3.2 %       $       1,159   $             5   $         (1 )    $      1,163       3.3 %
Other                            111                2              -                113       0.3 %                 113                 -              -               113       0.3 %
Collateralized loan
obligations ("CLOs")           2,186                5             (8 )            2,183       5.2 %               1,455                 2            (20 )           1,437       4.0 %
CMBS
Agency (1)                     1,878               43             (7 )            1,914       4.5 %               1,447                13            (33 )           1,427       4.0 %
Bonds                          2,108               86             (4 )            2,190       5.2 %               1,845                13            (29 )           1,829       5.1 %
Interest only                    224               12             (2 )              234       0.6 %                 289                 9             (2 )             296       0.8 %
Corporate
Basic industry                   539               31             (1 )              569       1.4 %                 604                 8            (21 )             591       1.7 %
Capital goods                  1,495               72             (9 )            1,558       3.7 %               1,132                 8            (31 )           1,109       3.1 %
Consumer cyclical                991               57             (1 )            1,047       2.5 %                 943                 9            (29 )             923       2.6 %
Consumer non-cyclical          2,372              137             (3 )            2,506       5.9 %               1,936                11            (71 )           1,876       5.3 %
Energy                         1,550               96             (3 )            1,643       3.9 %               1,156                14            (43 )           1,127       3.1 %
Financial services             3,977              192             (4 )            4,165       9.9 %               3,368                17            (99 )           3,286       9.2 %
Tech./comm.                    2,360              208              -              2,568       6.1 %               1,720                34            (54 )           1,700       4.8 %
Transportation                   743               44              -                787       1.9 %                 548                 4            (18 )             534       1.5 %
Utilities                      2,019              132             (4 )            2,147       5.1 %               2,017                43            (69 )           1,991       5.6 %
Other                            389               17              -                406       1.0 %                 272                 -            (11 )             261       0.7 %
Foreign govt./govt.
agencies                       1,057               66              -              1,123       2.7 %                 866                 7            (26 )             847       2.4 %
Municipal bonds
Taxable                          815               45             (1 )              859       2.0 %                 629                14            (17 )             626       1.8 %
Tax-exempt                     7,948              692             (1 )            8,639      20.5 %               9,343               407            (30 )           9,720      27.3 %
RMBS
Agency                         2,409               57             (1 )            2,465       5.8 %               1,508                 7            (29 )           1,486       4.2 %
Non-agency                     1,786               17             (2 )            1,801       4.2 %                 933                 5             (6 )             932       2.6 %
Alt-A                             40                3              -                 43       0.1 %                  43                 4              -                47       0.1 %
Sub-prime                        540               20              -                560       1.3 %                 786                28              -               814       2.3 %
U.S. Treasuries                1,191               75             (1 )            1,265       3.0 %               1,491                41            (15 )           1,517       4.2 %

Total fixed
maturities, AFS $ 40,078 $ 2,125 $ (55 ) $ 42,148 100.0 % $ 35,603 $

                                            703   $       (654 )    $     35,652     100.0 %
Fixed maturities, FVO                                                      $         11                                                                       $         22
Equity securities, at
fair value                                                                 $      1,657                                                                       $      1,214

(1) Includes securities with pools of loans issued by the Small Business

Administration which are backed by the full faith and credit of the U.S.

government.












The fair value of AFS securities increased as compared with December 31, 2018,
primarily due to the transfer in of assets related to the acquisition of
Navigators Group as well as an increase in valuations due to lower interest
rates and tighter credit spreads.
European Exposure
While the European economy is showing signs of stabilization, structural
challenges including elevated sovereign debt levels and demographic headwinds
are expected to suppress economic

growth in the region. Political risk will likely remain elevated in L'Europe
during 2020 due to uncertainty surrounding Brexit, increasing pressure on
centrist governments in France et Germany and ongoing concern over Italian
fiscal policy.  The Company manages the credit risk associated with its European
securities within the investment portfolio on an on-going basis using several
processes which are supported by macroeconomic analysis and issuer credit
analysis.
For additional details regarding the Company's management of credit risk, see
the Credit Risk section of this MD&A.

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As of December 31, 2019, the Company's European investment exposure had an
amortized cost of $3.0 billion and a fair value of $3.1 billion, or 6% of total
invested assets; as of December 31, 2018, both the amortized cost and fair value
totaled $2.5 billion. The investment exposure largely relates to corporate
entities which are domiciled in or generate a significant portion of their
revenue within the United Kingdom, Germany, Switzerland, Netherlandset
Sweden. As of both December 31, 2019 and 2018, the weighted average credit
quality of European investments was A-. Entities domiciled in the United Kingdom
comprise the Company's largest European exposure; as of December 31, 2019 and
2018, the U.K. exposure totals less than

3% of total invested assets and largely relates to the industrial, sovereign,
and financial services sectors and has an average credit rating of A-. The
majority of the European investments are U.S. dollar-denominated. For a
discussion of foreign currency risks, see the Foreign Currency Exchange Risk
section of this MD&A.
Commercial & Residential Real Estate
The following table presents the Company's exposure to CMBS and RMBS by current
credit quality included in the preceding Securities by Type table.
               Exposure to CMBS and RMBS as of December 31, 2019
                                 AAA                               AA                                 A                                BBB                         BB and Below                         Total
                    Amortized Cost     Fair Value     Amortized Cost     Fair Value     Amortized Cost     Fair Value     Amortized Cost     Fair Value    Amortized Cost    Fair Value     Amortized Cost     Fair Value
CMBS
  Agency (1)      $          1,878   $      1,914   $              -   $          -   $              -   $          -   $              -   $          -   $         -      $          -   $          1,878   $      1,914
  Bonds                      1,013          1,055                561            576                416            438                118            121             -                 -              2,108          2,190
  Interest Only                150            158                 67             70                  -              -                  5              5             2                 1                224            234
Total CMBS                   3,041          3,127                628            646                416            438                123            126             2                 1              4,210          4,338
RMBS
  Agency                     2,386          2,441                 23             24                  -              -                  -              -             -                 -              2,409          2,465
  Non-Agency                 1,215          1,226                300            304                257            257                 13             13             1                 1              1,786          1,801
  Alt-A                          -              -                  8              8                  4              4                  8              9            20                22                 40             43
  Sub-Prime                      9              9                 56             57                167            173                164            171           144               150                540            560
Total RMBS                   3,610          3,676                387            393                428            434                185            193           165               173              4,775          4,869
Total CMBS & RMBS $          6,651   $      6,803   $          1,015   $      1,039   $            844   $        872   $            308   $        319   $       167      $        174   $          8,985   $      9,207


