EX-99.2 3 ex992ifs063014.htm EXHIBIT

INVESTOR FINANCIAL SUPPLEMENT

June 30, 2014

 

 

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

        

		As of July 23, 2014
Address:
One Hartford Plaza				A.M. Best		Fitch¹		Standard & Poor’s		Moody’s
Hartford, CT 06155		Insurance Financial Strength Ratings:
		Hartford Fire Insurance Company		A		A+		A		A2
		Hartford Life and Accident Insurance Company		A		A		A		A3
		Hartford Life Insurance Company		A-		BBB+		BBB+		Baa2
Internet address:		Hartford Life and Annuity Insurance Company		A-		BBB+		BBB+		Baa2
http://www.thehartford.com
		Other Ratings:
		The Hartford Financial Services Group, Inc.:
		Senior debt		bbb+		BBB		BBB		Baa3
Contacts:		Commercial paper		AMB-2		F2		A-2		P-3
Sabra Purtill
Senior Vice President		¹ On July 28, 2014 Fitch Ratings announced it plans to withdraw the ratings on Hartford Financial Services, Group, Inc. and its
Investor Relations		subsidiaries on or about August 28, 2014, for commercial reasons.
Phone (860) 547-8691
Sean Rourke		TRANSFER AGENT
Assistant Vice President		Shareholder correspondence should be mailed to:		Overnight correspondence should be mailed to:
Investor Relations		Computershare		Computershare
Phone (860) 547-5688		P.O. Box 30170		211 Quality Circle, Suite 210
		College Station, TX 77842-3170		College Station, TX 77845
		Phone (877) 272-7740

COMMON STOCK

Common stock and warrants of The Hartford Financial Services Group, Inc. are traded on the New York Stock Exchange under the symbols “HIG” and "HIG/WS", respectively.

This report is for information purposes only. It should be read in conjunction with documents filed by The Hartford Financial Services Group, Inc. with the U.S. Securities and Exchange

Commission, including, without limitation, the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTOR FINANCIAL SUPPLEMENT

TABLE OF CONTENTS

CONSOLIDATED	Consolidated Financial Results	1
	Operating Results by Segment	2
	Consolidated Statements of Operations	3
	Consolidating Balance Sheets	4
	Capital Structure	5
	Statutory Capital and Surplus to GAAP Stockholders’ Equity Reconciliation	6
	Accumulated Other Comprehensive Income (Loss)	7
	Deferred Policy Acquisition Costs and Present Value of Future Profits	8
PROPERTY & CASUALTY	Property & Casualty Combined Income Statements	9
	Property & Casualty Combined Underwriting Ratios	10
	P&C Commercial Underwriting Results	11
	P&C Commercial Underwriting Ratios	12
	P&C Commercial Supplemental Data	13
	Consumer Markets Underwriting Results	14
	Consumer Markets Underwriting Ratios	15
	Consumer Markets Supplemental Data	16
	P&C Other Operations Underwriting Results	17
GROUP BENEFITS	Income Statements	18
	Supplemental Data	19
MUTUAL FUNDS	Income Statements	20
	Asset Value Rollforward - Assets Under Management By Distribution Channel	21
	Asset Value Rollforward - Assets Under Management By Asset Class	22
TALCOTT RESOLUTION	Financial Highlights	23
	U.S. Annuity Supplemental Data	24
	U.S. Annuity Account Value Rollforward	25
CORPORATE	Income Statements	26
INVESTMENTS	Investment Earnings Before Tax - Consolidated	27
	Investment Earnings Before Tax - Property & Casualty Combined	28
	Net Investment Income by Segment	29
	Components of Net Realized Capital Gains (Losses)	30
	Composition of Invested Assets	31
	Invested Asset Exposures	32
APPENDIX	Basis of Presentation and Definitions	33
	Discussion of Non-GAAP and Other Financial Measures	33

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATED FINANCIAL RESULTS

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
HIGHLIGHTS
Net income (loss)	$	(467	)	$	495		$	314		$	293		$	(190	)	$	(241	)		$	28		$	(431	)
Core earnings	$	144		$	501		$	382		$	416		$	231		$	390			$	645		$	621
Total revenues	$	4,616		$	4,612		$	4,777		$	4,862		$	4,734		$	6,300			$	9,228		$	11,034
Total assets	$	254,713		$	272,923		$	277,884		$	283,947		$	294,833		$	297,021
PER SHARE AND SHARES DATA
Basic earnings (losses) per common share
Net income (loss) available to common shareholders	$	(1.04	)	$	1.10		$	0.70		$	0.65		$	(0.42	)	$	(0.58	)		$	0.06		$	(0.99	)
Core earnings available to common shareholders	$	0.32		$	1.11		$	0.85		$	0.92		$	0.51		$	0.87			$	1.43		$	1.38
Diluted earnings (losses) per common share [1]
Net income (loss) available to common shareholders	$	(1.00	)	$	1.03		$	0.65		$	0.60		$	(0.39	)	$	(0.49	)		$	0.06		$	(0.87	)
Core earnings available to common shareholders	$	0.31		$	1.05		$	0.79		$	0.85		$	0.47		$	0.79			$	1.36		$	1.26
Weighted average common shares outstanding (basic)	450.6			449.8			451.1			452.1			451.4			436.3				450.2			443.8
Dilutive effect of stock compensation	6.3			6.2			5.1			4.6			4.2			3.9				6.2			4.0
Dilutive effect of warrants	11.0			22.6			29.9			33.9			33.4			31.7				16.9			32.6
Weighted average common shares outstanding and dilutive potential common shares (diluted), before assumed conversion of preferred shares	467.9			478.6			486.1			490.6			489.0			471.9				473.3			480.4
Weighted average common shares outstanding and dilutive potential common shares (diluted) and assumed conversion of preferred shares [2]	467.9			478.6			486.1			490.6			489.0			493.1				473.3			492.8
Common shares outstanding	450.8			452.5			453.3			448.5			453.9			435.3				450.8			453.9
Book value per common share	$	43.10		$	43.70		$	41.71		$	42.20		$	41.89		$	46.78
Per common share impact of accumulated other comprehensive income [3]	$	2.58		$	1.46		$	(0.17	)	$	(0.04	)	$	0.16		$	3.79
Book value per common share (excluding AOCI)	$	40.52		$	42.24		$	41.88		$	42.24		$	41.73		$	42.99
Book value per diluted share	$	41.70		$	41.56		$	39.14		$	38.87		$	38.59		$	42.43
Per diluted share impact of AOCI	$	2.49		$	1.39		$	(0.16	)	$	(0.04	)	$	0.15		$	3.34
Book value per diluted share (excluding AOCI)	$	39.21		$	40.17		$	39.30		$	38.91		$	38.44		$	39.09
Common shares outstanding and dilutive potential common shares	465.9			475.8			483.0			486.9			492.7			493.0
FINANCIAL RATIOS
ROE (net income (loss) last 12 months to stockholders' equity including AOCI)	3.3		%	4.5		%	0.9		%	(0.9		)%	(2.3		)%	(1.8		)%
ROE (core earnings last 12 months to stockholders' equity excluding AOCI)	7.8		%	8.0		%	7.4		%	6.4		%	6.1		%	5.9		%
Debt to capitalization, including AOCI	23.9		%	24.3		%	25.7		%	25.0		%	25.8		%	23.2		%
Annualized investment yield, after-tax	3.0		%	3.2		%	3.1		%	3.0		%	3.1		%	3.0		%		3.1		%	3.1		%

[1]	Weighted average common shares outstanding and dilutive potential common shares (diluted) are used in the calculation of diluted earnings (losses) per common share in periods of losses when the impact is dilutive to income from continuing operations, net of tax, available to common shareholders.

[2]	Includes the dilutive effect of the assumed conversion of preferred shares of 21.2 million shares and 12.4 million shares, respectively, for the three months ended March 31, 2013 and the six months ended June 30, 2013. The preferred shares converted to 21.2 million common shares in April 2013.

[3]	Accumulated other comprehensive income ("AOCI") represents after-tax unrealized gain (loss) on available-for-sale securities, other than temporary impairment losses recognized in

AOCI, net gain (loss) on cash-flow hedging instruments, foreign currency translation adjustments and pension and other postretirement adjustments.

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

OPERATING RESULTS BY SEGMENT

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Core earnings (losses):
P&C Commercial	$	213		$	264		$	229		$	176		$	198		$	224			$	477		$	422
Consumer Markets	(27		)	101			49			68			15			73				74			88
P&C Other Operations	(146		)	21			22			19			(73		)	21				(125		)	(52		)
Property & Casualty Combined	$	40		$	386		$	300		$	263		$	140		$	318			$	426		$	458
Group Benefits	52			45			55			36			37			30				97			67
Mutual Funds	21			21			20			18			20			20				42			40
Sub-total	113			452			375			317			197			368				565			565
Talcott Resolution	101			112			99			115			103			95				213			198
Corporate	(70		)	(63		)	(92		)	(16		)	(69		)	(73		)		(133		)	(142		)
CONSOLIDATED CORE EARNINGS	$	144		$	501		$	382		$	416		$	231		$	390			$	645		$	621
Add: Unlock benefit (charge), after-tax [1]	$	15		$	12		$	1		$	(104	)	$	(9	)	$	3			$	27		$	(6	)
Add: Restructuring and other costs, after-tax	(5		)	(13		)	(10		)	(10		)	(12		)	(12		)		(18		)	(24		)
Add: Income (loss) from discontinued operations, after-tax	(617		)	29			(70		)	(72		)	(423		)	(484		)		(588		)	(907		)
Add: Loss on extinguishment of debt, after-tax	—			—			—			—			—			(138		)		—			(138		)
Add: Net reinsurance gain (loss) on dispositions, after-tax	—			—			—			—			1			(25		)		—			(24		)
Add: Net realized capital gains (losses), after-tax and DAC, excluded from core earnings	(4		)	(34		)	11			63			22			25				(38		)	47
Net income (loss)	$	(467	)	$	495		$	314		$	293		$	(190	)	$	(241	)		$	28		$	(431	)

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Earned premiums	$	3,319		$	3,302		$	3,346		$	3,338		$	3,294		$	3,253			$	6,621		$	6,547
Fee income	502			496			544			538			513			510				998			1,023
Net investment income	768			824			811			787			841			825				1,592			1,666
Realized capital gains (losses):
Total other-than-temporary impairment (“OTTI”) losses	(8		)	(23		)	(15		)	(28		)	(17		)	(33		)		(31		)	(50		)
OTTI losses recognized in other comprehensive income	1			1			1			2			5			12				2			17
Net OTTI losses recognized in earnings	(7		)	(22		)	(14		)	(26		)	(12		)	(21		)		(29		)	(33		)
Net realized capital gains on business dispositions [1]	—			—			—			—			1			1,574				—			1,575
Other net realized capital gains (losses)	3			(13		)	16			157			32			91				(10		)	123
Total net realized capital gains (losses)	(4		)	(35		)	2			131			21			1,644				(39		)	1,665
Other revenues	31			25			74			68			65			68				56			133
Total revenues	4,616			4,612			4,777			4,862			4,734			6,300				9,228			11,034
Benefits, losses and loss adjustment expenses	3,023			2,576			2,703			2,764			2,922			2,659				5,599			5,581
Amortization of DAC	372			396			380			594			391			429				768			820
Insurance operating costs and other expenses	977			936			1,116			964			1,084			1,012				1,913			2,096
Loss on extinguishment of debt	—			—			—			—			—			213				—			213
Reinsurance loss on dispositions [1]	—			—			—			—			—			1,574				—			1,574
Interest expense	94			95			96			94			100			107				189			207
Total benefits, losses and expenses	4,466			4,003			4,295			4,416			4,497			5,994				8,469			10,491
Income from continuing operations before income taxes	150			609			482			446			237			306				759			543
Income tax expense	—			143			98			81			4			63				143			67
Income from continuing operations, after-tax	150			466			384			365			233			243				616			476
Income (loss) from discontinued operations, after-tax [2]	(617		)	29			(70		)	(72		)	(423		)	(484		)		(588		)	(907		)
Net income (loss)	$	(467	)	$	495		$	314		$	293		$	(190	)	$	(241	)		$	28		$	(431	)

[1]All amounts pertain to the sales of the Retirement Plans and Individual Life businesses.

