EX-99.2 3 ex992ifs093016.htm EXHIBIT 99.2

INVESTOR FINANCIAL SUPPLEMENT

September 30, 2016

 

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

        

		As of October 25, 2016
Address:
One Hartford Plaza				A.M. Best		Standard & Poor’s		Moody’s
Hartford, CT 06155		Insurance Financial Strength Ratings:
		Hartford Fire Insurance Company		A+		A+		A1
		Hartford Life and Accident Insurance Company		A		A		A2
		Hartford Life Insurance Company		A-		BBB+		Baa2
Internet address:		Hartford Life and Annuity Insurance Company		A-		BBB+		Baa2
http://www.thehartford.com
		Other Ratings:
		The Hartford Financial Services Group, Inc.:
		Senior debt		a-		BBB+		Baa2
Contacts:		Commercial paper		AMB-1		A-2		P-2
Sabra Purtill
Senior Vice President
Investor Relations
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.

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTOR FINANCIAL SUPPLEMENT

TABLE OF CONTENTS

CONSOLIDATED	Consolidated Financial Results	1
	Consolidated Statements of Operations	2
	Operating Results by Segment	3
	Consolidating Balance Sheets	4
	Capital Structure	5
	Statutory Capital and Surplus to GAAP Stockholders’ Equity Reconciliation	6
	Accumulated Other Comprehensive Income (Loss)	7
PROPERTY & CASUALTY	Property & Casualty Income Statements	8
	Property & Casualty Underwriting Ratios and Results	9
	Commercial Lines Income Statements	10
	Commercial Lines Underwriting Ratios	12
	Commercial Lines Supplemental Data	13
	Personal Lines Income Statements	14
	Personal Lines Underwriting Ratios	15
	Personal Lines Supplemental Data	16
	P&C Other Operations Income Statements	18
GROUP BENEFITS	Income Statements	19
	Supplemental Data	20
MUTUAL FUNDS	Income Statements	21
	Asset Value Rollforward - Assets Under Management By Asset Class	22
TALCOTT RESOLUTION	Financial Highlights	23
	Individual Annuity - Supplemental Data	24
	Individual Annuity - Account Value Rollforward	25
CORPORATE	Income Statements	26
INVESTMENTS	Investment Earnings Before Tax - Consolidated	27
	Investment Earnings Before Tax - Property & Casualty	28
	Net Investment Income	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

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATED FINANCIAL RESULTS

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
HIGHLIGHTS
Net income	$	438		$	216		$	323		$	421		$	381		$	413		$	467			$	977		$	1,261
Core earnings *	$	413		$	122		$	385		$	445		$	364		$	389		$	452			$	920		$	1,205
Total revenues	$	4,695		$	4,677		$	4,391		$	4,513		$	4,562		$	4,685		$	4,617			$	13,763		$	13,864
Total assets	$228,430			$227,616			$227,493			$228,348			$231,453			$241,020			$246,960
PER SHARE AND SHARES DATA
Basic earnings per common share
Net income	$	1.14		$	0.55		$	0.81		$	1.03		$	0.92		$	0.99		$	1.11			$	2.50		$	3.01
Core earnings *	$	1.08		$	0.31		$	0.97		$	1.09		$	0.88		$	0.93		$	1.07			$	2.35		$	2.88
Diluted earnings per common share
Net income	$	1.12		$	0.54		$	0.79		$	1.01		$	0.90		$	0.96		$	1.08			$	2.45		$	2.94
Core earnings *	$	1.06		$	0.31		$	0.95		$	1.07		$	0.86		$	0.91		$	1.04			$	2.31		$	2.81
Weighted average common shares outstanding (basic)	383.8			391.8			398.5			406.9			413.8			418.7			422.6				391.4			418.4
Dilutive effect of stock compensation	3.2			3.2			4.2			5.2			5.1			4.4			5.5				3.5			5.0
Dilutive effect of warrants	3.5			3.6			3.6			3.8			4.1			5.0			5.6				3.6			4.9
Weighted average common shares outstanding and dilutive potential common shares (diluted)	390.5			398.6			406.3			415.9			423.0			428.1			433.7				398.5			428.3
Common shares outstanding	379.6			387.9			395.6			401.8			411.3			416.3			421.4
Book value per common share	$	49.15		$	47.84		$	45.78		$	43.91		$	44.26		$	43.78		$	45.27
Per common share impact of accumulated other comprehensive income [1]	$	2.60		$	2.32		$	0.64		$	(0.82	)	$	0.34		$	0.45		$	2.73
Book value per common share (excluding AOCI) *	$	46.55		$	45.52		$	45.14		$	44.73		$	43.92		$	43.33		$	42.54
Book value per diluted share	$	48.30		$	47.02		$	44.90		$	42.96		$	43.32		$	42.86		$	44.13
Per diluted share impact of AOCI	$	2.56		$	2.28		$	0.63		$	(0.80	)	$	0.33		$	0.45		$	2.66
Book value per diluted share (excluding AOCI) *	$	45.74		$	44.74		$	44.27		$	43.76		$	42.99		$	42.41		$	41.47
Common shares outstanding and dilutive potential common shares	386.3			394.7			403.4			410.7			420.2			425.3			432.3
RETURN ON EQUITY ("ROE") [3]
ROE - Net income (net income last 12 months to stockholders' equity including AOCI)	7.6		%	7.3		%	8.3		%	9.3		%	8.9		%	8.8		%	4.0		%
ROE - Net income, excluding Talcott Resolution [2]	10.8		%	10.5		%	11.0		%	12.0		%	10.3		%	11.3		%	9.3		%
ROE - Core earnings (core earnings last 12 months to stockholders' equity excluding AOCI) *	7.6		%	7.4		%	8.8		%	9.2		%	9.1		%	9.6		%	8.1		%
ROE - Core earnings, excluding Talcott Resolution * [2]	9.1		%	8.9		%	10.3		%	10.9		%	10.5		%	11.9		%	9.9		%

[1]	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.

[2]	ROE assumes debt and interest is attributed to Talcott Resolution consistent with the overall debt to capitalization ratios of the consolidated entity. For further information, see Appendix, page 33.

[3]	For reconciliations of Consolidated ROE - Net income and Consolidated ROE - Core earnings, see Appendix, page 34.

* Denotes financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP).