               Exposure to CMBS and RMBS as of December 31, 2018
                                 AAA                               AA                                 A                                BBB                         BB and Below                         Total
                    Amortized Cost     Fair Value     Amortized Cost     Fair Value     Amortized Cost     Fair Value     Amortized Cost     Fair Value    Amortized Cost    Fair Value     Amortized Cost     Fair Value
CMBS
  Agency (1)      $          1,447   $      1,427   $              -   $          -   $              -   $          -   $              -   $          -   $         -      $          -   $          1,447   $      1,427
  Bonds                        983            973                444            436                368            370                 50             50             -                 -              1,845          1,829
  Interest Only                204            210                 77             79                  1              1                  5              4             2                 2                289            296
Total CMBS                   2,634          2,610                521            515                369            371                 55             54             2                 2              3,581          3,552
RMBS
  Agency                     1,508          1,486                  -              -                  -              -                  -              -             -                 -              1,508          1,486
  Non-Agency                   611            610                167            167                111            109                 33             33            11                13                933            932
  Alt-A                          -              -                 10             10                  4              5                  9              9            20                23                 43             47
  Sub-Prime                     31             32                 72             73                211            217                179            186           293               306                786            814
Total RMBS                   2,150          2,128                249            250                326            331                221            228           324               342              3,270          3,279
Total CMBS & RMBS $          4,784   $      4,738   $            770   $        765   $            695   $        702   $            276   $        282   $       326      $        344   $          6,851   $      6,831


(1)Includes securities with pools of loans issued by the Small Business
Administration which are backed by the full faith and credit of the U.S.
government.
The Company also has exposure to commercial mortgage loans. These loans are
collateralized by real estate properties that are diversified both
geographically throughout États-Unis and by property type. These
commercial loans are originated by the Company as high quality whole loans, and
the Company may sell

participation interests in one or more loans to third parties. A loan
participation interest represents a pro-rata share in interest and principal
payments generated by the participated loan, and the relationship between the
Company as loan originator, lead participant and servicer and the third party as
a participant are

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governed by a participation agreement.
As of December 31, 2019, commercial mortgage loans had an amortized cost of $4.2
billion and carrying value of $4.2 billion, with no valuation allowance. As of
December 31, 2018, commercial mortgage loans had an amortized cost of $3.7
billion and carrying value of $3.7 billion with a valuation allowance of $1.
The Company funded $840 of commercial mortgage loans with a weighted average
loan-to-value ("LTV") ratio of 59% and a weighted average yield of 3.6% during
the twelve months ended December 31, 2019. The Company continues to originate

commercial loans within primary markets, such as office, industrial and
multi-family, focusing on loans with strong LTV ratios and high quality property
collateral. There were no mortgage loans held for sale as of December 31, 2019
or December 31, 2018.
Municipal Bonds
The following table presents the Company's exposure to municipal bonds by type
and weighted average credit quality included in the preceding Securities by Type
table.
               Available For Sale Investments in Municipal Bonds
                                   December 31, 2019                             December 31, 2018
                                                        Weighted                                      Weighted
                                                         Average                                       Average
                                                         Credit                                        Credit
                        Amortized Cost     Fair Value    Quality      Amortized Cost     Fair Value    Quality
General Obligation    $          1,157   $      1,268      AA       $          1,222   $      1,275       AA
Pre-refunded (1)                   936            985      AAA                 1,845          1,904      AAA
Revenue
Transportation                   1,509          1,675       A+                 1,449          1,537       A+
Health Care                      1,360          1,454       A+                 1,270          1,304      AA-
Education                          784            853       AA                   941            953       AA
Leasing (2)                        781            842      AA-                   772            799      AA-
Water & Sewer                      660            700       AA                   816            847       AA
Sales Tax                          456            517       AA                   507            541       AA
Power                              339            374       A                    308            328       A+
Housing                            114            117      AA+                    33             35       A+
Other                              667            713      AA-                   809            823      AA-
Total Revenue                    6,670          7,245      AA-                 6,905          7,167      AA-
Total Municipal       $          8,763   $      9,498      AA-      $          9,972   $     10,346       AA

(1) Pre-Refunded bonds are bonds for which an irrevocable trust containing

sufficient U.S. treasury, agency, or other securities has been established to

fund the remaining payments of principal and interest.

(2) Leasing revenue bonds are generally the obligations of a financing authority

established by the municipality that leases facilities back to a

municipality. The notes are typically secured by lease payments made by the

municipality that is leasing the facilities financed by the issue. Lease

payments may be subject to annual appropriation by the municipality or the

municipality may be obligated to appropriate general tax revenues to make

lease payments.












As of both December 31, 2019 and December 31, 2018, the largest issuer
concentrations were the New York Dormitory Authority, the New York City
Transitional Finance Authority, and the Commonwealth of Massachusetts, which
each comprised less than 3% of the municipal bond portfolio and were primarily
comprised of general obligation and revenue bonds. In total, municipal bonds
make up 18% of the fair value of the Company's investment portfolio. In light of
changes in corporate income tax rates that began in 2018, the Company has
reduced its exposure to municipal bonds through maturities, asset sales and
principal repayments.
Limited Partnerships and Other Alternative Investments
The following table presents the Company's investments in limited partnerships
and other alternative investments which

include hedge funds, real estate funds and private equity funds. Real estate
funds consist of investments primarily in real estate joint ventures and, to a
lesser extent, equity funds. Private equity funds primarily consist of
investments in funds whose assets typically consist of a diversified pool of
investments in small to mid-sized non-public businesses with high growth
potential as well as limited exposure to public markets.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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 Limited Partnerships and Other Alternative Investments - Net Investment Income
                                                 Year Ended December 31,
                                        2019               2018               2017
                                   Amount   Yield     Amount   Yield     Amount   Yield
Hedge funds                       $      5   7.2 %   $    4    9.3  %   $      3  23.6 %
Real estate funds                       70  17.0 %       58   12.0  %         43   9.1 %
Private equity funds                   126  16.6 %      144   22.5  %        122  20.7 %
Other alternative investments (1)       31   8.2 %       (1 ) (0.2 )%          6   1.6 %
Total                             $    232  14.4 %   $  205   13.2  %   $    174  12.0 %

Investments in Limited Partnerships and Other Alternative Investments

                                                                                                                                                        December 31, 2019            December 31, 2018
                                       Amount       Percent         Amount       Percent
Hedge funds                       $        94          5.3 %   $        51          3.0 %
Real estate funds                         407         23.2 %           499         29.0 %
Private equity and other funds            851         48.4 %           788         45.7 %
Other alternative investments (1)         406         23.1 %           385         22.3 %
Total                             $     1,758        100.0 %   $     1,723        100.0 %

(1) Consists of an insurer-owned life insurance policy which is invested in hedge

funds and other investments.