[2]For further information related to the discontinued operations of the Japan and U.K. annuity businesses, refer to Talcott Resolution Financial Highlights on page 23.

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATING BALANCE SHEETS

	LIFE [1]						PROPERTY & CASUALTY [1]						CORPORATE [1]						CONSOLIDATED
	Jun 30 2014			Dec 31 2013			Jun 30 2014			Dec 31 2013			Jun 30 2014			Dec 31 2013			Jun 30 2014			Dec 31 2013
Investments
Fixed maturities, available-for-sale, at fair value	$	34,089		$	36,608		$	25,343		$	24,684		$	814		$	1,065		$	60,246		$	62,357
Fixed maturities, at fair value using the fair value option	354			824			56			20			—			—			410			844
Equity securities, trading, at fair value	12			19,745			—			—			—			—			12			19,745
Equity securities, available-for-sale, at fair value	434			450			256			292			133			126			823			868
Mortgage loans	4,048			4,172			1,538			1,426			—			—			5,586			5,598
Policy loans, at outstanding balance	1,420			1,420			—			—			—			—			1,420			1,420
Limited partnerships and other alternative investments	1,319			1,447			1,583			1,593			—			—			2,902			3,040
Other investments	207			383			108			121			14			17			329			521
Short-term investments	2,741			2,211			1,299			984			471			813			4,511			4,008
Total investments	$	44,624		$	67,260		$	30,183		$	29,120		$	1,432		$	2,021		$	76,239		$	98,401
Cash	1,330			1,237			178			189			4			2			1,512			1,428
Premiums receivable and agents’ balances	262			279			3,305			3,186			—			—			3,567			3,465
Reinsurance recoverables	20,114			20,595			2,835			2,735			—			—			22,949			23,330
DAC	1,454			1,612			572			549			—			—			2,026			2,161
Deferred income taxes	1,114			1,642			418			818			1,504			1,380			3,036			3,840
Goodwill	149			149			119			119			230			230			498			498
Property and equipment, net	174			247			624			621			9			9			807			877
Other assets	1,254			1,703			1,047			1,090			255			205			2,556			2,998
Separate account assets [2]	141,523			140,886			—			—			—			—			141,523			140,886
Total assets	$	211,998		$	235,610		$	39,281		$	38,427		$	3,434		$	3,847		$	254,713		$	277,884
Future policy benefits, unpaid losses and loss adjustment expenses	19,641			19,669			22,041			21,704			—			—			$	41,682		$	41,373
Other policyholder funds and benefits payable	33,475			39,029			—			—			—			—			33,475			39,029
Other policyholder funds and benefits payable— International variable annuities	—			19,734			—			—			—			—			—			19,734
Unearned premiums	156			177			5,192			5,049			—			(1		)	5,348			5,225
Debt	143			238			—			—			5,965			6,306			6,108			6,544
Other liabilities	3,315			3,006			1,371			1,550			2,463			1,632			7,149			6,188
Separate account liabilities	141,523			140,886			—			—			—			—			141,523			140,886
Total liabilities	$	198,253		$	222,739		$	28,604		$	28,303		$	8,428		$	7,937		$	235,285		$	258,979
Common equity, excluding AOCI	12,274			12,053			9,711			9,721			(3,719		)	(2,790		)	18,266			18,984
AOCI, after-tax	1,471			818			966			403			(1,275		)	(1,300		)	1,162			(79		)
Total stockholders’ equity	13,745			12,871			10,677			10,124			(4,994		)	(4,090		)	19,428			18,905
Total liabilities and equity	$	211,998		$	235,610		$	39,281		$	38,427		$	3,434		$	3,847		$	254,713		$	277,884

[1]	For a description of Life, Property & Casualty and Corporate, refer to the Appendix - Basis of Presentation and Definitions.

[2]	Excludes Mutual Funds assets under management ("AUM") owned by the shareholders of those funds and not by the Company.

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CAPITAL STRUCTURE

	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013
DEBT
Short-term debt	$	289		$	532		$	438		$	200		$	520		$	520
Senior notes	4,719			4,718			5,006			5,006			5,005			4,707
Junior subordinated debentures	1,100			1,100			1,100			1,100			1,100			1,100
Total debt	$	6,108		$	6,350		$	6,544		$	6,306		$	6,625		$	6,327
STOCKHOLDERS’ EQUITY
Common stockholders' equity, excluding AOCI	$	18,266		$	19,115		$	18,984		$	18,945		$	18,939		$	18,715
Preferred stock	—			—			—			—			—			556
AOCI	1,162			659			(79		)	(17		)	74			1,649
Total stockholders’ equity	$	19,428		$	19,774		$	18,905		$	18,928		$	19,013		$	20,920
CAPITALIZATION
Total capitalization, including AOCI, after tax	$	25,536		$	26,124		$	25,449		$	25,234		$	25,638		$	27,247
Total capitalization, excluding AOCI, after tax	$	24,374		$	25,465		$	25,528		$	25,251		$	25,564		$	25,598
DEBT TO CAPITALIZATION RATIOS
Total debt to capitalization, including AOCI	23.9		%	24.3		%	25.7		%	25.0		%	25.8		%	23.2		%
Total debt to capitalization, excluding AOCI	25.1		%	24.9		%	25.6		%	25.0		%	25.9		%	24.7		%
Total rating agency adjusted debt to capitalization [1] [2]	26.5		%	26.9		%	28.4		%	28.5		%	29.3		%	26.6		%

[1]

The leverage calculation reflects adjustments related to the Company’s defined benefit plans unfunded pension liability and the Company's rental expense on operating leases for total adjustments of $1.3 billion, $1.3 billion, $1.4 billion, $1.6 billion, and $1.6 billion for the three months ended June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013, respectively.

[2]	Reflects 25% equity credit for the junior subordinated debentures. Reflects 100% equity credit for preferred stock which converted to common equity on April 1, 2013.

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

STATUTORY CAPITAL AND SURPLUS TO GAAP STOCKHOLDERS’ EQUITY RECONCILIATION

 

	Jun 30 2014			[3]		Dec 31 2013			[3]
U.S. statutory net income (loss)
Property & Casualty [1]	$	547				$	1,217
Life [1] [2]	$	(333	)			$	2,144
U.S. statutory capital and surplus - Property & Casualty	$	8,069				$	8,022
U.S. GAAP adjustments:
DAC	572					549
Benefit reserves	(47		)			(48		)
Unrealized gains on investments, after tax	920					313
Goodwill	119					119
Non-admitted assets	932					973
Other, net	112					196
U.S. GAAP stockholders’ equity - Property & Casualty	$	10,677				$	10,124
U.S. statutory capital and surplus - Life	$	7,011				$	6,639
U.S. GAAP adjustments:
DAC	1,454					1,612
Deferred taxes	(46		)			573
Benefit reserves	939					(20		)
Unrealized gains on investments, after tax	2,249					937
Asset valuation reserve and interest maintenance reserve	855					787
Goodwill	149					149
Other, net	(136		)			136
Investment in foreign and non-insurance subsidiaries [4]	1,270					2,058
U.S. GAAP stockholders’ equity - Life	$	13,745				$	12,871

[1]	For a description of Property & Casualty and Life, refer to the Appendix - Basis of Presentation and Definitions on page 33.

[2]	Statutory net income (loss) does not include capital gains and losses on the mark to market effects of hedging programs that may be accounted for as realized capital gains (losses) under U.S. GAAP.

[3]	Statutory net income (loss) is for the six months ended June 30, 2014 and the year ended December 31, 2013.

[4]	Decrease since December 31, 2013 primarily due to the sale of Hartford Life KK in June 2014.

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 

	THREE MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013
Fixed maturities net unrealized gain	$	2,226		$	1,663		$	975		$	976		$	1,141		$	2,484
Equities net unrealized gain	29			23			12			12			21			45
OTTI losses recognized in AOCI	(7		)	(10		)	(12		)	(20		)	(23		)	(32		)
Net deferred gain on cash flow hedging instruments	141			121			108			167			188			320
Total net unrealized gain	$	2,389		$	1,797		$	1,083		$	1,135		$	1,327		$	2,817
Foreign currency translation adjustments	13			108			91			184			92			186
Pension and other postretirement adjustment	(1,240		)	(1,246		)	(1,253		)	(1,336		)	(1,345		)	(1,354		)
Total AOCI	$	1,162		$	659		$	(79	)	$	(17	)	$	74		$	1,649

7

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

DEFERRED POLICY ACQUISITION COSTS AND PRESENT VALUE OF FUTURE PROFITS (“DAC”)

 

	THREE MONTHS ENDED JUN 30, 2014
										Talcott Resolution
	Property and Casualty			Group Benefits			Mutual Funds			U.S. Annuity			Institutional			Consolidated
Balance, beginning of period	$	564		$	43		$	15		$	1,424		$	46		$	2,092
Deferred costs	324			6			5			5			(1		)	339
Amortization — DAC	(316		)	(7		)	(7		)	(57		)	(1		)	(388		)
Amortization — DAC unlock benefit, before tax	—			—			—			16			—			16
Adjustments to unrealized gains and losses on securities available-for-sale and other	—			(1		)	—			(33		)	1			(33		)
Balance, end of period	$	572		$	41		$	13		$	1,355		$	45		$	2,026

	SIX MONTHS ENDED JUN 30, 2014
										Talcott Resolution
	Property and Casualty			Group Benefits			Mutual Funds			U.S. Annuity			Institutional			Consolidated
Balance, beginning of period	$	549		$	41		$	19		$	1,505		$	47		$	2,161
Deferred costs	650			16			10			13			—			689
Amortization — DAC	(627		)	(16		)	(16		)	(135		)	(2		)	(796		)
Amortization — DAC unlock benefit, before tax	—			—			—			28			—			28
Adjustments to unrealized gains and losses on securities available-for-sale and other	—			—			—			(56		)	—			(56		)
Balance, end of period	$	572		$	41		$	13		$	1,355		$	45		$	2,026