1

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Earned premiums	$	3,484		$	3,444		$	3,404		$	3,460		$	3,404		$	3,391		$	3,322			$	10,332		$	10,117
Fee income	432			422			426			463			448			469			459				1,280			1,376
Net investment income	772			735			696			695			730			796			809				2,203			2,335
Realized capital gains (losses):
Total other-than-temporary impairment (“OTTI”) losses	(15		)	(8		)	(27		)	(41		)	(42		)	(13		)	(12		)		(50		)	(67		)
OTTI losses recognized in other comprehensive income	1			1			4			2			2			2			—				6			4
Net OTTI losses recognized in earnings	(14		)	(7		)	(23		)	(39		)	(40		)	(11		)	(12		)		(44		)	(63		)
Other net realized capital gains (losses) [1]	(3		)	60			(132		)	(87		)	(4		)	20			17				(75		)	33
Total net realized capital gains (losses)	(17		)	53			(155		)	(126		)	(44		)	9			5				(119		)	(30		)
Other revenues	24			23			20			21			24			20			22				67			66
Total revenues	4,695			4,677			4,391			4,513			4,562			4,685			4,617				13,763			13,864
Benefits, losses and loss adjustment expenses	2,780			3,142			2,641			2,690			2,710			2,812			2,563				8,563			8,085
Amortization of DAC	403			368			374			290			434			391			387				1,145			1,212
Insurance operating costs and other expenses	898			912			909			943			971			910			948				2,719			2,829
Loss on extinguishment of debt	—			—			—			—			—			21			—				—			21
Reinsurance gain on disposition	—			—			—			—			(20		)	(8		)	—				—			(28		)
Interest expense	86			85			86			86			88			89			94				257			271
Total benefits, losses and expenses	4,167			4,507			4,010			4,009			4,183			4,215			3,992				12,684			12,390
Income from continuing operations before income taxes	528			170			381			504			379			470			625				1,079			1,474
Income tax expense (benefit) [2] [3] [4]	90			(46		)	58			83			7			57			158				102			222
Income from continuing operations, after-tax	438			216			323			421			372			413			467				977			1,252
Income from discontinued operations, after-tax	—			—			—			—			9			—			—				—			9
Net income	438			216			323			421			381			413			467				977			1,261
Less: Unlock benefit (charge), before tax	(13		)	18			13			53			(49		)	47			29				18			27
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax [1]	(13		)	51			(148		)	(135		)	(49		)	6			3				(110		)	(40		)
Less: Restructuring and other costs, before tax	—			—			—			(4		)	(4		)	(2		)	(10		)		—			(16		)
Less: Loss on extinguishment of debt, before tax	—			—			—			—			—			(21		)	—				—			(21		)
Less: Net reinsurance gain on dispositions, before tax	—			—			—			—			20			8			—				—			28
Less: Income tax benefit (expense) [2][4] [5]	51			25			73			62			90			(14		)	(7		)		149			69
Less: Income from discontinued operations, after-tax	—			—			—			—			9			—			—				—			9
Core earnings	$	413		$	122		$	385		$	445		$	364		$	389		$	452			$	920		$	1,205

[1]	The three months ended September 30, 2016 included an estimated capital loss on sale of the Company's U.K. property and casualty run-off subsidiaries of $59, before tax. This transaction is expected to close in the fourth quarter of 2016 and result in an estimated after-tax net gain of $6 on the sale.

[2]	The three months ended September 30, 2016 included an estimated federal income tax benefit of $65 on the sale of the Company's U.K. property and casualty run-off subsidiaries.

[3]	The three months ended September 30, 2015 and June 30, 2015, respectively, included an income tax provision of $12 and an income tax benefit of $48 due to uncertain tax positions.

[4]	The three months ended June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively, included federal income tax benefits of $53, $25, $34 and $60, respectively, from the reduction of the deferred tax valuation allowance on capital loss carryovers.

[5]	Primarily represents federal income tax benefit (expense) related to before tax items not included in core earnings.

2

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

OPERATING RESULTS BY SEGMENT

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Net income (loss):
Commercial Lines	$	272		$	240		$	228		$	293		$	211		$	259		$	240			$	740		$	710
Personal Lines	29			(53		)	20			51			19			41			76				(4		)	136
P&C Other Operations	31			(154		)	17			19			16			(111		)	$	23			(106		)	(72		)
Property & Casualty ("P&C")	332			33			265			363			246			189			$	339			630			774
Group Benefits	62			55			50			37			42			56			$	52			167			150
Mutual Funds	21			20			20			20			22			22			$	22			61			66
Sub-total	$	415		$	108		$	335		$	420		$	310		$	267		$	413			$	858		$	990
Talcott Resolution	78			104			17			28			74			217			$	111			199			402
Corporate	(55		)	4			(29		)	(27		)	(3		)	(71		)	$	(57	)		(80		)	(131		)
Net income	$	438		$	216		$	323		$	421		$	381		$	413		$	467			$	977		$	1,261
Core earnings (losses):
Commercial Lines	$	247		$	224		$	249		$	289		$	216		$	264		$	234			$	720		$	714
Personal Lines	25			(55		)	23			51			17			42			75				(7		)	134
P&C Other Operations	19			(154		)	19			18			18			(113		)	20				(116		)	(75		)
P&C	$	291		$	15		$	291		$	358		$	251		$	193		$	329			$	597		$	773
Group Benefits	51			46			48			40			47			56			52				145			155
Mutual Funds	21			20			20			20			22			22			22				61			66
Sub-total	363			81			359			418			320			271			403				803			994
Talcott Resolution	104			91			77			83			107			171			111				272			389
Corporate	(54		)	(50		)	(51		)	(56		)	(63		)	(53		)	(62		)		(155		)	(178		)
Core earnings	$	413		$	122		$	385		$	445		$	364		$	389		$	452			$	920		$	1,205

3

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATING BALANCE SHEETS

    