Available-for-sale Securities - Unrealized Loss Aging
The total gross unrealized losses were $55 as of December 31, 2019, and have
decreased $599 from December 31, 2018, primarily due to lower interest rates and
tighter credit spreads. As of December 31, 2019, $50 of the gross unrealized
losses were associated with securities depressed less than 20% of cost or
amortized cost. The remaining $5 of gross unrealized losses were associated with
securities depressed greater than 20%. The securities depressed more than 20%
are primarily related to commercial real estate securities that were purchased
at tighter credit spreads.
As part of the Company's ongoing security monitoring process, the Company has
reviewed its AFS securities in an unrealized loss

position and concluded that these securities are temporarily depressed and are
expected to recover in value as the securities approach maturity or as market
spreads tighten. For these securities in an unrealized loss position where a
credit impairment has not been recorded, the Company's best estimate of expected
future cash flows are sufficient to recover the amortized cost basis of the
security. Furthermore, the Company neither has an intention to sell nor does it
expect to be required to sell these securities. For further information
regarding the Company's impairment analysis, see Other-Than-Temporary
Impairments in the Investment Portfolio Risks and Risk Management section of
this MD&A.
                    Unrealized Loss Aging for AFS Securities
                                                December 31, 2019                                           December 31, 2018
                                         Cost or                                                    Cost or
Consecutive Months            Items  Amortized Cost    Fair Value    Unrealized Loss     Items  Amortized Cost    Fair Value    Unrealized Loss
Three months or less           347   $       2,529   $      2,514   $         (15 )       468   $       3,191   $      3,153   $          (38 )
Greater than three to six
months                         114             712            704              (8 )       359           2,530          2,487              (43 )
Greater than six to nine
months                          50             190            188              (2 )       347           2,243          2,186              (57 )
Greater than nine to eleven
months                          15              24             23              (1 )       817           5,921          5,688             (233 )
Twelve months or more          345           1,440          1,411             (29 )       969           5,272          4,989             (283 )
Total                          871   $       4,895   $      4,840   $         (55 )     2,960   $      19,157   $     18,503   $         (654 )



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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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    Unrealized Loss Aging for AFS Securities Continuously Depressed Over 20%
                                                    December 31, 2019                                                December 31, 2018
                                          Cost or Amortized                                               Cost or Amortized
Consecutive Months              Items           Cost         Fair Value    Unrealized Loss       Items          Cost          Fair Value    Unrealized Loss
Three months or less             -        $             -   $         -   $           -           13      $            59   $         43   $         (16 )
Greater than three to six
months                           5                      2             1              (1 )          -                    -              -               -
Greater than six to nine
months                           -                      -             -               -            3                    3              2              (1 )
Greater than nine to eleven
months                           -                      -             -               -            2                    2              1              (1 )
Twelve months or more           32                     10             6              (4 )         36                   13              8              (5 )
Total                           37        $            12   $         7   $          (5 )         54      $            77   $         54   $         (23 )


    Other-than-temporary Impairments Recognized in Earnings by Security Type
                              For the years ended December 31,
                                     2019                    2018   2017
Credit Impairments
CMBS                           -                                1      2
Corporate                      3                                -      -
Equity Impairments             -                                -      6
Total              $           3                            $   1  $   8


Year ended December 31, 2019
For the year ended December 31, 2019, impairments recognized in earnings were
comprised of credit impairments of $3 related to two corporate securities
experiencing issuer-specific financial difficulties.
The Company incorporates its best estimate of future performance using internal
assumptions and judgments that are informed by economic and industry specific
trends, as well as our expectations with respect to security specific
developments.
Non-credit impairments recognized in other comprehensive income were $3 for the
year-ended December 31, 2019.
Future impairments may develop as the result of changes in intent-to-sell
specific securities that are in an unrealized loss position or if modeling
assumptions, such as macroeconomic factors or security specific developments,
change unfavorably from our current modeling assumptions, resulting in lower
cash flow expectations.
Year ended December 31, 2018
For the year ended December 31, 2018, impairments recognized in earnings were
comprised of credit impairments of $1 related to CMBS interest-only securities
and were identified through security specific review of the expected future cash
flows.

CAPITAL RESOURCES AND LIQUIDITY








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



                   SUMMARY OF CAPITAL RESOURCES AND LIQUIDITY


Capital available to the holding company as of December 31, 2019:
• $1.2 billion in fixed maturities, short-term investments, and cash at The

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

• A senior unsecured five-year revolving credit facility that provides for

borrowing capacity up to $750 of unsecured credit through March 29, 2023. No

borrowings were outstanding and $5 in letters of credit were issued as of

December 31, 2019.

• Borrowings available under a commercial paper program to a maximum of $750.

As of December 31, 2019, there was no commercial paper outstanding.

• An intercompany liquidity agreement that allows for short-term advances of

funds among HFSG Holding Company and certain affiliates of up to $2.0 billion

                for liquidity and other general corporate purposes.




2020 expected dividends and other sources of capital:
• P&C – The Company's property and casualty insurance subsidiaries have

dividend capacity of $1.6 billion for 2020, with $850 to $900 of net

dividends expected in 2020.

• Group Benefits – HLA has dividend capacity of $534 in 2020 with $300 to $350

of dividends expected in 2020.

• Hartford Funds – HFSG Holding Company expects to receive $100 to $125 in

                dividends from Hartford Funds in 2020.



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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
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• Cash tax receipts of approximately $520 to $540, including realization of net

                operating losses and AMT credits.





Expected liquidity requirements for the next twelve months as of December 31,
2019:
• $500 maturing debt payment in March of 2020.


• $235 of interest on debt.

• $21 dividends on preferred stock, subject to the discretion of the Board of

Directors.

• $465 of common stockholders' dividends, subject to the discretion of the

                Board of Directors and before share repurchases.





Equity repurchase program:
Authorization for equity repurchases of up to $1.0 billion effective through
December 31, 2020. Under the program the company repurchased 3.4 million shares
during the period from January 1, 2019 to December 31, 2019 for $200 with $800
of authorization remaining as of December 31, 2019.