8

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PROPERTY & CASUALTY COMBINED

INCOME STATEMENTS

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
UNDERWRITING RESULTS
Written premiums	$	2,574		$	2,597		$	2,349		$	2,556		$	2,501		$	2,523			$	5,171		$	5,024
Change in unearned premium reserve	69			128			(149		)	68			48			98				197			146
Earned premiums	2,505			2,469			2,498			2,488			2,453			2,425				4,974			4,878
Losses and loss adjustment expenses
Current accident year before catastrophes	1,563			1,524			1,615			1,607			1,551			1,536				3,087			3,087
Current accident year catastrophes	196			86			28			66			186			32				282			218
Prior year development [1]	249			(40		)	15			17			146			14				209			160
Total losses and loss adjustment expenses	2,008			1,570			1,658			1,690			1,883			1,582				3,578			3,465
Amortization of DAC	316			311			310			308			309			310				627			619
Underwriting expenses [2]	394			331			398			391			389			375				725			764
Dividends to policyholders	3			4			4			4			4			4				7			8
Underwriting gain (loss)	(216		)	253			128			95			(132		)	154				37			22
Net investment income	292			326			324			296			338			312				618			650
Net realized capital gains (losses)	(25		)	(37		)	72			2			(7		)	51				(62		)	44
Other expense	(37		)	(36		)	(45		)	(32		)	(34		)	(24		)		(73		)	(58		)
Income from continuing operations before income taxes	14			506			479			361			165			493				520			658
Income tax expense (benefit)	(11		)	143			133			98			27			142				132			169
Income from continuing operations, after-tax	25			363			346			263			138			351				388			489
Income (loss) from discontinued operations, after-tax	—			—			—			1			(2		)	—				—			(2		)
Net income	25			363			346			264			136			351				388			487
Less: Restructuring and other costs, after-tax	—			—			—			(1		)	—			—				—			—
Less: Income (loss) from discontinued operations, after-tax	—			—			—			1			(2		)	—				—			(2		)
Less: Net realized capital gains (losses), after-tax and DAC, excluded from core earnings	(15		)	(23		)	46			1			(2		)	33				(38		)	31
Core earnings	$	40		$	386		$	300		$	263		$	140		$	318			$	426		$	458

[1] The three months ended June 30, 2014 and 2013 include unfavorable prior year loss reserve development of $212 and $130, respectively, related to asbestos reserves, and $27 and $10, respectively, related to environmental reserves.

[2] The three months ended March 31, 2014 includes a $49 before tax reduction for New York (NY) State Workers' Compensation Board assessments.

9

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PROPERTY & CASUALTY COMBINED

UNDERWRITING RATIOS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
UNDERWRITING GAIN (LOSS)	$	(216	)	$	253		$	128		$	95		$	(132	)	$	154			$	37		$	22
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	62.4			61.7			64.7			64.6			63.2			63.3				62.1			63.3
Current accident year catastrophes	7.8			3.5			1.1			2.7			7.6			1.3				5.7			4.5
Prior year development [1]	9.9			(1.6		)	0.6			0.7			6.0			0.6				4.2			3.3
Total losses and loss adjustment expenses	80.2			63.6			66.4			67.9			76.8			65.2				71.9			71.0
Expenses [2]	28.3			26.0			28.3			28.1			28.5			28.2				27.2			28.4
Policyholder dividends	0.1			0.2			0.2			0.2			0.2			0.2				0.1			0.2
Combined ratio	108.6			89.8			94.9			96.2			105.4			93.6				99.3			99.5
Current accident year catastrophes and prior year development	17.7			1.9			1.7			3.4			13.6			1.9				9.9			7.8
Combined ratio before catastrophes and prior year development	90.9			87.9			93.2			92.8			91.8			91.8				89.4			91.8

[1] Includes 9.5 point and 5.7 point unfavorable impact related to asbestos and environmental prior year loss reserve development in the three months ended June 30, 2014 and 2013, respectively.

[2] Includes 2.0 point favorable impact related to a reduction in NY State Workers' Compensation Board assessments in the three months ended March 31, 2014.

10

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

P&C COMMERCIAL

UNDERWRITING RESULTS

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
UNDERWRITING RESULTS
Written premiums	$	1,571		$	1,669		$	1,463		$	1,567		$	1,533		$	1,645			$	3,240		$	3,178
Change in unearned premium reserve	12			128			(103		)	4			(12		)	116				140			104
Earned premiums	1,559			1,541			1,566			1,563			1,545			1,529				3,100			3,074
Losses and loss adjustment expenses
Current accident year before catastrophes	934			934			972			991			966			968				1,868			1,934
Current accident year catastrophes	35			60			7			48			44			6				95			50
Prior year development [2]	12			(7		)	12			26			37			8				5			45
Total losses and loss adjustment expenses	981			987			991			1,065			1,047			982				1,968			2,029
Amortization of DAC	230			226			226			226			226			227				456			453
Underwriting expenses [1]	254			188			247			238			243			225				442			468
Dividends to policyholders	3			4			4			4			4			4				7			8
Underwriting gain	$	91		$	136		$	98		$	30		$	25		$	91			$	227		$	116

[1]	The three months ended March 31, 2014 includes a $49 before tax reduction for NY State Workers' Compensation Board assessments. Small Commercial, Middle Market and Specialty

Commercial represent $25, $14 and $10, respectively, of the reduction.

[2]	Prior year development includes the following (favorable) unfavorable prior year loss reserve development:

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Auto liability	$	9		$	5		$	—		$	86		$	40		$	15			$	14		$	55
Professional and general liability	(11		)	(8		)	(1		)	(45		)	(40		)	(18		)		(19		)	(58		)
Workers’ compensation	5			—			(11		)	(10		)	1			18				5			19
Workers’ compensation - NY 25a Fund for Reopened Cases	—			—			—			—			80			—				—			80
Change in workers' compensation discount, including accretion	7			8			7			8			7			8				15			15
Catastrophes	(6		)	(12		)	(3		)	(12		)	(9		)	—				(18		)	(9		)
Uncollectible reinsurance	—			—			—			—			(25		)	—				—			(25		)
Other reserve re-estimates, net	8			—			20			(1		)	(17		)	(15		)		8			(32		)
Total prior year development	$	12		$	(7	)	$	12		$	26		$	37		$	8			$	5		$	45

11

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

P&C COMMERCIAL

UNDERWRITING RATIOS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
UNDERWRITING GAIN	$	91		$	136		$	98		$	30		$	25		$	91			$	227		$	116
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	59.9			60.6			62.1			63.4			62.5			63.3				60.3			62.9
Current accident year catastrophes	2.2			3.9			0.4			3.1			2.8			0.4				3.1			1.6
Prior year development [1]	0.8			(0.5		)	0.8			1.7			2.4			0.5				0.2			1.5
Total losses and loss adjustment expenses	62.9			64.0			63.3			68.1			67.8			64.2				63.5			66.0
Expenses [2]	31.0			26.9			30.2			29.7			30.4			29.6				29.0			30.0
Policyholder dividends	0.2			0.3			0.3			0.3			0.3			0.3				0.2			0.3
Combined ratio	94.2			91.2			93.7			98.1			98.4			94.0				92.7			96.2
Current accident year catastrophes and prior year development	3.0			3.4			1.2			4.8			5.2			0.9				3.3			3.1
Combined ratio before catastrophes and prior year development	91.1			87.7			92.5			93.3			93.1			93.1				89.5			93.1
COMBINED RATIOS BY LINE OF BUSINESS [3]
SMALL COMMERCIAL
Combined ratio	89.3			85.7			85.8			92.4			94.5			89.9				87.5			92.2
Combined ratio before catastrophes	85.9			83.3			85.4			89.9			91.8			88.2				84.6			90.0
Combined ratio before catastrophes and prior year development	85.4			83.7			85.9			87.1			87.6			89.2				84.6			88.4
MIDDLE MARKET
Combined ratio	97.1			96.1			97.1			102.7			101.7			91.6				96.6			96.7
Combined ratio before catastrophes	96.6			90.6			96.9			99.7			99.3			93.2				93.6			96.3
Combined ratio before catastrophes and prior year development	95.1			90.1			94.8			95.9			95.2			95.8				92.6			95.5
SPECIALTY COMMERCIAL
Combined ratio	104.1			97.3			102.4			111.0			113.8			112.6				100.6			113.2
Combined ratio before catastrophes	104.0			97.2			102.5			110.9			113.4			111.8				100.5			112.6
Combined ratio before catastrophes and prior year development	101.3			94.7			100.6			103.0			105.7			98.9				98.0			102.3

[1]For a summary of prior year loss reserve development, refer to footnote [2] on page 11.

[2]The expense ratio includes 3.2 point favorable impact related to a reduction in NY State Workers' Compensation Board assessments in the three months ended March 31, 2014.

[3]	Small Commercial, Middle Market and Specialty Commercial include a benefit of 3.3 points, 2.5 points and 4.4 points, respectively, for the NY State Workers' Compensation Board assessments

reduction in the three months ended March 31, 2014. For additional information, refer to footnote [1] on page 11.

12

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

P&C COMMERCIAL

SUPPLEMENTAL DATA

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
WRITTEN PREMIUMS
Small Commercial	$	833		$	865		$	715		$	740		$	787		$	842			$	1,698		$	1,629
Middle Market	533			566			555			570			518			546				1,099			1,064
Specialty Commercial	196			229			186			248			219			248				425			467
National Accounts	77			113			62			90			72			91				190			163
Financial Products	59			55			63			61			60			53				114			113
Programs	57			58			60			93			85			101				115			186
Other Specialty	3			3			1			4			2			3				6			5
Other	9			9			7			9			9			9				18			18
Total	$	1,571		$	1,669		$	1,463		$	1,567		$	1,533		$	1,645			$	3,240		$	3,178
EARNED PREMIUMS
Small Commercial	$	790		$	769		$	777		$	769		$	763		$	754			$	1,559		$	1,517
Middle Market	547			541			549			545			540			530				1,088			1,070
Specialty Commercial	213			223			234			240			233			236				436			469
National Accounts	82			80			79			83			70			68				162			138
Financial Products	61			59			62			61			64			63				120			127
Programs	68			81			89			92			97			102				149			199
Other Specialty	2			3			4			4			2			3				5			5
Other	9			8			6			9			9			9				17			18
Total	$	1,559		$	1,541		$	1,566		$	1,563		$	1,545		$	1,529			$	3,100		$	3,074
STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
Renewal Written Price Increases
Standard Commercial Lines	6		%	7		%	8		%	7		%	7		%	8		%		6		%	7		%
Policy Count Retention
Small Commercial	84		%	83		%	82		%	81		%	80		%	82		%		83		%	81		%
Middle Market	80		%	81		%	79		%	80		%	79		%	77		%		81		%	78		%
New Business Premium
Small Commercial	$	140		$	131		$	111		$	115		$	125		$	134			$	271		$	259
Middle Market	$	112		$	111		$	102		$	107		$	116		$	97			$	223		$	213
Policies in Force (in thousands)
Small Commercial	1,187			1,179			1,177			1,181			1,181			1,185
Middle Market	73			73			73			74			74			75