	PROPERTY & CASUALTY							GROUP BENEFITS							MUTUAL FUNDS							TALCOTT RESOLUTION							CORPORATE							CONSOLIDATED
	Sept 30 2016			Dec 31 2015				Sept 30 2016			Dec 31 2015				Sept 30 2016			Dec 31 2015				Sept 30 2016			Dec 31 2015				Sept 30 2016			Dec 31 2015				Sept 30 2016			Dec 31 2015
Investments
Fixed maturities, available-for-sale, at fair value	$	25,917		$	25,671			$	7,437		$	7,405			$	39		$	57			$	25,617		$	24,692			$	1,215		$	1,371			$	60,225		$	59,196
Fixed maturities, at fair value using the fair value option	139			233				108			116				—			—				113			154				—			—				360			503
Equity securities, available-for-sale, at fair value	625			497				10			35				—			—				99			459				141			130				875			1,121
Mortgage loans	1,926			1,917				829			789				—			—				2,856			2,918				—			—				5,611			5,624
Policy loans, at outstanding balance	—			—				1			1				—			—				1,431			1,446				—			—				1,432			1,447
Limited partnerships and other alternative investments	1,316			1,490				200			193				—			—				966			1,191				—			—				2,482			2,874
Other investments	90			(172		)		3			(8		)		(1		)	—				420			293				3			7				515			120
Short-term investments	628			581				167			167				149			147				781			588				494			360				2,219			1,843
Total investments	$	30,641		$	30,217			$	8,755		$	8,698			$	187		$	204			$	32,283		$	31,741			$	1,853		$	1,868			$	73,719		$	72,728
Cash	355			128				23			14				5			1				427			305				—			—				810			448
Premiums receivable and agents’ balances	3,410			3,275				253			261				—			—				—			1				—			—				3,663			3,537
Reinsurance recoverables	2,313			2,515				575			596				—			—				20,238			20,078				—			—				23,126			23,189
DAC	600			590				41			35				12			11				1,030			1,180				—			—				1,683			1,816
Deferred income taxes	124			367				(231		)	(131		)		5			4				1,053			1,335				1,488			1,631				2,439			3,206
Goodwill	157			119				—			—				180			149				—			—				230			230				567			498
Property and equipment, net	868			835				54			55				1			1				69			74				9			9				1,001			974
Other assets	920			1,051				142			138				90			79				632			482				69			79				1,853			1,829
Assets held for sale [1]	921			—				—			—				—			—				—			—				—			—				921			—
Separate account assets [2]	—			—				—			—				—			—				118,648			120,123				—			—				118,648			120,123
Total assets	$	40,309		$	39,097			$	9,612		$	9,666			$	480		$	449			$	174,380		$	175,319			$	3,649		$	3,817			$	228,430		$	228,348
Future policy benefits, unpaid losses and loss adjustment expenses	21,615			21,825				6,236			6,379				—			—				14,001			13,368				—			$	—			$	41,852		$	41,572
Other policyholder funds and benefits payable	—			—				489			495				—			—				30,756			31,175				—			—				31,245			31,670
Unearned premiums	5,473			5,233				41			43				—			—				108			109				—			—				5,622			5,385
Debt	—			—				—			—				—			—				142			143				5,183			5,216				5,325			5,359
Other liabilities	1,143			1,171				274			307				167			148				2,012			1,786				2,831			3,185				6,427			6,597
Liabilities held for sale [1]	653			—				—			—				—			—				—			—				—			—				653			—
Separate account liabilities	—			—				—			—				—			—				118,648			120,123				—			—				118,648			120,123
Total liabilities	$	28,884		$	28,229			$	7,040		$	7,224			$	167		$	148			$	165,667		$	166,704			$	8,014		$	8,401			$	209,772		$	210,706
Common equity, excluding AOCI	10,348			10,342				2,213			2,219				313			301				7,542			8,032				(2,745		)	(2,923		)		17,671			17,971
AOCI, after-tax	1,077			526				359			223				—			—				1,171			583				(1,620		)	(1,661		)		987			(329		)
Total stockholders’ equity	11,425			10,868				2,572			2,442				313			301				8,713			8,615				(4,365		)	(4,584		)		18,658			17,642
Total liabilities and equity	$	40,309		$	39,097			$	9,612		$	9,666			$	480		$	449			$	174,380		$	175,319			$	3,649		$	3,817			$	228,430		$	228,348

[1]	Related to the Company's U.K. property and casualty run-off subsidiaries.

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

4

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CAPITAL STRUCTURE

	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015
DEBT
Short-term debt	$	690		$	690		$	690		$	275		$	167		$	167		$	167
Senior notes	3,552			3,551			3,550			3,984			4,259			4,258			4,553
Junior subordinated debentures	1,083			1,083			1,083			1,100			1,100			1,100			1,100
Total debt	$	5,325		$	5,324		$	5,323		$	5,359		$	5,526		$	5,525		5,820
STOCKHOLDERS’ EQUITY
Common stockholders' equity, excluding AOCI	$	17,671		$	17,659		$	17,858		$	17,971		$	18,064		$	18,039		17,927
AOCI	987			900			254			(329		)	140			188			1,150
Total stockholders’ equity	$	18,658		$	18,559		$	18,112		$	17,642		$	18,204		$	18,227		$	19,077
CAPITALIZATION
Total capitalization, including AOCI, after-tax	$	23,983		$	23,883		$	23,435		$	23,001		$	23,730		$	23,752		$	24,897
Total capitalization, excluding AOCI, after-tax	$	22,996		$	22,983		$	23,181		$	23,330		$	23,590		$	23,564		$	23,747
DEBT TO CAPITALIZATION RATIOS
Total debt to capitalization, including AOCI	22.2		%	22.3		%	22.7		%	23.3		%	23.3		%	23.3		%	23.4		%
Total debt to capitalization, excluding AOCI	23.2		%	23.2		%	23.0		%	23.0		%	23.4		%	23.4		%	24.5		%
Total rating agency adjusted debt to capitalization [1] [2]	25.8		%	25.9		%	26.4		%	27.0		%	26.9		%	26.9		%	26.9		%
ANNUAL FIXED CHARGE COVERAGE RATIOS
Total earnings to total fixed charges (after interest credited to contractholders) [3]										2.9:1
Total earnings to total fixed charges (before interest credited to contractholders) [4]										6.1:1

[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 $1.5 billion, $1.5 billion, $1.5 billion, $1.5 billion, $1.6 billion, $1.6 billion, $1.6 billion for the three months ended September 30 2016, June 30 2016, March 31, 2016, December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015, respectively.

[2]	Reflects 25% equity credit for the Company's outstanding junior subordinated debentures.

[3]

Calculated as total earnings divided by total fixed charges. Total earnings represent income from continuing operations before income taxes, total fixed charges and interest credited to contractholders, less undistributed earnings from limited partnerships and other alternative investments. Total fixed charges include: interest expense, rent expense, capitalized interest, amortization of debt issuance costs and interest credited to contractholders. Interest credited to contractholders includes interest credited on general account assets and interest credited on consumer notes.