Liquidity Requirements and Sources of Capital
The Hartford Financial Services Group, Inc. ("HFSG Holding Company")
The liquidity requirements of the holding company of The Hartford Financial
Services Group, Inc. have been and will continue to be met by HFSG Holding
Company's fixed maturities; short-term investments and cash; dividends,
principally from its subsidiaries; and tax receipts, including realization of
net operating losses and refunds of prior period AMT credits available to the
HFSG Holding Company. In addition, HFSG Holding Company can meet its liquidity
requirements through the issuance of common stock, debt or other capital
securities and borrowings from its credit facilities, as needed.
During the second half of 2019, approximately $115 of capital was contributed by
HFSG Holding Company to its Lloyd's corporate member and an additional
contribution of approximately $30 is expected to be made in March 2020.  It is
expected that the amount of letters of credit under the Lloyd's Letter of Credit
Facility permitted to support Lloyd's capital requirements will be reduced by
the end of 2020, which will require the Company to seek alternative means of
supporting its obligations at Lloyd's, including utilizing HFSG Holding Company
resources.
Debt
On January 15, 2019, The Hartford repaid at maturity the $413 principal amount
of its 6.0% senior notes.
In the Navigators Group acquisition, the Company assumed $265 par value 5.75%
senior notes due on October 15, 2023 with a fair value of $284 as of the
acquisition date.

On August 19, 2019, The Hartford issued $600 of 2.8% senior notes ("2.8% Notes")
due August 19, 2029 and $800 of 3.6% senior notes ("3.6% Notes") due August 19,
2049 for net proceeds of approximately $1.38 billion, after deducting
underwriting discounts and expenses. Under both senior note issuances, interest
is payable semi-annually in arrears on August 19 and February 19, commencing
February 19, 2020.
After receiving proceeds from the issuance of the 2.8% Notes and 3.6% Notes, in
third quarter 2019, The Hartford repaid $265 of 5.75% senior notes due 2023 that
had been assumed in the Navigators Group acquisition and $800 of 5.125% senior
notes due 2022 of The Hartford Financial Services Group, Inc., and recognized a
loss on extinguishment of debt of $90 before tax. The balance of the proceeds
was used for general corporate purposes.
For additional information on Debt, see Note 13 - Debt of Notes to Consolidated
Financial Statements.
Equity
Under a $1.0 billion share repurchase authorization by the Board of Directors in
February, 2019, during the year ended December 31, 2019, the Company repurchased
3.4 million common shares for $200. During the period from January 1, 2020 to
February 19, 2020, the Company repurchased approximately 1.4 million common
shares for $82 under this authorization.  Any repurchase of shares under the
equity repurchase program is dependent on market conditions and other factors.
For further information about equity repurchases, see Part II - Item 5. Market
for The Hartford's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
In 2018, the Company issued preferred stock and used the net proceeds from the
offering to help fund repayment of the Company's 6.000% Senior Notes due January
15, 2019.
For further information regarding Preferred Stock, see Note 15 - Equity of Notes
to Consolidated Financial Statements.
Dividends
The Hartford's Board of Directors declared the following quarterly dividends
since October 1, 2019:
Common Stock Dividends

Declared Record Payable Amount per share
October 23, 2019 December 2, 2019 January 2, 2020 $

                                                    0.30
February 3, 2020    March 2, 2020   April 2, 2020 $            0.325


Preferred Stock Dividends

    
    
    
    Declared           Record           Payable       Amount per share
 October 23, 2019 February 1, 2020 February 18, 2020 $           375.00
February 20, 2020      May 1, 2020      May 15, 2020 $           375.00


There are no current restrictions on HFSG Holding Company's ability to pay
dividends to its stockholders.
For a discussion of restrictions on dividends to HFSG Holding Company from its
insurance subsidiaries, see "Dividends from Insurance Subsidiaries" below. For a
discussion of potential

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limitations on the HFSG Holding Company's ability to pay dividends, see Part I,
Item 1A, - Risk Factors for the risk factor "Our ability to declare and pay
dividends is subject to limitations".
Pension Plans and Other Postretirement Benefits
While the Company has significant discretion in making voluntary contributions
to the U. S. qualified defined benefit pension plan, minimum contributions are
mandated in certain circumstances pursuant to the Employee Retirement Income
Security Act of 1974, as amended by the Pension Protection Act of 2006, the
Worker, Retiree, and Employer Recovery Act of 2008, the Preservation of Access
to Care for Medicare Beneficiaries and Pension Relief Act of 2010, the Moving
Ahead for Progress in the 21st Century Act of 2012 (MAP-21) and Internal Revenue
Code regulations. The Company made contributions to the U. S. qualified defined
benefit pension plan of approximately $70, $101 and $280 in 2019, 2018 and 2017,
respectively. No contributions were made to the other postretirement plans in
2019, 2018 and 2017. The Company's 2019, 2018 and 2017 required minimum funding
contributions were immaterial. The Company does not have a 2020 required minimum
funding contribution for the U.S. qualified defined benefit pension plan and the
funding requirements for all pension plans are expected to be immaterial. The
Company has not determined whether, and to what extent, contributions may be
made to the U. S. qualified defined benefit pension plan in 2020. The Company
will monitor the funded status of the U.S. qualified defined benefit pension
plan during 2020 to make this determination.
Beginning in 2017, the Company began to use a full yield-curve approach in the
estimation of the interest cost component of net periodic benefit costs for its
qualified and non-qualified pension plans and the postretirement benefit plan.
The full yield curve approach applies the specific spot rates along the yield
curve that are used in its determination of the projected benefit obligation at
the beginning of the year. The change was made to provide a better estimate of
the interest cost component of net periodic benefit cost by better aligning
projected benefit cash flows with corresponding spot rates on the yield curve
rather than using a single weighted average discount rate derived from the yield
curve as had been done historically.
The Company accounted for this change as a change in estimate, and accordingly,
recognized the effect prospectively beginning in 2017. For further discussion on
full yield curve approach, see Part 2, Item 7, MD&A - Pension Plans and Other
Postretirement in The Hartford's 2018 Form 10-K Annual Report.
On June 30, 2017, the Company purchased a group annuity contract to transfer
approximately $1.6 billion of the Company's outstanding pension benefit
obligations related to certain U.S. retirees, terminated vested participants,
and beneficiaries. As a result of this transaction, in the second quarter of
2017, the Company recognized a pre-tax settlement charge of $750 ($488 net of
tax) and a reduction to stockholders' equity of $144.
In connection with this transaction, the Company made a contribution of $280 in
September 2017 to the U.S. qualified pension plan in order to maintain the
plan's pre-transaction funded status.