13

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSUMER MARKETS

UNDERWRITING RESULTS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
UNDERWRITING RESULTS	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Written premiums	$	1,003		$	927		$	886		$	988		$	967		$	878			$	1,930		$	1,845
Change in unearned premium reserve	57			(1		)	(45		)	63			59			(18		)		56			41
Earned premiums	946			928			931			925			908			896				1,874			1,804
Losses and loss adjustment expenses
Current accident year before catastrophes	629			590			643			616			585			568				1,219			1,153
Current accident year catastrophes	161			26			21			18			142			26				187			168
Prior year development [1]	(3		)	(34		)	—			(11		)	(32		)	4				(37		)	(28		)
Total losses and loss adjustment expenses	787			582			664			623			695			598				1,369			1,293
Amortization of DAC	86			85			84			82			83			83				171			166
Underwriting expenses	133			136			144			145			139			143				269			282
Underwriting gain (loss)	$	(60	)	$	125		$	39		$	75		$	(9	)	$	72			$	65		$	63

[1]	Prior year development includes the following (favorable) unfavorable prior year loss reserve development:

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Auto liability	$	—		$	—		$	1		$	—		$	2		$	—			$	—		$	2
Homeowners	3			(13		)	3			1			(2		)	(8		)		(10		)	(10		)
Catastrophes	(5		)	(21		)	(2		)	(8		)	(31		)	2				(26		)	(29		)
Other reserve re-estimates, net	(1		)	—			(2		)	(4		)	(1		)	10				(1		)	9
Total prior year development	$	(3	)	$	(34	)	$	—		$	(11	)	$	(32	)	$	4			$	(37	)	$	(28	)

14

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSUMER MARKETS

UNDERWRITING RATIOS

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
UNDERWRITING GAIN (LOSS)	$	(60	)	$	125		$	39		$	75		$	(9	)	$	72			$	65		$	63
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	66.5			63.6			69.1			66.6			64.4			63.4				65.0			63.9
Current accident year catastrophes	17.0			2.8			2.3			1.9			15.6			2.9				10.0			9.3
Prior year development [1]	(0.3		)	(3.7		)	—			(1.2		)	(3.5		)	0.4				(2.0		)	(1.6		)
Total losses and loss adjustment expenses	83.2			62.7			71.3			67.4			76.5			66.7				73.1			71.7
Expenses	23.2			23.8			24.5			24.5			24.4			25.2				23.5			24.8
Combined ratio	106.3			86.5			95.8			91.9			101.0			92.0				96.5			96.5
Current accident year catastrophes and prior year development	16.7			(0.9		)	2.3			0.7			12.1			3.3				8.0			7.7
Combined ratio before catastrophes and prior year development	89.6			87.4			93.6			91.1			88.9			88.6				88.5			88.7
PRODUCT
Automobile
Combined ratio	98.7			91.4			102.4			96.3			94.6			96.0				95.1			95.3
Combined ratio before catastrophes and prior year development	94.6			91.6			102.7			96.8			93.8			93.3				93.1			93.5
Homeowners
Combined ratio	123.8			75.3			78.3			81.2			115.0			82.7				99.8			99.0
Combined ratio before catastrophes and prior year development	79.6			77.4			70.6			77.6			77.9			77.9				78.5			77.9

[1]	For a summary of (favorable) unfavorable prior year loss reserve development refer to footnote [1] on page 14.

15

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSUMER MARKETS

SUPPLEMENTAL DATA

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
DISTRIBUTION
WRITTEN PREMIUMS
AARP Direct	$	734		$	669		$	632		$	725		$	718		$	647			$	1,403		$	1,365
AARP Agency	78			71			66			62			52			45				149			97
Other Agency	179			173			175			187			182			173				352			355
Other	12			14			13			14			15			13				26			28
Total	$	1,003		$	927		$	886		$	988		$	967		$	878			$	1,930		$	1,845
EARNED PREMIUMS
AARP Direct	$	689		$	678		$	684		$	682		$	673		$	662			$	1,367		$	1,335
AARP Agency	66			58			54			47			41			35				124			76
Other Agency	179			179			181			182			181			184				358			365
Other	12			13			12			14			13			15				25			28
Total	$	946		$	928		$	931		$	925		$	908		$	896			$	1,874		$	1,804
PRODUCT LINE
WRITTEN PREMIUMS
Automobile	$	680		$	660		$	608		$	668		$	657		$	629			$	1,340		$	1,286
Homeowners	323			267			278			320			310			249				590			559
Total	$	1,003		$	927		$	886		$	988		$	967		$	878			$	1,930		$	1,845
EARNED PREMIUMS
Automobile	$	650		$	636		$	640		$	637		$	626		$	619			$	1,286		$	1,245
Homeowners	296			292			291			288			282			277				588			559
Total	$	946		$	928		$	931		$	925		$	908		$	896			$	1,874		$	1,804
STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
Renewal Written Price Increases
Automobile	5		%	5		%	5		%	5		%	5		%	5		%		5		%	5		%
Homeowners	8		%	8		%	8		%	8		%	7		%	6		%		8		%	6		%
Policy Count Retention
Automobile	86		%	87		%	86		%	86		%	86		%	86		%		86		%	86		%
Homeowners	87		%	87		%	86		%	86		%	87		%	87		%		87		%	87		%
Premium Retention
Automobile	88		%	89		%	87		%	88		%	88		%	88		%		88		%	88		%
Homeowners	92		%	93		%	92		%	92		%	92		%	92		%		92		%	92		%
New Business Premium
Automobile	$	103		$	104		$	94		$	100		$	93		$	87			$	207		$	180
Homeowners	$	35		$	32		$	32		$	35		$	34		$	30			$	67		$	64
Policies in Force (in thousands)
Automobile	2,041			2,033			2,019			2,021			2,020			2,019
Homeowners	1,325			1,324			1,319			1,321			1,322			1,322

16

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

P&C OTHER OPERATIONS

UNDERWRITING RESULTS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
UNDERWRITING RESULTS
Written premiums	$	—		$	1		$	—		$	1		$	1		$	—			$	1		$	1
Change in unearned premium reserve	—			1			(1		)	1			1			—				1			1
Earned premiums	—			—			1			—			—			—				—			—
Losses and loss adjustment expenses
Prior year development [1]	240			1			3			2			141			2				241			143
Total losses and loss adjustment expenses	240			1			3			2			141			2				241			143
Underwriting expenses	7			7			7			8			7			7				14			14
Underwriting loss	$	(247	)	$	(8	)	$	(9	)	$	(10	)	$	(148	)	$	(9	)		$	(255	)	$	(157	)

[1] The three months ended June 30, 2014 and 2013 include unfavorable prior year loss reserve development of $212 and $130, respectively, related to asbestos reserves, and $27 and $10, respectively, related to environmental reserves.

17

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

GROUP BENEFITS

INCOME STATEMENTS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Earned premiums	$	761		$	784		$	821		$	817		$	823		$	812			$	1,545		$	1,635
Fee income	16			15			14			14			15			14				31			29
Net investment income	95			96			97			96			100			97				191			197
Net realized capital gains (losses)	6			8			3			(8		)	37			18				14			55
Total revenues	878			903			935			919			975			941				1,781			1,916
Benefits, losses and loss adjustment expenses	601			597			607			637			635			639				1,198			1,274
Amortization of DAC	7			9			9			8			8			8				16			16
Insurance operating costs and other expenses	195			228			239			237			248			240				423			488
Total benefits, losses and expenses	803			834			855			882			891			887				1,637			1,778
Income before income taxes	75			69			80			37			84			54				144			138
Income tax expense	20			18			22			6			23			12				38			35
Net income	55			51			58			31			61			42				106			103
Less: Net realized capital gains (losses), after tax, excluded from core earnings	3			6			3			(5		)	24			12				9			36
Core earnings	$	52		$	45		$	55		$	36		$	37		$	30			$	97		$	67
After-tax margin (excluding buyouts)
Net income	6.3		%	5.7		%	6.2		%	3.4		%	6.3		%	4.5		%		6.0		%	5.4		%
Core earnings	6.0		%	5.1		%	5.9		%	3.9		%	3.9		%	3.2		%		5.5		%	3.6		%

18

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

GROUP BENEFITS

SUPPLEMENTAL DATA

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
PREMIUMS
Fully insured ongoing premiums
Group disability	$	349		$	346		$	352		$	343		$	355		$	345			$	695		$	700
Group life [1]	371			388			428			435			427			426				759			853
Other	41			42			41			39			40			41				83			81
Total fully insured ongoing premiums	$	761		$	776		$	821		$	817		$	822		$	812			$	1,537		$	1,634
Total buyouts [2]	—			8			—			—			1			—				8			1
Total premiums	761			784			821			817			823			812				1,545			1,635
Group disability premium equivalents [3]	108			103			102			104			100			106				211			206
Total premiums and premium equivalents	$	869		$	887		$	923		$	921		$	923		$	918			$	1,756		$	1,841
SALES (GROSS ANNUALIZED NEW PREMIUMS)
Fully insured ongoing sales
Group disability	$	20		$	88		$	29		$	32		$	46		$	76			$	108		$	122
Group life	24			79			26			28			55			88				103			143
Other	1			13			3			3			2			5				14			7
Total fully insured ongoing sales	45			180			58			63			103			169				225			272
Total buyouts [2]	—			8			—			—			1			—				8			1
Total sales	45			188			58			63			104			169				233			273
Group disability premium equivalents [3]	3			25			23			5			18			15				28			33
Total sales and premium equivalents	$	48		$	213		$	81		$	68		$	122		$	184			$	261		$	306
RATIOS [4]
Loss ratio
Group disability loss ratio	83.9		%	82.4		%	75.7		%	87.9		%	82.7		%	89.9		%		83.1		%	86.2		%
Group life loss ratio	72.4		%	67.9		%	70.8		%	68.2		%	70.8		%	68.1		%		70.1		%	69.4		%
Total loss ratio	77.3		%	74.5		%	72.7		%	76.7		%	75.7		%	77.4		%		75.9		%	76.5		%
Expense ratio	26.0		%	30.0		%	29.7		%	29.5		%	30.6		%	30.0		%		28.0		%	30.3		%

[1]	Association - Financial Institution business represents $19, $44, $65, $68, $71 and $72 for the three months ended June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013,

June 30, 2013 and March 31, 2013, respectively.

[2]	Takeover of open claim liabilities and other non-recurring premium amounts.

[3]	Administrative service only fees and premium equivalent of claims under claim management.

[4]	Ratios calculated include fee income and exclude the effects of buyout premiums.