[4]	Calculated as total earnings divided by total fixed charges. Total earnings represent income from continuing operations before income taxes and total fixed charges, less undistributed earnings from limited partnerships and other alternative investments. Total fixed charges include: interest expense, rent expense, capitalized interest and amortization of debt issuance costs.

5

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

STATUTORY CAPITAL TO GAAP STOCKHOLDERS’ EQUITY RECONCILIATION

SEPTEMBER 30, 2016

	P&C			GROUP BENEFITS			TALCOTT RESOLUTION
U.S. statutory net income [1]	$	574		$	162		$	294
U.S. statutory capital [2]	$	8,655		$	1,616		$	4,423
U.S. GAAP adjustments:
DAC	600			41			1,030
Non-admitted deferred tax assets [3]	299			34			1,405
Deferred taxes [4]	(1,342		)	(401		)	(1,032		)
Goodwill	102			—			—
Non-admitted assets other than deferred taxes	699			72			18
Asset valuation and interest maintenance reserve	—			212			560
Benefit reserves	(25		)	221			(148		)
Unrealized gains on investments	1,636			537			2,066
Other, net	801			240			391
U.S. GAAP stockholders’ equity	$	11,425		$	2,572		$	8,713

[1]	Statutory net income is for the nine months ended September 30, 2016.

[2]	For reporting purposes, statutory capital and surplus is referred to collectively as "statutory capital".

[3]	Represents the limitations on the recognition of deferred tax assets under U.S. statutory accounting principles ("U.S. STAT").

[4]	Represents the tax timing differences between U.S. GAAP and U.S. STAT.

6

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

 

	AS OF
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015
Fixed maturities net unrealized gain	$	2,418		$	2,406		$	1,780		$	1,281		$	1,571		$	1,636		$	2,565
Equities net unrealized gain (loss)	41			31			21			(2		)	(8		)	21			13
OTTI losses recognized in AOCI	(5		)	(10		)	(15		)	(7		)	(4		)	(7		)	(8		)
Net gain on cash flow hedging instruments	172			200			184			130			170			122			177
Total net unrealized gain	$	2,626		$	2,627		$	1,970		$	1,402		$	1,729		$	1,772		$	2,747
Foreign currency translation adjustments	10			(68		)	(49		)	(55		)	(38		)	(24		)	(28		)
Pension and other postretirement adjustment	(1,649		)	(1,659		)	(1,667		)	(1,676		)	(1,551		)	(1,560		)	(1,569		)
Total AOCI	$	987		$	900		$	254		$	(329	)	$	140		$	188		$	1,150

7

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PROPERTY & CASUALTY

INCOME STATEMENTS

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Written premiums	$	2,673		$	2,661		$	2,679		$	2,576		$	2,674		$	2,667		$	2,661			$	8,013		$	8,002
Change in unearned premium reserve	16			35			81			(91		)	49			78			126				132			253
Earned premiums	2,657			2,626			2,598			2,667			2,625			2,589			2,535				7,881			7,749
Losses and loss adjustment expenses
Current accident year before catastrophes	1,688			1,627			1,545			1,610			1,634			1,525			1,546				4,860			4,705
Current accident year catastrophes	80			184			91			34			76			139			83				355			298
Prior accident year development [1]	25			351			33			(5		)	37			220			(2		)		409			255
Total losses and loss adjustment expenses	1,793			2,162			1,669			1,639			1,747			1,884			1,627				5,624			5,258
Amortization of DAC	329			331			331			330			329			327			324				991			980
Underwriting expenses	437			445			456			469			474			446			449				1,338			1,369
Dividends to policyholders	4			4			4			4			4			4			5				12			13
Underwriting gain (loss) *	94			(316		)	138			225			71			(72		)	130				(84		)	129
Net investment income	305			292			272			270			267			307			327				869			901
Net realized capital gains (losses) [2]	(3		)	35			(41		)	10			(16		)	(6		)	13				(9		)	(9		)
Net servicing and other income [3]	9			5			7			7			8			27			6				21			41
Income from continuing operations before income taxes	405			16			376			512			330			256			476				797			1,062
Income tax expense (benefit) [2]	73			(17		)	111			149			91			67			137				167			295
Income from continuing operations, after-tax	332			33			265			363			239			189			339				630			767
Income from discontinued operations, after-tax	—			—			—			—			7			—			—				—			7
Net income	332			33			265			363			246			189			339				630			774
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax	(3		)	35			(40		)	6			(15		)	(7		)	14				(8		)	(8		)
Less: Income tax benefit (expense) on items not included in core earnings	44			(17		)	14			(1		)	3			3			(4		)		41			2
Less: Income from discontinued operations, after-tax	—			—			—			—			7			—			—				—			7
Core earnings	$	291		$	15		$	291		$	358		$	251		$	193		$	329			$	597		$	773
ROE
Net income (net income last 12 months to stockholders' equity including AOCI)	10.4		%	9.3		%	11.1		%	12.5		%	12.4		%	13.5		%	11.5		%
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax	—		%	(0.2		)%	(0.6		)%	—		%	—		%	0.5		%	0.3		%
Less: Income tax benefit (expense) on items not included in core earnings	0.5		%	—		%	0.2		%	—		%	—		%	(0.2		)%	(0.1		)%
Less: Income from discontinued operations, after-tax	—		%	0.1		%	0.1		%	0.1		%	0.2		%	0.1		%	0.1		%
Less: Impact of AOCI, excluded from Core ROE	(1.1		)%	(0.9		)%	(1.3		)%	(1.1		)%	(1.2		)%	(1.3		)%	(1.2		)%
Core earnings (core earnings last 12 months to stockholders' equity excluding AOCI)	11.0		%	10.3		%	12.7		%	13.5		%	13.4		%	14.4		%	12.4		%

[1]	The three months ended June 30, 2016 and 2015 included unfavorable reserve development of $197 and $146, respectively, related to asbestos reserves, and $71 and $52, respectively, related to environmental reserves.

[2]	For further information for the three months ended September 30, 2016, see P&C Other Operations Income Statements, page 18.

[3]	The three months ended June 30, 2015 includes a benefit of $20, before-tax, from the resolution of litigation.

* Denotes financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP).