Dividends from Subsidiaries
Dividends to HFSG Holding Company from its insurance subsidiaries are restricted
by insurance regulation. Upon the acquisition of Navigators Group, the Company's
principal insurance subsidiaries are domiciled in États-Unis, United
Kingdom et Belgium.
The payment of dividends by Connecticut-domiciled insurers is limited under the
insurance holding company laws of Connecticut. These laws require notice to and
approval by the state insurance commissioner for the declaration or payment of
any dividend, which, together with other dividends or distributions made within
the preceding twelve months, exceeds the greater of (i) 10% of the insurer's
statutory policyholder surplus as of December 31 of the preceding year or (ii)
net income (or net gain from operations, if such company is a life insurance
company) for the twelve-month period ending on the thirty-first day of December
last preceding, in each case determined under statutory insurance accounting
principles. In addition, if any dividend of a Connecticut-domiciled insurer
exceeds the insurer's earned surplus, it requires the prior approval of the
Connecticut Insurance Commissioner.
Property casualty insurers domiciled in New York, including Navigators Insurance
Company ("NIC") and Navigators Specialty Insurance Company ("NSIC"), generally
may not, without notice to and approval by the state insurance commissioner, pay
dividends out of earned surplus in any twelve­month period that exceeds the
lesser of (i) 10% of the insurer's statutory policyholders' surplus as of the
most recent financial statement on file, or (ii) 100% of its adjusted net
investment income, as defined, for the same twelve month period. As part of the
New York state insurance commissioner's approval of the Navigators Group
acquisition, and as is common practice, any dividend from NIC and NSIC before
May 2021 will require prior approval from the state insurance commissioner.
The insurance holding company laws of the other jurisdictions in which The
Hartford's insurance subsidiaries are incorporated (or deemed commercially
domiciled) generally contain similar (although in certain instances more
restrictive) limitations on the payment of dividends. In addition to statutory
limitations on paying dividends, the Company also takes other items into
consideration when determining dividends from subsidiaries. These considerations
include, but are not limited to, expected earnings and capitalization of the
subsidiaries, regulatory capital requirements and liquidity requirements of the
individual operating company.
Corporate members of Lloyd's Syndicates may pay dividends to its parent to the
extent of available profits that have been distributed from the syndicate in
excess of the Funds at Lloyd's ("FAL") capital requirement. The FAL is
determined based on the syndicate's solvency capital requirement under the
E.U.'s Solvency II capital adequacy model, plus a Lloyd's specific economic
capital assessment.
Insurers domiciled in the United Kingdom may pay dividends to its parent out of
its statutory profits subject to restrictions imposed under U.K. Company law and
European Insurance regulation (Solvency II). Belgium domiciled insurers may only
pay dividends if, at the end of its previous fiscal year, the total amount of
its assets, as reduced by its provisions and debts, are in excess of certain
minimum capital thresholds calculated under Belgian law.

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In 2019, HFSG Holding Company received $300 of dividends from HLA, $116 from
Hartford Funds and $3 from a run-off HFSG subsidiary. In addition, HFSG Holding
Company received $50 of ordinary P&C dividends that were subsequently
contributed to a run-off P&C subsidiary. Excluding the dividends that were
subsequently contributed to a P&C subsidiary, there were no net dividends paid
by P&C subsidiaries to HFSG Holding Company in 2019.
Other Sources of Capital for the HFSG Holding Company
The Hartford endeavors to maintain a capital structure that provides financial
and operational flexibility to its insurance subsidiaries, ratings that support
its competitive position in the financial services marketplace (see the
"Ratings" section below for further discussion), and stockholder returns. Comment
result, the Company may from time to time raise capital from the issuance of
debt, common equity, preferred stock, equity-related debt or other capital
securities and is continuously evaluating strategic opportunities. The issuance
of debt, common equity, equity-related debt or other capital securities could
result in the dilution of stockholder interests or reduced net income due to
additional interest expense.
Shelf Registrations
The Hartford filed an automatic shelf registration statement with the Securities
and Exchange Commission ("the SEC") on May 17, 2019 that permits it to offer and
sell debt and equity securities during the three-year life of the registration
statement.
For further information regarding Shelf Registrations, see Note 13 - Debt of
Notes to Consolidated Financial Statements.
Revolving Credit Facilities
The Company has a senior unsecured five-year revolving credit facility (the
"Credit Facility") that provides up to $750 million of unsecured credit through
March 29, 2023. As of December 31, 2019, no borrowings were outstanding and $5
in letters of credit were issued under the Credit Facility and the Company was
in compliance with all financial covenants.
Commercial Paper
As of December 31, 2019, The Hartford's maximum borrowings available under its
commercial paper program is $750 and there was no commercial paper outstanding.
Intercompany Liquidity Agreements
The Company has $2.0 billion available under an intercompany liquidity agreement
that allows for short-term advances of funds among HFSG Holding Company and
certain affiliates of up to $2.0 billion for liquidity and other general
corporate purposes. The Connecticut Department of Insurance ("CTDOI") granted
approval for certain affiliated insurance companies that are parties to the
agreement to treat receivables from a parent, including HFSG Holding Company, as
admitted assets for statutory accounting purposes.
As of December 31, 2019, there were no amounts outstanding at HFSG Holding
Company.
Collateralized Advances with Federal Home Loan Bank of Boston
The Company's subsidiaries, Hartford Fire Insurance Company ("Hartford Fire")
and HLA, are members of the Federal Home

Loan Bank of Boston ("FHLBB"). Membership allows these subsidiaries access to
collateralized advances, which may be short- or long-term with fixed or variable
rates. Advances may be used to support general corporate purposes, which would
be presented as short- or long-term debt, or to earn incremental investment
income, which would be presented in other liabilities consistent with other
collateralized financing transactions. As of December 31, 2019, there were no
advances outstanding.
For further information regarding the Company's ability to access collateralized
advances with Federal Home Loan Bank of Boston, see Note 13 - Debt of Notes to
Consolidated Financial Statements.
Lloyd's Letter of Credit Facilities
As a result of the acquisition of Navigators Group, The Hartford has two letter
of credit facility agreements: the Club Facility and the Bilateral Facility,
which are used to provide a portion of the capital requirements at Lloyd's. Comment
of December 31, 2019, uncollateralized letters of credit with an aggregate face
amount of $165 and £60 million were outstanding under the Club Facility and £18
million was outstanding under the Bilateral Facility. As of December 31, 2019,
the Bilateral Facility has unused capacity of $1 for issuance of additional
letters of credit. Among other covenants, the Club Facility and Bilateral
Facility contain financial covenants regarding tangible net worth and FAL. As of
December 31, 2019, Navigators Group was in compliance with all financial
covenants. In November of 2019, the Company issued £11 million of letters of
credit under the Bilateral Facility.
Derivative Commitments
Certain of the Company's derivative agreements contain provisions that are tied
to the financial strength ratings, as set by nationally recognized statistical
agencies, of the individual legal entity that entered into the derivative
agreement. If the legal entity's financial strength were to fall below certain
ratings, the counterparties to the derivative agreements could demand immediate
and ongoing full collateralization and in certain instances enable the
counterparties to terminate the agreements and demand immediate settlement of
all outstanding derivative positions traded under each impacted bilateral
agreement. The settlement amount is determined by netting the derivative
positions transacted under each agreement. If the termination rights were to be
exercised by the counterparties, it could impact the legal entity's ability to
conduct hedging activities by increasing the associated costs and decreasing the
willingness of counterparties to transact with the legal entity. The aggregate
fair value of all derivative instruments with credit-risk-related contingent
features that are in a net liability position as of December 31, 2019 was $81.
For this $81, the legal entities have posted collateral of $77, in the normal
course of business. Based on derivative market values as of December 31, 2019, a
downgrade of one level below the current financial strength ratings by either
Moody's or S&P would not require additional assets to be posted as collateral.
Based on derivative market values as of December 31, 2019, a downgrade of two
levels below the current financial strength ratings by either Moody's or S&P
would require an additional $5 of assets to be posted as collateral. These
collateral amounts could change as derivative market values change, as a result
of changes in our hedging activities or to the extent changes in contractual
terms are negotiated. The nature of the additional collateral that we would
post, if required,