19

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

MUTUAL FUNDS

INCOME STATEMENTS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Investment management fees	$	150		$	146		$	146		$	139		$	137		$	133			$	296		$	270
Shareholder servicing fees	19			19			19			19			20			20				38			40
Other revenue	14			9			10			10			8			7				23			15
Total revenues	183			174			175			168			165			160				357			325
Sub-advisory	52			51			51			48			48			48				103			96
Employee compensation and benefits	26			25			26			24			24			25				51			49
Distribution and service	45			43			43			43			41			41				88			82
General, administrative and other	28			22			25			24			21			18				50			39
Total expenses	151			141			145			139			134			132				292			266
Income before income taxes	32			33			30			29			31			28				65			59
Income tax expense	11			12			11			10			11			10				23			21
Net income	21			21			19			19			20			18				42			38
Less: Restructuring and other costs, after-tax	—			—			—			1			(1		)	(1		)		—			(2		)
Less: Net realized capital gains (losses), after-tax, excluded from core earnings	—			—			(1		)	—			1			(1		)		—			—
Core earnings	$	21		$	21		$	20		$	18		$	20		$	20			$	42		$	40
Return on assets (bps, after-tax) [1]
Net income	8.5			8.6			8.0			8.4			8.8			8.0				8.6			8.6
Core earnings	8.5			8.6			8.5			8.0			8.8			8.9				8.6			9.1

[1]	Represents annualized earnings divided by average assets under management.

20

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

MUTUAL FUNDS

ASSET VALUE ROLL FORWARD

ASSETS UNDER MANAGEMENT BY DISTRIBUTION CHANNEL 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
RETAIL MUTUAL FUNDS [1]
Beginning balance	$	54,988		$	53,040		$	49,938		$	47,617		$	48,186		$	45,013			$	53,040		$	45,013
Sales	2,698			2,627			2,488			2,864			2,789			3,162				5,325			5,951
Redemptions	(2,619		)	(2,688		)	(2,569		)	(2,901		)	(4,075		)	(3,176		)		(5,307		)	(7,251		)
Net flows	79			(61		)	(81		)	(37		)	(1,286		)	(14		)		18			(1,300		)
Change in market value and other [2]	635			2,009			3,183			2,358			717			3,187				2,644			3,904
Ending balance	$	55,702		$	54,988		$	53,040		$	49,938		$	47,617		$	48,186			$	55,702		$	47,617
RETIREMENT MUTUAL FUNDS [3]
Beginning balance	$	18,358		$	17,878		$	16,821		$	15,991		$	17,622		$	16,598			$	17,878		$	16,598
Sales	1,212			1,065			1,067			923			937			942				2,277			1,879
Redemptions	(1,729		)	(986		)	(1,428		)	(1,531		)	(2,590		)	(1,426		)		(2,715		)	(4,016		)
Net flows	(517		)	79			(361		)	(608		)	(1,653		)	(484		)		(438		)	(2,137		)
Change in market value and other	787			401			1,418			1,438			22			1,508				1,188			1,530
Ending balance	$	18,628		$	18,358		$	17,878		$	16,821		$	15,991		$	17,622			$	18,628		$	15,991
TOTAL MUTUAL FUNDS
Beginning balance	$	73,346		$	70,918		$	66,759		$	63,608		$	65,808		$	61,611			$	70,918		$	61,611
Sales	3,910			3,692			3,555			3,787			3,726			4,104				7,602			7,830
Redemptions	(4,348		)	(3,674		)	(3,997		)	(4,432		)	(6,665		)	(4,602		)		(8,022		)	(11,267		)
Net flows	(438		)	18			(442		)	(645		)	(2,939		)	(498		)		(420		)	(3,437		)
Change in market value and other	1,422			2,410			4,601			3,796			739			4,695				3,832			5,434
Ending balance	$	74,330		$	73,346		$	70,918		$	66,759		$	63,608		$	65,808			$	74,330		$	63,608
AVERAGE MUTUAL FUNDS ASSETS UNDER MANAGEMENT	$	73,838		$	72,132		$	68,839		$	65,183		$	64,708		$	63,710			$	72,624		$	62,610
ANNUITY MUTUAL FUND ASSETS [4]	$	24,529		$	24,957		$	25,817		$	25,638		$	25,901		$	26,628			$	24,529		$	25,901
TOTAL ASSETS UNDER MANAGEMENT	$	98,859		$	98,303		$	96,735		$	92,397		$	89,509		$	92,436			$	98,859		$	89,509
AVERAGE ASSETS UNDER MANAGEMENT	$	98,581		$	97,519		$	94,566		$	90,953		$	90,973		$	90,042			$	97,797		$	88,578

[1] Includes mutual funds offered within 529 college savings plans.

[2] Includes front end loads on A share products.

[3] Consists of mutual funds offered within employee directed retirement plans.

[4] Consists of Company-sponsored mutual fund assets held in separate accounts supporting variable insurance and investment products.

21

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

MUTUAL FUNDS

ASSET VALUE ROLL FORWARD

ASSETS UNDER MANAGEMENT BY ASSET CLASS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
EQUITY
Beginning balance	$	44,489		$	42,426		$	39,057		$	36,186		$	38,453		$	35,843			$	42,426		$	35,843
Sales	1,995			1,906			1,678			1,591			1,446			1,559				3,901			3,005
Redemptions	(2,145		)	(1,819		)	(2,043		)	(2,054		)	(4,821		)	(2,951		)		(3,964		)	(7,772		)
Net flows	(150		)	87			(365		)	(463		)	(3,375		)	(1,392		)		(63		)	(4,767		)
Change in market value and other	832			1,976			3,734			3,334			1,108			4,002				2,808			5,110
Ending balance	$	45,171		$	44,489		$	42,426		$	39,057		$	36,186		$	38,453			$	45,171		$	36,186
FIXED INCOME
Beginning balance	$	14,661		$	14,632		$	14,595		$	14,944		$	15,213		$	14,524			$	14,632		$	14,524
Sales	1,241			1,134			1,255			1,507			1,432			1,755				2,375			3,187
Redemptions	(1,064		)	(1,257		)	(1,322		)	(1,802		)	(1,323		)	(1,133		)		(2,321		)	(2,456		)
Net flows	177			(123		)	(67		)	(295		)	109			622				54			731
Change in market value and other	104			152			104			(54		)	(378		)	67				256			(311		)
Ending balance	$	14,942		$	14,661		$	14,632		$	14,595		$	14,944		$	15,213			$	14,942		$	14,944
MULTI-STRATEGY INVESTMENTS [1]
Beginning balance	$	14,196		$	13,860		$	13,107		$	12,478		$	12,142		$	11,244			$	13,860		$	11,244
Sales	674			652			622			689			848			790				1,326			1,638
Redemptions	(1,139		)	(598		)	(632		)	(576		)	(521		)	(518		)		(1,737		)	(1,039		)
Net flows	(465		)	54			(10		)	113			327			272				(411		)	599
Change in market value and other	486			282			763			516			9			626				768			635
Ending balance	$	14,217		$	14,196		$	13,860		$	13,107		$	12,478		$	12,142			$	14,217		$	12,478
TOTAL MUTUAL FUNDS [2]	$	74,330		$	73,346		$	70,918		$	66,759		$	63,608		$	65,808			$	74,330		$	63,608

[1] Includes balanced, allocation, target date and alternatives.

[2] Excludes annuity mutual fund assets.

22

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

TALCOTT RESOLUTION

FINANCIAL HIGHLIGHTS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
NET INCOME (LOSS)
U.S. Annuity	$	92		$	108		$	41		$	69		$	23		$	63			$	200		$	86
Institutional and other [1] [2] [3]	(596		)	37			(56		)	(62		)	(355		)	(357		)		(559		)	(712		)
Talcott Resolution net income (loss)	(504		)	145			(15		)	7			(332		)	(294		)		(359		)	(626		)
Less: Unlock benefit (charge), after tax	15			12			1			(104		)	(9		)	3				27			(6		)
Less: Restructuring and other costs, after tax	—			—			—			(1		)	1			(1		)		—			—
Less: Loss from discontinued operations, after tax [1]	(617		)	29			(70		)	(73		)	(421		)	(484		)		(588		)	(905		)
Less: Net reinsurance gain (loss) on dispositions, after tax	—			—			—			—			1			44				—			45
Less: Net realized gains (losses) and other, after tax and DAC, excluded from core earnings	(3		)	(8		)	(45		)	70			(7		)	49				(11		)	42
Talcott Resolution core earnings	$	101		$	112		$	99		$	115		$	103		$	95			$	213		$	198
CORE EARNINGS (LOSSES)
U.S. Annuity	$	84		$	89		$	81		$	89		$	79		$	73			$	173		$	152
Institutional and other [2]	17			23			18			26			24			22				40			46
Talcott Resolution core earnings	$	101		$	112		$	99		$	115		$	103		$	95			$	213		$	198

[1]	Loss from discontinued operations, after tax includes loss on disposition and income (loss) from discontinued operations during the period. The three months ended June 30, 2014 includes

a loss on disposition of $659 related to the Japan annuity business; the three months ended June 30, 2013 includes a loss on disposition of $102 related to the U.K. variable annuity business.

[2]	Other consists of PPLI, International and residual income or tax benefits associated with the reinsurance of the policyholder and separate account liabilities of the Retirement Plans and

Individual Life businesses. The Retirement Plans and Individual Life businesses were sold in January 2013.

[3]	Includes derivative gains of $71 for the three months ended March 31, 2013 primarily associated with previously terminated derivatives associated with fixed rate bonds sold in

connection with the Retirement Plans and Individual Life business dispositions.

23

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

TALCOTT RESOLUTION

U.S. ANNUITY

SUPPLEMENTAL DATA

	THREE MONTHS ENDED													SIX MONTHS ENDED
	Jun 30 2014		Mar 31 2014		Dec 31 2013		Sept 30 2013		Jun 30 2013		Mar 31 2013			Jun 30 2014		Jun 30 2013
CORE EARNINGS - RETURN ON ASSETS (bps, after tax) [1]
U.S. annuity	49.0		50.3		45.0		49.0		42.3		38.4			49.5		40.8
FULL SURRENDER RATES [2]
U.S. variable annuity	13.9	%	12.3	%	14.5	%	20.3	%	17.5	%	14.5	%		13.0	%	16.2	%
CONTRACT COUNTS (in thousands)
U.S. variable annuity	721		747		774		802		839		873
U.S. fixed annuity and other	151		163		170		176		180		184

[1]	Represents annualized earnings divided by a two-point average of assets under management.

[2]	Represents annualized surrenders (full contract liquidation excluding partial withdrawals) divided by a two-point average of annuity account values.

	AS OF:
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013
VARIABLE ANNUITY DEATH AND LIVING BENEFITS
S&P 500 index value at end of period	1,960			1,872			1,848			1,682			1,606			1,569
Total account value with guaranteed minimum death benefits (“GMDB”)	$	58,350		$	59,547		$	61,812		$	61,512		$	62,579		$	65,500
Gross net amount of risk ("NAR")	4,024			4,192			4,325			4,657			5,195			5,349
NAR reinsured	78		%	77		%	76		%	75		%	72		%	72		%
Contracts in the Money [2]	14		%	17		%	16		%	22		%	33		%	29		%
% In the Money [2] [3]	27		%	23		%	26		%	19		%	14		%	16		%
Retained NAR [1]	891			971			1,026			1,183			1,457			1,498
Net GAAP liability	331			322			316			301			298			293
Total account value with guaranteed minimum withdrawal benefits (“GMWB”)	$	28,161		$	29,036		$	30,262		$	30,907		$	32,035		$	34,106
Gross NAR	139			163			167			228			344			361
NAR reinsured	21		%	21		%	20		%	18		%	18		%	19		%
Contracts in the Money [2]	5		%	6		%	5		%	9		%	14		%	13		%
% In the Money [2] [3]	13		%	12		%	12		%	9		%	8		%	9		%
Retained NAR [1]	110			129			134			187			282			293
Net GAAP (asset) liability	(43		)	(15		)	(3		)	158			513			651

[1]	Policies with a guaranteed living benefit also have a guaranteed death benefit. The net amount at risk (“NAR”) for each benefit is shown. These benefits are not additive. When a policy terminates due to death, any NAR related to the GMWB is released. Similarly, when a policy goes into benefit status on a GMWB, its GMDB NAR is released.