8

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PROPERTY & CASUALTY

UNDERWRITING RATIOS AND RESULTS

 

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
UNDERWRITING GAIN (LOSS)	$	94		$	(316	)	$	138		$	225		$	71		$	(72	)	$	130			$	(84	)	$	129
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	63.5			62.0			59.5			60.4			62.2			58.9			61.0				61.7			60.7
Current accident year catastrophes	3.0			7.0			3.5			1.3			2.9			5.4			3.3				4.5			3.8
Prior accident year development [1] [2]	0.9			13.4			1.3			(0.2		)	1.4			8.5			(0.1		)		5.2			3.3
Total losses and loss adjustment expenses	67.5			82.3			64.2			61.5			66.6			72.8			64.2				71.4			67.9
Expenses	28.8			29.6			30.3			30.0			30.6			29.9			30.5				29.6			30.3
Policyholder dividends	0.2			0.2			0.2			0.1			0.2			0.2			0.2				0.2			0.2
Combined ratio	96.5			112.0			94.7			91.6			97.3			102.8			94.9				101.1			98.3
Current accident year catastrophes and prior year development	3.9			20.4			4.8			1.1			4.3			13.9			3.2				9.7			7.1
Combined ratio before catastrophes and prior year development *	92.5			91.7			89.9			90.5			93.0			88.9			91.7				91.4			91.2

[1]	The three months ended June 30, 2016 and 2015 included 10.2 point and 7.6 point, respectively, of unfavorable impact related to asbestos and environmental prior accident year loss reserve development.

[2]	The following table summarizes unfavorable (favorable) prior accident year reserve development. For additional information see the Commercial Lines, Personal Lines and P&C Other Operations segments presented in this document.

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Auto liability - Commercial Lines	$	18		$	(8	)	$	9		$	2		$	30		$	5		$	25			$	19		$	60
Auto liability - Personal Lines	—			75			65			(1		)	(7		)	—			—				140			(7		)
Homeowners	1			1			(6		)	—			2			6			1				(4		)	9
Professional and general liability	(1		)	34			(1		)	2			3			(3		)	(30		)		32			(30		)
Package business	(2		)	7			45			20			3			4			1				50			8
Net asbestos reserves	—			197			—			—			—			146			—				197			146
Net environmental reserves	—			71			—			—			—			52			3				71			55
Workers’ compensation	(4		)	(4		)	(79		)	(37		)	—			—			—				(87		)	—
Workers' compensation discount accretion	7			7			7			7			7			7			8				21			22
Catastrophes	(2		)	2			(7		)	(1		)	1			—			(18		)		(7		)	(17		)
Uncollectible reinsurance	—			(30		)	—			—			—			—			—				(30		)	—
Other reserve re-estimates, net	8			(1		)	—			3			(2		)	3			8				7			9
Total prior accident year development	$	25		$	351		$	33		$	(5	)	$	37		$	220		$	(2	)		$	409		$	255

* Denotes financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP).

9

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL LINES

INCOME STATEMENTS

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Written premiums	$	1,673		$	1,669		$	1,726		$	1,609		$	1,639		$	1,655		$	1,722			$	5,068		$	5,016
Change in unearned premium reserve	(4		)	19			103			(49		)	(8		)	32			139				118			163
Earned premiums	1,677			1,650			1,623			1,658			1,647			1,623			1,583				4,950			4,853
Losses and loss adjustment expenses
Current accident year before catastrophes	969			938			913			923			952			909			928				2,820			2,789
Current accident year catastrophes	43			80			44			13			8			42			58				167			108
Prior accident year development [1]	22			6			(20		)	(16		)	50			21			(2		)		8			69
Total losses and loss adjustment expenses	1,034			1,024			937			920			1,010			972			984				2,995			2,966
Amortization of DAC	243			242			242			241			239			237			234				727			710
Underwriting expenses	293			298			295			295			304			284			295				886			883
Dividends to policyholders	4			4			4			4			4			4			5				12			13
Underwriting gain	103			82			145			198			90			126			65				330			281
Net servicing income	8			5			4			6			6			4			4				17			14
Net investment income	239			226			209			206			208			239			257				674			704
Net realized capital gains (losses)	39			25			(33		)	11			(18		)	(7		)	8				31			(17		)
Other income (expenses)	(3		)	—			1			(2		)	1			2			1				(2		)	4
Income from continuing operations before income taxes	386			338			326			419			287			364			335				1,050			986
Income tax expense	114			98			98			126			83			105			95				310			283
Income from continuing operations, after-tax	272			240			228			293			204			259			240				740			703
Income from discontinued operations, after-tax	—			—			—			—			7			—			—				—			7
Net income	272			240			228			293			211			259			240				740			710
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax	39			25			(32		)	6			(16		)	(8		)	9				32			(15		)
Less: Income tax benefit (expense)	(14		)	(9		)	11			(2		)	4			3			(3		)		(12		)	4
Less: Income from discontinued operations, after-tax	—			—			—			—			7			—			—				—			7
Core earnings	$	247		$	224		$	249		$	289		$	216		$	264		$	234			$	720		$	714

[1]	For further information, see Commercial Lines Income Statements (continued), page 11.

10

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL LINES

INCOME STATEMENTS (CONTINUED)

[1] The following table summarizes unfavorable (favorable) prior accident year reserve development.

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Auto liability	$	18		$	(8	)	$	9		$	2		$	30		$	5		$	25			$	19		$	60
Professional liability	(2		)	—			(33		)	(13		)	(6		)	—			(17		)		(35		)	(23		)
Package business	(2		)	7			45			20			3			4			1				50			8
General liability	1			34			32			15			9			(3		)	(13		)		67			(7		)
Workers’ compensation	(4		)	(4		)	(79		)	(37		)	—			—			—				(87		)	—
Workers' compensation discount accretion	7			7			7			7			7			7			8				21			22
Catastrophes	(3		)	1			(2		)	1			1			4			(6		)		(4		)	(1		)
Uncollectible reinsurance	—			(30		)	—			—			—			—			—				(30		)	—
Other reserve re-estimates, net	7			(1		)	1			(11		)	6			4			—				7			10
Total net prior accident year development	$	22		$	6		$	(20	)	$	(16	)	$	50		$	21		$	(2	)		$	8		$	69

    