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would be primarily in the form of U.S.Treasury bills, U.S.Treasury notes and
government agency securities.
As of December 31, 2019, no derivative positions would be subject to immediate
termination in the event of a downgrade of one level below the current financial
strength ratings. This could change as a result of changes in our hedging
activities or to the extent changes in contractual terms are negotiated.
Insurance Operations
While subject to variability period to period, underwriting and investment cash
flows continue to be within historical norms and, therefore, the Company's
insurance operations' current liquidity position is considered to be sufficient
to meet anticipated demands over the next twelve months. For a discussion and
tabular presentation of the Company's current contractual obligations by period,
refer to Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
within the Capital Resources and Liquidity section of the MD&A.
The principal sources of operating funds are premiums, fees earned from assets
under management and investment income, while investing cash flows primarily
originate from maturities and sales of invested assets. The primary uses of
funds are to pay claims, claim adjustment expenses, commissions and other
underwriting and insurance operating costs, to pay taxes, to purchase new
investments and to make dividend payments to the HFSG Holding Company.
The Company's insurance operations consist of property and casualty insurance
products (collectively referred to as "Property & Casualty Operations") and
Group Benefits.
The Company's insurance operations hold fixed maturity securities including a
significant short-term investment position (securities with maturities of one
year or less at the time of purchase) to meet liquidity needs. Liquidity
requirements that are unable to be funded by the Company's insurance operations'
short-term investments would be satisfied with current operating funds,
including premiums or investing cash flows, which includes proceeds received
through the sale of invested assets. A sale of invested assets could result in
significant realized capital losses.
The following tables represent the fixed maturity holdings, including the
aforementioned cash and short-term investments

available to meet liquidity needs, for each of the Company's insurance
operations.
                              Property & Casualty
                                   As of
                             December 31, 2019
Fixed maturities            $            31,302
Short-term investments                    1,476
Cash                                        163
Less: Derivative collateral                  68
Total                       $            32,873


                           Group Benefits Operations
                                   As of
                             December 31, 2019
Fixed maturities            $            10,313
Short-term investments                      361
Cash                                         13
Less: Derivative collateral                  25
Total                       $            10,662



Off-balance Sheet Arrangements and Aggregate Contractual Obligations
The Company does not have any off-balance sheet arrangements that are reasonably
likely to have a material effect on the financial condition, results of
operations, liquidity, or capital resources of the Company, except for unfunded
commitments to purchase investments in limited partnerships and other
alternative investments, private placements, and mortgage loans as disclosed in
Note 14 - Commitments and Contingencies of Notes to Consolidated Financial
Statements.

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

           
           
           
           Aggregate Contractual Obligations as of December 31, 2019
                                                            Payments due by period
                                                      Less than      1-3        3-5       More than
                                           Total       1 year       years      years       5 years
Property and casualty obligations (1)    $ 28,649   $     6,953   $  7,309   $  3,441   $    10,946
Group life and disability obligations
(2)                                        10,695         1,141      3,479      1,661         4,414
Operating lease obligations (3)               285            53         85         64            83
Long-term debt obligations (4)             10,497           736        444        444         8,873
Purchase obligations (5)                    2,392         1,837        326        198            31
Other liabilities reflected on the
balance sheet (6)                             617           617          -          -             -
Total                                    $ 53,135   $    11,337   $ 11,643   $  5,808   $    24,347

(1) The following points are significant to understanding the cash flows

estimated for obligations (gross of reinsurance) under property and casualty

contracts:

• Reserves for Property & Casualty unpaid losses and loss adjustment expenses

include IBNR and case reserves. While payments due on claim reserves are

considered contractual obligations because they relate to insurance policies

issued by the Company, the ultimate amount to be paid to settle both case

reserves and IBNR is an estimate, subject to significant uncertainty. The

actual amount to be paid is not finally determined until the Company reaches

a settlement with the claimant. Final claim settlements may vary

significantly from the present estimates, particularly since many claims will

not be settled until well into the future.

• In estimating the timing of future payments by year, the Company has assumed

that its historical payment patterns will continue. However, the actual

timing of future payments could vary materially from these estimates due to,

among other things, changes in claim reporting and payment patterns and large

unanticipated settlements. In particular, there is significant uncertainty

over the claim payment patterns of asbestos and environmental claims. À

addition, the table does not include future cash flows related to the receipt

of premiums that may be used, in part, to fund loss payments.

• Under U.S. GAAP, the Company is only permitted to discount reserves for

losses and loss adjustment expenses in cases where the payment pattern and

ultimate loss costs are fixed and determinable on an individual claim basis.

For the Company, these include claim settlements with permanently disabled

claimants. As of December 31, 2019, the total property and casualty reserves

in the above table are gross of a reserve discount of $388.

• Amounts shown do not consider $5.3 billion of reinsurance and other

recoverables the Company expects to collect related to property and casualty

obligations.

(2) Estimated group life and disability obligations are based on assumptions

comparable with the Company's historical experience, modified for recent

observed trends. Due to the significance of the assumptions used, the amounts

presented could materially differ from actual results. As of December 31,

2019, the total group life and disability obligations in the above table are

gross of a reserve discount of $1.4 billion.

(3) Includes undiscounted lease payments on operating lease agreements, including

                leases that have not yet commenced. See Note 20 - Leases of Notes to
    Consolidated Financial Statements for additional discussion on lease
    commitments.