[2]	Excludes contracts that are fully reinsured.

[3]	For all contracts that are “in the money”, this represents the percentage by which the average contract was in the money.

24

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

TALCOTT RESOLUTION

U.S. ANNUITY

ACCOUNT VALUE ROLLFORWARD

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
VARIABLE ANNUITIES
Beginning balance	$	59,547		$	61,812		$	61,512		$	62,579		$	65,500		$	64,824			$	61,812		$	64,824
Deposits	58			66			60			77			180			226				124			406
Partial withdrawals	(563		)	(634		)	(748		)	(647		)	(630		)	(710		)		(1,197		)	(1,340		)
Full surrenders	(2,041		)	(1,860		)	(2,235		)	(3,153		)	(2,805		)	(2,356		)		(3,901		)	(5,161		)
Death benefits/annuitizations/other [1]	(508		)	(521		)	(470		)	(445		)	(472		)	(468		)		(1,029		)	(940		)
Transfers	(2		)	(1		)	—			(2		)	(1		)	1				(3		)	—
Net flows	(3,056		)	(2,950		)	(3,393		)	(4,170		)	(3,728		)	(3,307		)		(6,006		)	(7,035		)
Change in market value/change in reserve/interest credited and other	1,859			685			3,693			3,103			807			3,983				2,544			4,790
Ending balance	$	58,350		$	59,547		$	61,812		$	61,512		$	62,579		$	65,500			$	58,350		$	62,579
FIXED MARKET VALUE ADJUSTED (“MVA”) AND OTHER
Beginning balance	$	9,917		$	10,142		$	10,455		$	10,670		$	10,797		$	10,848			$	10,142		$	10,848
Deposits	—			—			—			—			2			6				—			8
Surrenders	(576		)	(331		)	(381		)	(264		)	(161		)	(103		)		(907		)	(264		)
Death benefits/annuitizations/other [1]	(19		)	7			(58		)	(64		)	(72		)	(74		)		(12		)	(146		)
Transfers	1			1			(2		)	(2		)	(3		)	—				2			(3		)
Net flows	(594		)	(323		)	(441		)	(330		)	(234		)	(171		)		(917		)	(405		)
Change in market value/change in reserve/interest credited and other	106			98			128			115			107			120				204			227
Ending balance	$	9,429		$	9,917		$	10,142		$	10,455		$	10,670		$	10,797			$	9,429		$	10,670
TOTAL U.S. ANNUITY
Beginning balance	$	69,464		$	71,954		$	71,967		$	73,249		$	76,297		$	75,672			$	71,954		$	75,672
Deposits	58			66			60			77			182			232				124			414
Surrenders	(3,180		)	(2,825		)	(3,364		)	(4,064		)	(3,596		)	(3,169		)		(6,005		)	(6,765		)
Death benefits/annuitizations/other [1]	(527		)	(514		)	(528		)	(509		)	(544		)	(542		)		(1,041		)	(1,086		)
Transfers	(1		)	—			(2		)	(4		)	(4		)	1				(1		)	(3		)
Net flows	(3,650		)	(3,273		)	(3,834		)	(4,500		)	(3,962		)	(3,478		)		(6,923		)	(7,440		)
Change in market value/change in reserve/interest credited and other	1,965			783			3,821			3,218			914			4,103				2,748			5,017
Ending balance	$	67,779		$	69,464		$	71,954		$	71,967		$	73,249		$	76,297			$	67,779		$	73,249

[1]	Includes transfers from the accumulation phase to the annuitization phase.

25

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CORPORATE

INCOME STATEMENTS

 

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Fee income	$	4		$	3		$	4		$	2		$	2		$	3			$	7		$	5
Net investment income	5			2			8			6			—			13				7			13
Other revenues	—			—			1			—			—			—				—			—
Net realized capital gains (losses)	14			(9		)	2			(5		)	10			(96		)		5			(86		)
Total revenues	23			(4		)	15			3			12			(80		)		19			(68		)
Insurance operating costs and other expenses [1]	20			12			34			(60		)	14			26				32			40
Loss on extinguishment of debt [2]	—			—			—			—			—			213				—			213
Reinsurance loss on dispositions [3]	—			—			—			—			—			69				—			69
Interest expense	94			95			96			94			100			107				189			207
Restructuring and other costs	8			20			15			14			19			16				28			35
Total expenses	122			127			145			48			133			431				249			564
Loss before income taxes	(99		)	(131		)	(130		)	(45		)	(121		)	(511		)		(230		)	(632		)
Income tax benefit	(35		)	(46		)	(36		)	(17		)	(46		)	(153		)		(81		)	(199		)
Net loss	(64		)	(85		)	(94		)	(28		)	(75		)	(358		)		(149		)	(433		)
Less: Restructuring and other costs, after tax	(5		)	(13		)	(10		)	(9		)	(12		)	(10		)		(18		)	(22		)
Less: Loss on extinguishment of debt, after tax [2]	—			—			—			—			—			(138		)		—			(138		)
Less: Net reinsurance loss on dispositions, after tax [3]	—			—			—			—			—			(69		)		—			(69		)
Less: Net realized capital gains (losses), after tax and DAC, excluded from core losses	11			(9		)	8			(3		)	6			(68		)		2			(62		)
Core losses	$	(70	)	$	(63	)	$	(92	)	$	(16	)	$	(69	)	$	(73	)		$	(133	)	$	(142	)

[1]	In the three months ended September 30, 2013 insurance operating costs and other expenses include a benefit of $57, before tax, for an insurance recovery from the Company's insurers

for past legal expenses associated with closed litigation and a benefit of $19, before tax, from the resolution of items under the Company's spin-off agreement with its former parent company.

[2]	In the three months ended March 31, 2013 the Company repurchased approximately $800 of outstanding senior notes and debentures. Loss on extinguishment of debt consists of the premium

associated with repurchasing the debentures at an amount greater than the face amount, the write-off of the unamortized discount and debt issuance and other costs related to the repurchase

transactions.

[3]In the three months ended March 31, 2013 reinsurance loss on dispositions consists of a reduction in goodwill related to the sale of the Retirement Plans business.

26

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT EARNINGS BEFORE TAX

CONSOLIDATED

 

	THREE MONTHS ENDED													SIX MONTHS ENDED
	Jun 30 2014		Mar 31 2014		Dec 31 2013		Sept 30 2013		Jun 30 2013		Mar 31 2013			Jun 30 2014		Jun 30 2013
Net Investment Income (Loss)
Fixed maturities [1]
Taxable	483		498		500		521		529		535			981		1,064
Tax-exempt	118		118		118		117		116		116			236		232
Total fixed maturities	601		616		618		638		645		651			1,217		1,296
Equity securities, available-for-sale	7		7		9		7		8		6			14		14
Mortgage loans	66		66		69		65		62		64			132		126
Policy loans	19		20		21		20		22		20			39		42
Limited partnerships and other alternative investments [2]	53		97		80		46		95		66			150		161
Other [3]	48		43		44		40		37		46			91		83
Subtotal	794		849		841		816		869		853			1,643		1,722
Investment expense	(26	)	(25	)	(30	)	(29	)	(28	)	(28	)		(51	)	(56	)
Total net investment income	768		824		811		787		841		825			1,592		1,666
Annualized investment yield, before tax [4]	4.3	%	4.5	%	4.4	%	4.3	%	4.6	%	4.5	%		4.4	%	4.5	%
Annualized investment yield, after-tax [4]	3.0	%	3.2	%	3.1	%	3.0	%	3.1	%	3.1	%		3.1	%	3.1	%
Annualized investment yield, before tax, excluding limited partnership and other alternative investments [4]	4.1	%	4.2	%	4.2	%	4.2	%	4.2	%	4.3	%		4.2	%	4.3	%
New money yield [5]	3.8	%	3.9	%	4.0	%	4.4	%	3.6	%	3.4	%		3.9	%	3.5	%
Sales/maturities yield [6]	3.9	%	4.2	%	3.8	%	3.9	%	3.5	%	3.6	%		4.1	%	3.5	%
Portfolio duration (in years) [7]	5.1		5.0		5.2		5.3		5.5		5.4			5.1		5.5

[1]	Includes income on short-term bonds.

[2]	Alternative investments include income on real estate joint ventures and hedge fund investments outside of limited partnerships.

[3]	Primarily represents income from derivatives that qualify for hedge accounting and are used to hedge fixed maturities.

[4]

Represents annualized net investment income divided by the monthly average invested assets at cost, amortized cost, or adjusted carrying value, as applicable, excluding repurchase agreement and dollar roll collateral and derivatives book value. Yield calculations for each period exclude assets associated with the dispositions of HLIKK, the Retirement Plans and Individual Life businesses, and the Hartford Life International Limited business, as applicable.

[5]	Represents the yield on fixed maturities and mortgage loans that were purchased during the respective period. Excludes U.S. Treasury securities and repurchase agreement and dollar roll collateral.

[6]	Represents the yield on fixed maturities and mortgage loans that were sold, matured, or redeemed, including calls and pay-downs, during the respective period. Excludes U.S. Treasury securities and repurchase agreement and dollar roll collateral.

[7]	Excludes certain short-term securities and derivative instruments related to hedging U.S. variable annuity liabilities and assets associated with the Company's former Japan annuities business.

27

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT EARNINGS BEFORE TAX

PROPERTY & CASUALTY COMBINED

	THREE MONTHS ENDED													SIX MONTHS ENDED
	Jun 30 2014		Mar 31 2014		Dec 31 2013		Sept 30 2013		Jun 30 2013		Mar 31 2013			Jun 30 2014		Jun 30 2013
Net Investment Income (Loss)
Fixed maturities [1]
Taxable	163		166		165		168		175		172			329		347
Tax-exempt	93		92		92		92		91		92			185		183
Total fixed maturities	256		258		257		260		266		264			514		530
Equity securities, available-for-sale	3		3		4		3		4		2			6		6
Mortgage loans	16		16		16		13		11		12			32		23
Limited partnerships and other alternative investments [2]	18		48		46		20		50		39			66		89
Other [3]	9		10		12		9		16		3			19		19
Subtotal	302		335		335		305		347		320			637		667
Investment expense	(10	)	(9	)	(11	)	(9	)	(9	)	(8	)		(19	)	(17	)
Total net investment income	292		326		324		296		338		312			618		650
Annualized investment yield, before tax [4]	4.1	%	4.5	%	4.5	%	4.2	%	4.8	%	4.5	%		4.3	%	4.5	%
Annualized investment yield, after-tax [4]	3.0	%	3.4	%	3.5	%	3.1	%	3.6	%	3.5	%		3.2	%	3.4	%
Annualized investment yield, before tax; excluding limited partnership and other alternative investments [4]	4.0	%	4.1	%	4.1	%	4.2	%	4.2	%	4.2	%		4.1	%	4.2	%
New money yield [5]	3.9	%	4.0	%	4.0	%	4.5	%	3.9	%	3.3	%		3.9	%	3.7	%
Sales/maturities yield [6]	4.2	%	4.3	%	4.0	%	4.4	%	3.8	%	3.8	%		4.2	%	3.8	%
Portfolio duration (in years)	4.6		4.5		5.3		5.4		5.5		5.3			4.6		5.5

[1]	Includes income on short-term bonds.