11

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL LINES

UNDERWRITING RATIOS 

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
UNDERWRITING GAIN	$	103		$	82		$	145		$	198		$	90		$	126		$	65			$	330		$	281
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	57.8			56.8			56.3			55.7			57.8			56.0			58.6				57.0			57.5
Current accident year catastrophes	2.6			4.8			2.7			0.8			0.5			2.6			3.7				3.4			2.2
Prior accident year development	1.3			0.4			(1.2		)	(1.0		)	3.0			1.3			(0.1		)		0.2			1.4
Total losses and loss adjustment expenses	61.7			62.1			57.7			55.5			61.3			59.9			62.2				60.5			61.1
Expenses	32.0			32.7			33.1			32.3			33.0			32.1			33.4				32.6			32.8
Policyholder dividends	0.2			0.2			0.2			0.2			0.2			0.2			0.3				0.2			0.3
Combined ratio [1]	93.9			95.0			91.1			88.1			94.5			92.2			95.9				93.3			94.2
Current accident year catastrophes and prior year development	3.9			5.2			1.5			(0.2		)	3.5			3.9			3.6				3.6			3.6
Combined ratio before catastrophes and prior year development	90.0			89.8			89.6			88.2			91.0			88.4			92.4				89.8			90.6
COMBINED RATIOS BY LINE OF BUSINESS
SMALL COMMERCIAL
Combined ratio	89.0			92.2			89.4			85.3			88.0			89.2			93.9				90.2			90.3
Combined ratio before catastrophes	87.6			87.3			86.7			84.5			87.5			86.0			90.5				87.2			88.0
Combined ratio before catastrophes and prior year development	86.8			86.9			86.7			85.1			86.8			85.1			89.6				86.8			87.1
MIDDLE MARKET
Combined ratio	99.4			99.8			98.3			93.3			102.5			94.5			98.9				99.2			98.7
Combined ratio before catastrophes	94.9			93.1			94.9			91.9			101.5			91.1			94.6				94.3			95.8
Combined ratio before catastrophes and prior year development	93.1			91.9			92.0			89.0			93.8			89.3			93.7				92.4			92.3
SPECIALTY COMMERCIAL
Combined ratio	94.0			92.8			76.5			83.9			81.5			100.4			94.5				87.8			92.0
Combined ratio before catastrophes	93.5			92.7			76.5			83.9			81.5			100.4			94.5				87.6			92.0
Combined ratio before catastrophes and prior year development	93.7			95.4			94.3			98.1			99.1			98.8			99.1				94.4			99.0

[1]	The three months ended September 30, 2015 includes 2.4 points of net unfavorable reserve development related to strengthening of reserves for commercial surety bonds that is not included in the combined ratios by line of business (shown above) for Small Commercial, Middle Market and Specialty Commercial.

12

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL LINES

SUPPLEMENTAL DATA

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
WRITTEN PREMIUMS
Small Commercial	$	866		$	883		$	926		$	793		$	822		$	867		$	906			$	2,675		$	2,595
Middle Market	590			578			568			603			594			578			589				1,736			1,761
Specialty Commercial	207			197			222			204			215			200			219				626			634
National Accounts	89			79			101			93			95			82			100				269			277
Financial Products	62			59			60			62			64			60			61				181			185
Bond	51			48			44			46			50			49			46				143			145
Other Specialty	5			11			17			3			6			9			12				33			27
Other	10			11			10			9			8			10			8				31			26
Total	$	1,673		$	1,669		$	1,726		$	1,609		$	1,639		$	1,655		$	1,722			$	5,068		$	5,016
EARNED PREMIUMS
Small Commercial	$	880		$	854		$	839		$	844		$	839		$	833		$	810			$	2,573		$	2,482
Middle Market	586			584			574			600			590			583			566				1,744			1,739
Specialty Commercial	201			201			199			208			208			198			198				601			604
National Accounts	82			85			85			92			88			82			83				252			253
Financial Products	60			62			61			63			63			63			61				183			187
Bond	49			46			45			47			48			47			46				140			141
Other Specialty	10			8			8			6			9			6			8				26			23
Other	10			11			11			6			10			9			9				32			28
Total	$	1,677		$	1,650		$	1,623		$	1,658		$	1,647		$	1,623		$	1,583			$	4,950		$	4,853
STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
New Business Premium
Small Commercial	$	146		$	139		$	146		$	133		$	131		$	141		$	140			$	431		$	412
Middle Market	$	99		$	124		$	103		$	114		$	117		$	119		$	124			$	326		$	360
Renewal Price Increases [1]
Standard Commercial Lines - Written	2		%	2		%	2		%	2		%	2		%	2		%	3		%		2		%	2		%
Standard Commercial Lines - Earned	2		%	2		%	2		%	3		%	3		%	4		%	5		%		2		%	4		%
Policy Count Retention [1]
Small Commercial [2]	85		%	84		%	84		%	85		%	84		%	83		%	85		%		84		%	84		%
Middle Market	76		%	75		%	74		%	81		%	81		%	81		%	81		%		75		%	81		%
Middle Market - normalized [2]	80		%	79		%	79		%
Policies in Force (in thousands)
Small Commercial	1,279			1,253			1,245			1,254			1,230			1,239			1,211
Middle Market [1]	66			67			69			71			71			72			72

[1]	Excludes Maxum, Middle Market specialty programs and livestock lines of business.

[2]	Normalized retention rate for the effect of including certain low premium policies transferred from Middle Market to Small Commercial. The transfer did not have a significant impact on policy count retention in Small Commercial.

13

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

INCOME STATEMENTS

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Written premiums	$	1,000		$	992		$	953		$	936		$	1,034		$	1,009		$	939			$	2,945		$	2,982
Change in unearned premium reserve	20			16			(22		)	(42		)	57			43			(13		)		14			87
Earned premiums	980			976			975			978			977			966			952				2,931			2,895
Losses and loss adjustment expenses
Current accident year before catastrophes	719			689			632			662			682			616			618				2,040			1,916
Current accident year catastrophes	37			104			47			21			68			97			25				188			190
Prior accident year development [1]	3			76			52			(3		)	(14		)	—			(4		)		131			(18		)
Total losses and loss adjustment expenses	759			869			731			680			736			713			639				2,359			2,088
Amortization of DAC	86			89			89			89			90			90			90				264			270
Underwriting expenses	137			141			154			163			162			155			148				432			465
Underwriting gain (loss)	(2		)	(123		)	1			46			(11		)	8			75				(124		)	72
Net servicing income	—			—			—			1			—			2			1				—			3
Net investment income	35			33			31			30			29			34			35				99			98
Net realized capital gains (losses)	5			4			(5		)	—			4			(1		)	1				4			4
Other income (expense)	2			—			—			(1		)	(1		)	18			(1		)		2			16
Income (loss) before income taxes	40			(86		)	27			76			21			61			111				(19		)	193
Income tax expense (benefit)	11			(33		)	7			25			2			20			35				(15		)	57
Net income (loss)	29			(53		)	20			51			19			41			76				(4		)	136
Less: Net realized capital gains (losses), after DAC, excluded from core earnings, before tax	5			4			(5		)	1			3			(1		)	1				4			3
Less: Income tax benefit (expense)	(1		)	(2		)	2			(1		)	(1		)	—			—				(1		)	(1		)
Core earnings (losses)	$	25		$	(55	)	$	23		$	51		$	17		$	42		$	75			$	(7	)	$	134