(4) Includes contractual principal and interest payments. See Note 13 – Debt of

Notes to Consolidated Financial Statements for additional discussion of

long-term debt obligations.

(5) Includes $1.3 billion in commitments to purchase investments including

approximately $852 of limited partnership and other alternative investments,

$191 of private debt and equity securities, and $215 of mortgage loans. Of

the $1.3 billion in commitments to purchase investments, $130 are related to

mortgage loan commitments which the Company can cancel unconditionally.

Outstanding commitments under these limited partnerships and mortgage loans

are included in payments due in less than 1 year since the timing of funding

these commitments cannot be reliably estimated. The remaining commitments to

purchase investments primarily represent payables for securities purchased

which are reflected on the Company's Consolidated Balance Sheets. Also

included in purchase obligations is $581 relating to contractual commitments

to purchase various goods and services such as maintenance, human resources,

                and information technology in the normal course of business. Purchase
    obligations exclude contracts that are cancelable without penalty or
    contracts that do not specify minimum levels of goods or services to be
    purchased.

(6) Includes cash collateral of $16 which the Company has accepted in connection

with the Company's derivative instruments. Since the timing of the return of

the collateral is uncertain, the return of the collateral has been included

in the payments due in less than 1 year.








Capitalization
                                          Capital Structure
                                                  December 31, 2019   December 31, 2018     Change
Short-term debt (includes current maturities of
long-term debt)                                  $             500   $             413          21 %
Long-term debt                                               4,348               4,265           2 %
Total debt                                                   4,848               4,678           4 %
Common stockholders' equity, excluding AOCI, net
of tax                                                      15,884              14,346          11 %
Preferred stock                                                334                 334           - %
AOCI, net of tax                                                52              (1,579 )      (103 %)
Total stockholders' equity                       $          16,270   $          13,101          24 %
Total capitalization                             $          21,118   $          17,779          19 %
Debt to stockholders' equity                                    30 %                36 %
Debt to capitalization                                          23 %                26 %

Total capitalization increased $3,339, or 19%, as of December 31, 2019 compared
with December 31, 2018 primarily due an increase in AOCI and net income in
excess of stockholders dividends.








For additional information on AOCI, net of tax, including unrealized capital
gains from securities, see Note 17 - Changes in and Reclassifications From
Accumulated Other Comprehensive Income (Loss), and Note 6 - Investments. Pour
additional

105
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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

information on debt, see Note 13 – Debt of Notes to Consolidated Financial
Statements.
Cash Flow (1)

                                             
                                             
                                             
                                             2019       2018       2017

Net cash provided by operating activities $ 3,489 $ 2,843 $ 2,186
Net cash used for investing activities $ (2,148 ) $ (1,962 ) $ (1,442 )
Net cash used for financing activities $ (1,191 ) $ (1,467 ) $ (979 )
Cash and restricted cash- end of year $ 262 $ 121 $ 180












(1) Cash activities in 2018 and 2017 include cash flows from Discontinued
Operations; see Note 21 - Business Dispositions and Discontinued Operations of
Notes to Consolidated Financial Statements for information on cash flows from
Discontinued Operations.
Year ended December 31, 2019 compared to the year ended December 31, 2018
Net cash provided by operating activities increased in 2019 as compared to the
prior year period, primarily due to an increase in premiums received in excess
of losses and expenses paid, including the effect of the Navigators Group
acquisition, and an AMT refund of $421, partially offset by the fact that the
2018 period included operating cash flows of the life and annuity business sold
in 2018.
Net cash used for investing activities increased primarily due to a change from
net proceeds to net payments for fixed maturities in the 2019 period, as well as
cash paid for the acquisition of Navigators Group of $1.9 billion (net of cash
acquired), partially offset by net proceeds from short term investments, equity
securities at fair value and derivatives in 2019 as opposed to net payments in
the 2018 period. Further contributing to the increase in net cash used from
investing activities were proceeds in 2018 from the sale of the life and annuity
business.
Net cash used for financing activities decreased from the 2018 period primarily
due to a decrease in cash used for net securities loaned or sold under
agreements to repurchase and an increase in proceeds from issuance of debt,
partially offset by an increase in repayments of debt in 2019, an increase in
treasury stock acquired in 2019, and a decrease in net payments for deposits,
transfers and withdrawals for investments and universal life products due to the
sale of the life and annuity business in 2018.
Operating cash flows for the year ended December 31, 2019 have been adequate to
meet liquidity requirements.
Equity Markets
For a discussion of the potential impact of the equity markets on capital and
liquidity, see the Financial Risk on Statutory Capital and Liquidity Risk
section in this MD&A.
Évaluations
Ratings are an important factor in establishing a competitive position in the
insurance marketplace and impact the Company's ability to access financing and
its cost of borrowing. There can be no assurance that the Company's ratings will
continue for any

given period of time, or that they will not be changed. In the event the
Company's ratings are downgraded, the Company's competitive position, ability to
access financing, and its cost of borrowing, may be adversely impacted.
On April 15, 2019, Standards & Poor's ("S&P") raised its issuer credit and
financial strength ratings on HLA to A+ from A. The upgrade of HLA's ratings
reflects S&P's improved view of the Company's group benefits business, which
they consider core to the Company, under their group rating methodology
criteria.
On August 30, 2019, AM Best raised its financial strength rating on Navigators
Insurance Company ("NIC") to A+ from A. The upgrade reflects the support
provided by The Hartford, as well as the importance it will play within the
overall Hartford organization, following its acquisition in May 2019.
          Insurance Financial Strength Ratings as of February 19, 2020
A.M. Le meilleur Standard & Poor's

Moody's




Hartford Fire Insurance Company                 A+            A+            

A1




Hartford Life and Accident Insurance Company     A            A+            

A2




Navigators Insurance Company                    A+             A         Not Rated
Other Ratings:
The Hartford Financial Services Group, Inc.:
Senior debt                                     a-           BBB+          Baa1
Commercial paper                               AMB-1          A-2           P-2


These ratings are not a recommendation to buy or hold any of The Hartford's
securities and they may be revised or revoked at any time at the sole discretion
of the rating organization.
The agencies consider many factors in determining the final rating of an
insurance company. One consideration is the relative level of statutory capital
and surplus (referred to collectively as "statutory capital") necessary to
support the business written and is reported in accordance with accounting
practices prescribed by the applicable state insurance department. See Part I,
Item 1A. Risk Factors - "Downgrades in our financial strength or credit ratings
may make our products less attractive, increase our cost of capital and inhibit
our ability to refinance our debt."