[2]	Alternative investments include income on real estate joint ventures and hedge fund investments outside of limited partnerships.

[3]	Primarily represents income from derivatives that hedge fixed maturities and qualify for hedge accounting.

[4]	Represents annualized net investment income divided by the monthly average invested assets at cost, amortized cost, or adjusted carrying value, as applicable, excluding repurchase

agreement and dollar roll collateral and derivatives book value.

[5]	Represents the yield on fixed maturities and mortgage loans that were purchased during the respective period. Excludes U.S. Treasury securities and repurchase agreement and dollar roll collateral.

[6]	Represents the yield on fixed maturities and mortgage loans that were sold, matured, or redeemed, including calls and pay-downs, during the respective period. Excludes U.S. Treasury securities and repurchase agreement and dollar roll collateral.

28

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NET INVESTMENT INCOME BY SEGMENT

CONSOLIDATED

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Net Investment Income (Loss)
Commercial Markets	$	230		$	256		$	252		$	230		$	262		$	240			$	486		$	502
Consumer Markets	31			35			36			33			39			37				66			76
P&C Other Operations	31			35			36			33			37			35				66			72
Total Property & Casualty	292			326			324			296			338			312				618			650
Group Benefits	95			96			97			96			100			97				191			197
Talcott Resolution	376			400			382			389			403			403				776			806
Corporate	5			2			8			6			—			13				7			13
Total net investment income	$	768		$	824		$	811		$	787		$	841		$	825			$	1,592		$	1,666

29

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)

CONSOLIDATED

	THREE MONTHS ENDED																			SIX MONTHS ENDED
	Jun 30 2014			Mar 31 2014			Dec 31 2013			Sept 30 2013			Jun 30 2013			Mar 31 2013				Jun 30 2014			Jun 30 2013
Net Realized Capital Gains (Losses)
Gross gains on sales [1]	$	122		$	183		$	292		$	105		$	207		$	1,709			305			1,916
Gross losses on sales	(33		)	(129		)	(333		)	(137		)	(117		)	(72		)		(162		)	(189		)
Net impairment losses	(7		)	(22		)	(14		)	(26		)	(12		)	(21		)		(29		)	(33		)
Valuation allowances on mortgage loans	(3		)	—			(1		)	—			—			—				(3		)	—
Periodic net coupon settlements on credit derivatives [2]	2			(1		)	(3		)	(1		)	—			(4		)		1			(4		)
Results of variable annuity hedge program
GMWB derivatives, net	(6		)	15			43			203			(31		)	47				9			16
Macro hedge	(15		)	(10		)	(52		)	(50		)	(47		)	(85		)		(25		)	(132		)
Total results of variable annuity hedge program	(21		)	5			(9		)	153			(78		)	(38		)		(16		)	(116		)
Other net gain (loss) [3]	(64		)	(71		)	70			37			21			70				(135		)	91
Total net realized capital gains (losses)	$	(4	)	$	(35	)	$	2		$	131		$	21		$	1,644			$	(39	)	$	1,665
Less: Realized gain on dispositions, before tax	—			—			—			—			1			1,574				—			1,575
Less: Realized gains (losses), included in core earnings, before tax	7			—			(2		)	1			3			(3		)		7			—
Total net realized capital gains (losses) and other, before tax and DAC, excluded from core earnings (losses)	(11		)	(35		)	4			130			17			73				(46		)	90
Less: Impacts of DAC	(1		)	16			(10		)	28			(6		)	22				15			16
Less: Impacts of tax	(6		)	(17		)	3			39			1			26				(23		)	27
Total net realized capital gains (losses), net of tax and DAC, excluded from core earnings (losses)	$	(4	)	$	(34	)	$	11		$	63		$	22		$	25			$	(38	)	$	47

[1]	Includes $1.5 billion of gains for the three months ended March 31, 2013 relating to the sales of the Retirement Plans and Individual Life businesses.

[2]	Included in core earnings.

[3]	Primarily consists of changes in value of non-qualifying derivatives including interest rate derivatives used to manage duration and the Japan 3Win fixed payout annuity hedge. Includes $71 of derivative gains relating to the sales of the Retirement Plans and Individual Life businesses for the three months ended March 31, 2013.

30

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPOSITION OF INVESTED ASSETS

CONSOLIDATED

	Jun 30 2014					Mar 31 2014					Dec 31 2013					Sept 30 2013					Jun 30 2013
	Amount [1]			Percent		Amount [1]			Percent		Amount [1]			Percent		Amount [1]			Percent		Amount [1]			Percent
Total investments	$	76,239		100.0	%	$	97,084		100.0	%	$	98,401		100.0	%	$	103,064		100.0	%	$	105,520		100.0	%
Less: Equity securities, trading	12			—	%	17,418			17.9	%	19,745			20.1	%	22,343			21.7	%	23,362			22.1	%
Total investments excluding trading securities	$	76,227		100.0	%	$	79,666		82.1	%	$	78,656		79.9	%	$	80,721		78.3	%	$	82,158		77.9	%
Asset-backed securities	$	2,309		3.8	%	$	2,252		3.6	%	$	2,365		3.8	%	$	2,362		3.7	%	$	2,453		3.8	%
Collateralized debt obligations	2,434			4.0	%	2,394			3.8	%	2,387			3.8	%	2,550			4.0	%	2,623			4.0	%
Commercial mortgage-backed securities	4,696			7.8	%	4,568			7.2	%	4,446			7.1	%	4,489			7.0	%	4,733			7.3	%
Corporate	28,668			47.7	%	29,040			45.8	%	28,490			45.7	%	28,770			45.0	%	29,666			45.7	%
Foreign government/government agencies	1,707			2.8	%	4,050			6.4	%	4,104			6.6	%	3,968			6.2	%	3,825			5.9	%
Municipal	12,713			21.1	%	12,682			20.0	%	12,173			19.5	%	12,543			19.6	%	12,569			19.4	%
Residential mortgage-backed securities	4,426			7.3	%	4,556			7.2	%	4,647			7.5	%	5,086			7.9	%	5,167			8.0	%
U.S. Treasuries	3,293			5.5	%	3,797			6.0	%	3,745			6.0	%	4,255			6.6	%	3,845			5.9	%
Total fixed maturities, available-for-sale	$	60,246		100.0	%	$	63,339		100.0	%	$	62,357		100.0	%	$	64,023		100.0	%	$	64,881		100.0	%
U.S. government/government agencies	$	7,569		12.6	%	$	8,194		12.9	%	$	8,208		13.2	%	$	8,923		13.9	%	$	8,588		13.2	%
AAA	6,731			11.2	%	6,410			10.1	%	6,376			10.2	%	6,377			10.0	%	6,638			10.2	%
AA	10,458			17.4	%	12,930			20.4	%	12,273			19.7	%	12,923			20.2	%	13,273			20.5	%
A	16,437			27.3	%	16,084			25.4	%	15,498			24.9	%	15,412			24.1	%	15,514			23.9	%
BBB	15,402			25.4	%	16,006			25.3	%	16,087			25.7	%	16,187			25.2	%	16,570			25.6	%
BB & below	3,649			6.1	%	3,715			5.9	%	3,915			6.3	%	4,201			6.6	%	4,298			6.6	%
Total fixed maturities, available-for-sale	$	60,246		100.0	%	$	63,339		100.0	%	$	62,357		100.0	%	$	64,023		100.0	%	$	64,881		100.0	%

[1]	Amount represents the value at which the assets are presented on the Consolidating Balance Sheets. Consolidating Balance Sheets are presented on page 4.

31

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTED ASSET EXPOSURES

	As of Jun 30, 2014
	Cost or Amortized Cost			Fair Value			Percent of Total Invested Assets [1]
Top Ten Corporate and Equity, Available-for-sale, Exposures by Sector
Financial Services	$	5,384		$	5,718		7.5	%
Utilities	4,488			4,945			6.5	%
Consumer non-cyclical	3,470			3,833			5.0	%
Energy	3,411			3,782			5.0	%
Technology and communications	3,197			3,559			4.7	%
Basic Industry	2,363			2,528			3.3	%
Capital goods	1,933			2,139			2.8	%
Consumer cyclical	1,674			1,804			2.4	%
Transportation	891			974			1.3	%
Other	191			209			0.3	%
Total	$	27,002		$	29,491		38.8	%
Top Ten Exposures by Issuer [2]
JP Morgan Money Market Fund	$	362		$	362		0.5	%
State of Illinois	293			308			0.4	%
Goldman Sachs Group Inc.	272			296			0.4	%
HSBC Holdings PLC	266			281			0.4	%
JP Morgan Chase & Co.	285			277			0.4	%
State of California	241			275			0.4	%
Morgan Stanley Institutional Liquidity Funds	275			275			0.4	%
National Grid PLC	240			274			0.4	%
Commonwealth of Massachusetts	240			267			0.4	%
Bank of America Corp.	244			250			0.3	%
Total	$	2,718		$	2,865		4.0	%

[1]	Excludes equity securities, trading.

[2]	Excludes U.S. government and government agency securities, mortgage obligations issued by government sponsored agencies, cash equivalent securities, exposures resulting

from derivative transactions and equity securities, trading.

[3]	These securities are included in short-term investments, fixed maturities, AFS, and fixed maturities, fair value option on the Company’s Consolidating Balance Sheets.

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THE HARTFORD FINANCIAL SERVICES GROUP, INC.

APPENDIX

BASIS OF PRESENTATION AND DEFINITIONS

All amounts are in millions, except for per share and ratio information unless otherwise stated. Amounts presented throughout this document have been rounded for presentation purposes.

The Hartford Financial Services Group, Inc. (the "Company", "we", or "our") currently conducts business principally in six reporting segments, Property & Casualty Commercial, Consumer Markets, Property & Casualty Other Operations, Group Benefits, Mutual Funds and Talcott Resolution, as well as a Corporate category. On June 30, 2014, the Company completed the sale of Hartford Life Insurance KK, a Japanese company ("HLIKK"). HLIKK sold variable and fixed annuities in Japan from 2001 to 2009 and has been in runoff since 2009. The results of operations of the Company's Japan business have been retrospectively reclassified from continuing operations and included as a discontinued operation in the Company's results of operations for all periods presented herein.