[1]	Prior accident year development included the following unfavorable (favorable) reserve development:

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Auto liability [a]	$	—		$	75		$	65		$	(1	)	$	(7	)	$	—		$	—			$	140		$	(7	)
Homeowners	1			1			(6		)	—			2			6			1				(4		)	9
Catastrophes	1			1			(5		)	(2		)	—			(4		)	(12		)		(3		)	(16		)
Other reserve re-estimates, net	1			(1		)	(2		)	—			(9		)	(2		)	7				(2		)	(4		)
Total prior accident year development	$	3		$	76		$	52		$	(3	)	$	(14	)	$	—		$	(4	)		$	131		$	(18	)

[a]

For the three months ended June 30, 2016 unfavorable reserve development was primarily due to higher than expected emerged severity of bodily injury claims and higher than expected emerged frequency of uninsured and under-insured motorist claims related to accident year 2015. For the three months ended March 31, 2016 unfavorable reserve development was primarily due to higher than expected emerged bodily injury severity for accident years 2014 and 2015 and, for the third and fourth accident quarters of 2015, an increase in bodily injury frequency.

14

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

UNDERWRITING RATIOS

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
UNDERWRITING GAIN (LOSS)	$	(2	)	$	(123	)	$	1		$	46		$	(11	)	$	8		$	75			$	(124	)	$	72
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	73.4			70.6			64.8			67.7			69.8			63.8			64.9				69.6			66.2
Current accident year catastrophes	3.8			10.7			4.8			2.1			7.0			10.0			2.6				6.4			6.6
Prior accident year development	0.3			7.8			5.3			(0.3		)	(1.4		)	—			(0.4		)		4.5			(0.6		)
Total losses and loss adjustment expenses	77.4			89.0			75.0			69.5			75.3			73.8			67.1				80.5			72.1
Expenses	22.8			23.6			24.9			25.8			25.8			25.4			25.0				23.7			25.4
Combined ratio	100.2			112.6			99.9			95.3			101.1			99.2			92.1				104.2			97.5
Current accident year catastrophes and prior year development	4.1			18.5			10.1			1.8			5.6			10.0			2.2				10.9			6.0
Combined ratio before catastrophes and prior year development	96.1			94.2			89.7			93.5			95.6			89.1			89.9				93.3			91.6
PRODUCT
Automobile
Combined ratio	104.8			117.0			106.6			103.5			100.4			98.3			95.4				109.5			98.1
Combined ratio before catastrophes and prior year development	103.1			102.7			96.2			102.9			101.6			96.6			94.6				100.7			97.6
Homeowners
Combined ratio	89.2			102.4			84.7			76.9			105.5			100.7			85.1				92.1			97.1
Combined ratio before catastrophes and prior year development	79.6			74.2			75.1			72.4			82.4			72.6			79.7				76.3			78.2

    

15

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

SUPPLEMENTAL DATA

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
DISTRIBUTION
WRITTEN PREMIUMS
AARP Direct	$	762		$	752		$	711		$	675		$	762		$	744		$	677			$	2,225		$	2,183
AARP Agency	95			92			92			98			95			89			87				279			271
Other Agency	131			135			136			151			163			163			161				402			487
Other	12			13			14			12			14			13			14				39			41
Total	$	1,000		$	992		$	953		$	936		$	1,034		$	1,009		$	939			$	2,945		$	2,982
EARNED PREMIUMS
AARP Direct	$	731		$	723		$	715		$	712		$	709		$	698		$	685			$	2,169		$	2,092
AARP Agency	94			94			92			92			88			87			81				280			256
Other Agency	140			147			153			160			165			169			173				440			507
Other	15			12			15			14			15			12			13				42			40
Total	$	980		$	976		$	975		$	978		$	977		$	966		$	952			$	2,931		$	2,895
PRODUCT LINE
WRITTEN PREMIUMS
Automobile	$	691		$	686		$	690		$	655		$	707		$	688		$	671			$	2,067		$	2,066
Homeowners	309			306			263			281			327			321			268				878			916
Total	$	1,000		$	992		$	953		$	936		$	1,034		$	1,009		$	939			$	2,945		$	2,982
EARNED PREMIUMS
Automobile	$	686		$	680		$	678		$	677		$	674		$	665		$	655			$	2,044		$	1,994
Homeowners	294			296			297			301			303			301			297				887			901
Total	$	980		$	976		$	975		$	978		$	977		$	966		$	952			$	2,931		$	2,895
STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
New Business Premium
Automobile	$	70		$	83		$	110		$	114		$	111		$	96		$	101			$	263		$	308
Homeowners	$	18		$	21		$	23		$	25		$	29		$	29		$	27			$	62		$	85
Renewal Written Price Increases
Automobile	7		%	7		%	7		%	6		%	6		%	6		%	6		%		7		%	6		%
Homeowners	10		%	10		%	9		%	8		%	8		%	8		%	8		%		10		%	8		%
Renewal Earned Price Increases
Automobile	7		%	6		%	6		%	6		%	6		%	6		%	6		%		6		%	6		%
Homeowners	9		%	9		%	8		%	8		%	8		%	8		%	8		%		9		%	8		%
Policy Count Retention
Automobile	84		%	84		%	84		%	84		%	84		%	84		%	84		%		84		%	84		%
Homeowners	84		%	84		%	84		%	85		%	85		%	86		%	85		%		84		%	85		%
Premium Retention
Automobile	88		%	88		%	87		%	87		%	87		%	87		%	87		%		88		%	87		%
Homeowners	89		%	89		%	90		%	90		%	90		%	90		%	90		%		89		%	90		%
Policies in Force (in thousands)
Automobile	2,016			2,053			2,073			2,062			2,052			2,049			2,053
Homeowners	1,208			1,239			1,262			1,272			1,284			1,296			1,305

16

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

SUPPLEMENTAL DATA - AUTOMOBILE

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
New Business Premium by Distribution
AARP Direct	$	52		$	62		$	84		$	82		$	81		$	68		$	67			$	198		$	216
AARP Agency	12			14			17			19			17			16			19				43			52
Other Agency	6			6			8			11			11			10			13				20			34
Other	—			1			1			2			2			2			2				2			6
Total	$	70		$	83		$	110		$	114		$	111		$	96		$	101			$	263		$	308
Policy Count Retention by Distribution
AARP Direct	86		%	86		%	86		%	86		%	86		%	86		%	85		%		86		%	85		%
AARP Agency	78		%	78		%	78		%	77		%	78		%	80		%	81		%		78		%	80		%
Other Agency [1]	78		%	78		%	80		%	80		%	79		%	81		%	82		%		79		%	81		%
Total	84		%	84		%	84		%	84		%	84		%	84		%	84		%		84		%	84		%

[1] Includes policies that are available to renew on either a six or twelve month policy term. The policy retention represents the percentage of policies that renewed since the last policy term and is not annualized.