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Statutory Capital

               
               
               
               U.S. Statutory Capital Rollforward for the Company's Insurance Subsidiaries
                                  Property and Casualty
                               Insurance Subsidiaries (1)    Group Benefits Insurance
                                           (2)                      Subsidiary               Total
U.S. statutory capital at
January 1, 2019               $                     8,440   $              2,407       $         10,847
Statutory income                                    1,391                    513                  1,904
Contributions from (dividends
to) parent                                             46                   (300 )                 (254 )
Other items                                           331                     24                    355
Net change to U.S. statutory
capital                                             1,768                    237                  2,005
U.S. statutory capital at
December 31, 2019             $                    10,208   $              

2,644 $ 12,852

(1) The statutory capital for property and casualty insurance subsidiaries in

this table does not include the value of an intercompany note owed by

Hartford Holdings, Inc. ("HHI") to Hartford Fire Insurance Company. Excluding

the dividends that were subsequently contributed to a P&C subsidiary, there

were no net dividends paid by P&C subsidiaries to HFSG Holding Company in

2019.

(2) Excludes insurance operations in the U.K. and continental L'Europe. Though the

business was not acquired until May 23, 2019, this table includes statutory

capital and surplus of Navigators U.S. insurance subsidiaries as of both

January 1, 2019 and December 31, 2019.












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. GAAP while those costs are expensed immediately under U.S. STAT.

• Temporary differences between the book and tax basis of an asset or liability

which are recorded as deferred tax assets are evaluated for recoverability

under U.S. GAAP while these amounts are then subject to further admissibility

tests under U.S. STAT.

• The assumptions used in the determination of Group Benefits reserves (i.e.

for Group Benefits contracts) are prescribed under U.S. STAT, while the

assumptions used under U.S. GAAP are generally the Company's best estimates.

• The difference between the amortized cost and fair value of fixed maturity

and other investments, net of tax, is recorded as an increase or decrease to

the carrying value of the related asset and to equity under U.S. GAAP, while

U.S. STAT only records certain securities at fair value, such as equity

securities and certain lower rated bonds required by the NAIC to be recorded

at the lower of amortized cost or fair value.

U.S. STAT for life insurance companies like HLA establishes a formula reserve

for realized and unrealized losses due to default and equity risks associated

with certain invested assets (the Asset Valuation Reserve), while U.S. GAAP

does not. Also, for those realized gains and losses caused by changes in

interest rates, U.S. STAT for life insurance companies defers and amortizes

the gains and losses, caused by changes in interest rates, into income over

the original life to maturity of the asset sold (the Interest Maintenance

Reserve) while U.S. GAAP does not.

Goodwill arising from the acquisition of a business is tested for

recoverability on an annual basis (or more frequently, as necessary) for 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.












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. GAAP generally evaluates assets based on their
recoverability.
Risk-Based Capital
Les entreprises 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. Companies below specific
trigger points or ratios are classified within certain levels, each of which
requires specified corrective action. All of the Company's U.S. operating
insurance subsidiaries had RBC ratios in excess of the minimum levels required
by the applicable insurance regulations.
Similar to the RBC ratios that are employed by U.S. insurance regulators,
regulatory authorities in the international jurisdictions in which the Company
operates generally establish minimum solvency requirements for insurance
companies. All of the Company's international insurance subsidiaries have
capital levels in excess of the minimum levels required by the applicable
regulatory authorities.
Sensitivity
In any particular year, statutory capital amounts and RBC ratios may increase or
decrease depending upon a variety of factors. The amount of change in the
statutory capital or RBC ratios can vary based on individual factors and may be
compounded in extreme scenarios or if multiple factors occur at the same time.
At times the impact of changes in certain market factors or a combination of
multiple factors on RBC ratios can be counterintuitive. For further discussion
on these factors, see MD&A - Enterprise Risk Management, Financial Risk on
Statutory Capital.
Statutory capital at the insurance subsidiaries has been

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Part II – Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations








maintained at capital levels commensurate with the Company's desired ratings
from rating agencies. Statutory capital generated by the insurance subsidiaries
in excess of the capital level required to meet desired ratings is available for
use by the enterprise or for corporate purposes. The amount of statutory capital
can increase or decrease depending on a number of factors affecting insurance
results including, among other factors, the level of catastrophe claims
incurred, the amount of reserve development, the effect of changes in interest
rates on investment income and the discounting of loss reserves, and the effect
of realized gains and losses on investments.
Contingencies
Legal Proceedings
For a discussion regarding contingencies related to The Hartford's legal
proceedings, please see the information contained under "Litigation" and
"Asbestos and Environmental Claims," in Note 14 - Commitments and Contingencies
of the Notes to Consolidated Financial Statements and Part I, Item 3 Legal
Proceedings, which are incorporated herein by reference.
Legislative and Regulatory Developments
Patient Protection and Affordable Care Act of 2010 (the "Affordable Care Act")
It is unclear whether the Administration, Congress or the courts will seek to
reverse, amend or alter the ongoing operation of the Affordable Care Act
("ACA"). If such actions were to occur, they may have an impact on various
aspects of our business, including our insurance businesses. It is unclear what
an amended ACA would entail, and to what extent there may be a transition period
for the phase out of the ACA. The impact to The Hartford as an employer would be
consistent with other large employers. The Hartford's core business does not
involve the issuance of health insurance, and we have not observed any material
impacts on the Company's workers' compensation business or group benefits
business from the enactment of the ACA. We will continue to monitor the impact
of the ACA and any reforms on consumer, broker and medical provider behavior for
leading indicators of changes in medical costs or loss payments primarily on the
Company's workers' compensation and disability liabilities.
Tax Reform At the end of 2017, Congress passed and the president signed, the Tax
Cuts and Jobs Act of 2017 ("Tax Reform"), which enacted significant reforms to
the U.S. tax code. The major areas of interest to the company included the
reduction of the corporate tax rate from 35% to 21% and the repeal of the
corporate alternative minimum tax (AMT) and the refunding of AMT credits. The
U.S.Treasury et IRS continue to develop guidance implementing Tax Reform, and
Congress may consider additional technical corrections to the law. Tax proposals
and regulatory initiatives which have been or are being considered by Congress
and/or the U.S. Treasury Department could have a material effect on the Company
and its insurance businesses. The nature and timing of any Congressional or
regulatory action with respect to any such efforts is unclear. For additional
information on risks to the Company related to Tax Reform, please see the risk
factor entitled "Changes in federal or state tax laws could adversely affect our
business, financial condition, results of operations and liquidity" under "Risk
Factors" in Part I.

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.








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.

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