The consolidating balance sheets and certain balance sheet measures incorporated herein are presented as follows: Life consists of Talcott Resolution, Mutual Funds, Group Benefits, and an Other category. Property & Casualty ("P&C") consists of P&C Commercial, Consumer Markets and P&C Other Operations. Corporate consists of the Corporate category.

Property & Casualty is organized into three reporting segments; P&C Commercial, Consumer Markets and P&C Other Operations ("Property & Casualty Combined"). P&C Commercial provides workers' compensation, property, automobile, liability and umbrella coverages under several different products, primarily throughout the United States (“U.S.”), within its standard commercial lines, which consists of the Company's small commercial and middle market lines of business. Additionally, a variety of customized insurance products and risk management services including workers' compensation, automobile, general liability, professional liability, fidelity, surety, livestock and specialty casualty coverages are offered through the segment's specialty lines. Consumer Markets provides standard automobile, homeowners and home-based business coverages to individuals across the U.S., including a special program designed exclusively for members of AARP. P&C Other Operations includes certain property and casualty operations, currently managed by the Company, that have discontinued writing new business and substantially all of the Company's asbestos and environmental exposures.

Group Benefits provides employers, associations, affinity groups and financial institutions with group life, accident and disability coverage, along with other products and services, including voluntary benefits and group retiree health.

Mutual Funds offers mutual funds for retail accounts such as retirement plans and 529 college savings plans and provides investment-management and administrative services such as product design, implementation and oversight.

Talcott Resolution is comprised of runoff business from the Company's U.S. annuity, the retained Japan fixed payout annuity liabilities, and institutional and private-placement life insurance businesses, as well as the Japan business sold in June 2014, the Retirement Plans and Individual Life businesses sold in January 2013, and the U.K. variable annuity business sold in December 2013.

Corporate includes the Company's debt financing and related interest expense, as well as other capital raising activities, certain purchase accounting adjustments and other charges not allocated to the segments.

Certain operating and statistical measures have been incorporated herein to provide supplemental data that indicate current trends in the Company's business. These measures include sales, deposits, net flows, account value, insurance in-force, premium retention, renewal written price increases and policy count retention. Premium retention is defined as renewal premium written in the current period divided by total premium written in the prior period. Renewal written price increases represent the combined effect of rate changes and amount of insurance per unit of exposure since the prior year. Policy count retention represents the ratio of the number of policies renewed during the period divided by the number of policies from the previous policy term period.

The Company, along with others in the property and casualty insurance industry, uses underwriting ratios as measures of performance. The loss and loss adjustment expense ratio is the ratio of losses and loss adjustment expenses to earned premiums. The expense ratio is the ratio of underwriting expenses (amortization of deferred policy acquisition costs, as well as other underwriting expenses) to earned premiums. The policyholder dividend ratio is the ratio of policyholder dividends to earned premiums. The combined ratio is the sum of the loss and loss adjustment expense ratio, the expense ratio and the policyholder dividend ratio. These ratios are relative measurements that describe the related cost of losses and expenses for every $100 of earned premiums. A combined ratio below 100 demonstrates underwriting profit; a combined ratio above 100 demonstrates underwriting losses. The catastrophe ratio (a component of the loss ratio) represents the ratio of catastrophe losses to earned premiums.

The Company, along with others in the life insurance industry, uses underwriting ratios as measures of the Group Benefits segment's performance. The loss ratio is the ratio of total benefits, losses and loss adjustment expenses, excluding buyouts, to total premiums and other considerations excluding buyout premiums. The expense ratio is the ratio of insurance operating costs and other expenses to total premiums and other considerations excluding buyout premiums.

DISCUSSION OF NON-GAAP AND OTHER FINANCIAL MEASURES

The Company uses non-GAAP and other financial measures in this Investor Financial Supplement to assist investors in analyzing the Company's operating performance for the periods presented herein. Because the Company's calculation of these measures may differ from similar measures used by other companies, investors should be careful when comparing the Company's non-GAAP and other financial measures to those of other companies.

The Company uses the non-GAAP financial measure core earnings as an important measure of the Company's operating performance. We believe that core earnings provides investors with a valuable measure of the performance of the Company's ongoing businesses because it reveals trends in our insurance and financial services businesses that may be obscured by including the net effect of certain realized capital gains and losses, discontinued operations, loss on extinguishment of debt, gains and losses from disposal of businesses, certain restructuring charges and the impact of Unlocks to deferred policy acquisition costs (“DAC”), sales inducement assets ("SIA"), unearned revenue reserve ("URR") and death and other insurance benefit reserve balances. Some realized capital gains and losses are primarily driven by investment decisions and external economic developments, the nature and timing of which are unrelated to the insurance and underwriting aspects of our business. Accordingly, core earnings excludes the effect of all realized gains and losses (after tax and the effects of DAC) that tend to be highly variable from period to period based on capital market conditions. We believe, however, that some realized capital gains and losses are integrally related to our insurance operations, so core earnings includes net realized gains and losses such as net periodic settlements on credit derivatives. These net realized gains and losses are directly related to an offsetting item included in the income statement such as net investment income. Net income is the most directly comparable GAAP measure. Core earnings should not be considered as a substitute for net income and does not reflect the overall profitability of the Company's business. Therefore, we believe that it is useful for investors to evaluate both net income and core earnings when reviewing the Company's performance. A reconciliation of core earnings to net income (loss) for the periods presented herein is set forth on page 2.

Core earnings per share is calculated based on the non-GAAP financial measure core earnings. We believe that the measure core earnings per share provides investors with a valuable measure of the Company's operating performance for many of the same reasons applicable to its underlying measure, core earnings. Net income per share is the most directly comparable GAAP measure. Core earnings per share should not be considered as a substitute for net income per share and does not reflect the overall profitability of the Company's business. Therefore, we believe that it is useful for investors to evaluate both net income per share and core earnings per share when reviewing our performance.

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Book value per common share excluding AOCI is calculated based upon a non-GAAP financial measure. It is calculated by dividing (a) common stockholders' equity, excluding AOCI, after tax, by (b) common shares outstanding. The Company provides book value per common share excluding AOCI to enable investors to analyze the amount of the Company's net worth that is primarily attributable to the Company's business operations. We believe book value per common share, excluding AOCI, is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates. Book value per common share is the most directly comparable GAAP measure. A reconciliation of book value per common share to book value per common share, excluding AOCI, for the periods presented herein is set forth at page 1.

Book value per diluted share, excluding AOCI, is calculated based upon a non-GAAP financial measure. It is calculated by dividing (a) total stockholders' equity, excluding AOCI, after tax, by (b) common shares outstanding and dilutive potential common shares. The Company provides book value per diluted share excluding AOCI to enable investors to analyze the amount of the Company's net worth that is primarily attributable to the Company's business operations. We believe book value per diluted share, excluding AOCI, is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates. Book value per diluted share is the most directly comparable GAAP measure. A reconciliation of book value per diluted share to book value per diluted share, excluding AOCI, for the periods presented herein is set forth at page 1.

The Company provides different measures of the return on common equity (“ROE”). ROE (core earnings last twelve months to common equity, excluding AOCI), is calculated based on non-GAAP financial measures. ROE (core earnings last twelve months to common equity, excluding AOCI) is calculated by dividing (a) core earnings for the prior four fiscal quarters by (b) average common stockholders' equity, excluding AOCI. When calculating ROE, the Mandatory Convertible preferred stock (“MCP”) is included in average common stockholders' equity and MCP dividends are added back to net income (loss) available to common shareholders and core earnings (losses) available to common shareholders. The Company provides to investors return-on-equity measures based on its non-GAAP core earnings financial measures for the reasons set forth in the related discussion above. The Company excludes AOCI in the calculation of these return-on-equity measures to provide investors with a measure of how effectively the Company is investing the portion of the Company's net worth that is primarily attributable to the Company's business operations. ROE (net income last twelve months to common equity, including AOCI) is the most directly comparable GAAP measure.

Written premiums is a statutory accounting financial measure used by the Company as an important indicator of the operating performance of the Company's P&C Commercial and Consumer Markets operations. Because written premiums represents the amount of premium charged for policies issued, net of reinsurance, during a fiscal period, the Company believes it is useful to investors because it reflects current trends in the Company's sale of property and casualty insurance products. Earned premiums, the most directly comparable GAAP measure, represents all premiums that are recognized as revenues during a fiscal period. The difference between written premiums and earned premiums is attributable to the change in unearned premium reserves. A reconciliation of written premiums to earned premiums for P&C Commercial and Consumer Markets is set forth herein on pages 12 and 15, respectively.

The Company's management evaluates profitability of the P&C businesses primarily on the basis of underwriting gain (loss). Underwriting gain (loss) is a before tax measure that represents earned premiums less incurred losses, loss adjustment expenses and underwriting expenses. Underwriting gain (loss) is influenced significantly by earned premium growth and the adequacy of the Company's pricing. Underwriting profitability over time is also 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 and its ability to manage its expense ratio, which it accomplishes through economies of scale and its management of acquisition costs and other underwriting expenses. We believe that underwriting gain (loss) provides investors with a valuable measure of before tax profitability derived from underwriting activities, which are managed separately from the Company's investing activities.

A catastrophe is a severe loss, resulting from natural or manmade events, including risks such as fire, earthquake, windstorm, explosion, terrorist attack and similar events. Each catastrophe has unique characteristics. Catastrophes are not predictable as to timing or loss amount in advance, and therefore their effects are not included in earnings or losses and loss adjustment expense reserves prior to occurrence. The Company believes that a discussion of the effect of catastrophes is meaningful for investors to understand the variability of periodic earnings.

After-tax margin, excluding buyouts and realized gains (losses), is a non-GAAP financial measure that the Company uses to evaluate, and believes is an important measure of, the Group Benefits segment's operating performance. After-tax margin is the most directly comparable U.S. GAAP measure. We believe that after-tax margin, excluding buyouts and realized gains (losses), provides investors with a valuable measure of the performance of certain of the Company's on-going businesses because it reveals trends in those businesses that may be obscured by the effect of realized gains (losses). After-tax margin, excluding buyouts and realized gains (losses), should not be considered as a substitute for after-tax margin and does not reflect the overall profitability of our businesses. Therefore, we believe it is important for investors to evaluate both after-tax margin, excluding buyouts and realized gains (losses), and after-tax margin when reviewing the Company's performance. After-tax margin, excluding buyouts and realized gains (losses) is calculated by dividing core earnings excluding buyouts and realized gains (losses) by total core revenues excluding buyouts and realized gains (losses).

ROA, core earnings is a non-GAAP financial measure that the Company uses to evaluate the Mutual Funds and Talcott Resolution segments' operating performance. ROA is the most directly comparable U.S. GAAP measure. We believe that ROA, core earnings, provides investors with a valuable measure of the performance of these businesses because it reveals trends in our businesses that may be obscured by the effect of realized gains (losses). ROA, core earnings, should not be considered as a substitute for ROA and does not reflect the overall profitability of our businesses. Therefore, we believe it is important for investors to evaluate both ROA, core earnings, and ROA when reviewing the Company's performance.

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