17

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

P&C OTHER OPERATIONS

INCOME STATEMENTS

 

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Written premiums	$	—		$	—		$	—		$	31		$	1		$	3		$	—			$	—		$	4
Change in unearned premium reserve	—			—			—			—			—			3			—				—			3
Earned premiums	—			—			—			31			1			—			—				—			1
Losses and loss adjustment expenses
Current accident year	—			—			—			25			—			—			—				—			—
Prior accident year development [1]	—			269			1			14			1			199			4				270			204
Total losses and loss adjustment expenses	—			269			1			39			1			199			4				270			204
Underwriting expenses	7			6			7			11			8			7			6				20			21
Underwriting loss	(7		)	(275		)	(8		)	(19		)	(8		)	(206		)	$	(10	)		(290		)	(224		)
Net investment income	31			33			32			34			30			34			35				96			99
Net realized capital gains (losses) [2]	(47		)	6			(3		)	(1		)	(2		)	2			4				(44		)	4
Other income	2			—			2			3			2			1			1				4			4
Income (loss) before income taxes	(21		)	(236		)	23			17			22			(169		)	30				(234		)	(117		)
Income tax expense (benefit)	(52		)	(82		)	6			(2		)	6			(58		)	7				(128		)	(45		)
Net income (loss)	31			(154		)	17			19			16			(111		)	23				(106		)	(72		)
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax [2]	(47		)	6			(3		)	(1		)	(2		)	2			4				(44		)	4
Less: Income tax benefit (expense) [3]	59			(6		)	1			2			—			—			(1		)		54			(1		)
Core earnings (losses)	$	19		$	(154	)	$	19		$	18		$	18		$	(113	)	$	20			$	(116	)	$	(75	)

[1]	The three months ended June 30, 2016 and 2015 included unfavorable reserve development of $197 and $146, respectively, related to asbestos reserves, and $71 and $52, respectively, related to environmental reserves.

[2]	The three months ended September 30, 2016 included an estimated capital loss on sale of the Company's U.K. property and casualty run-off subsidiaries of $59, before tax. This transaction is expected to close in the fourth quarter of 2016 and result in an estimated after-tax net gain of $6 on the sale.

[3]	Primarily represents federal income tax benefit (expense) related to before tax items not included in core earnings. The three months ended September 30, 2016 included an estimated federal income tax benefit of $65 on the sale of the Company's U.K. property and casualty run-off subsidiaries.

18

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

GROUP BENEFITS

INCOME STATEMENTS

 

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Earned premiums	$	792		$	790		$	778		$	774		$	752		$	780		$	763			$	2,360		$	2,295
Fee income	20			18			17			17			17			16			17				55			50
Net investment income	95			88			88			88			91			95			97				271			283
Net realized capital gains (losses)	19			16			2			(6		)	(6		)	2			(1		)		37			(5		)
Total revenues	926			912			885			873			854			893			876				2,723			2,623
Benefits, losses and loss adjustment expenses	642			634			618			620			591			618			598				1,894			1,807
Amortization of DAC	8			7			8			7			8			8			8				23			24
Insurance operating costs and other expenses	190			196			194			199			198			191			200				580			589
Total benefits, losses and expenses	840			837			820			826			797			817			806				2,497			2,420
Income before income taxes	86			75			65			47			57			76			70				226			203
Income tax expense	24			20			15			10			15			20			18				59			53
Net income	62			55			50			37			42			56			52				167			150
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax	17			15			2			(5		)	(7		)	—			—				34			(7		)
Less: Income tax benefit (expense) on items not included in core earnings	(6		)	(6		)	—			2			2			—			—				(12		)	2
Core earnings	$	51		$	46		$	48		$	40		$	47		$	56		$	52			$	145		$	155
Margin
Net income margin	6.7		%	6.0		%	5.7		%	4.2		%	4.9		%	6.3		%	5.9		%		6.1		%	5.7		%
Core earnings margin *	5.6		%	5.1		%	5.5		%	4.6		%	5.5		%	6.3		%	5.9		%		5.4		%	5.9		%
ROE
Net income (net income last 12 months to stockholders' equity including AOCI)	9.3		%	8.2		%	8.3		%	8.5		%	9.2		%	9.0		%	9.1		%
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax	1.5		%	0.3		%	(0.5		)%	(0.6		)%	(0.2		)%	0.1		%	0.4		%
Less: Income tax benefit (expense) on items not included in core earnings	(0.5		)%	(0.1		)%	0.2		%	0.2		%	0.1		%	0.1		%	(0.1		)%
Less: Impact of AOCI, excluded from Core ROE	(1.4		)%	(1.4		)%	(1.6		)%	(1.4		)%	(1.5		)%	(1.5		)%	(1.6		)%
Core earnings (core earnings last 12 months to stockholders' equity excluding AOCI)	9.7		%	9.4		%	10.2		%	10.3		%	10.8		%	10.3		%	10.4		%

* Denotes financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP).

19

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

GROUP BENEFITS

SUPPLEMENTAL DATA

 

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
PREMIUMS
Fully insured ongoing premiums
Group disability	$	360		$	363		$	352		$	356		$	344		$	358		$	354			$	1,075		$	1,056
Group life	381			376			369			371			364			376			365				1,126			1,105
Other	51			51			51			47			43			46			44				153			133
Total fully insured ongoing premiums	792			790			772			774			751			780			763				2,354			2,294
Total buyouts [1]	—			—			6			—			1			—			—				6			1
Total premiums	$	792		$	790		$	778		$	774		$	752		$	780		$	763			$	2,360		$	2,295
SALES (GROSS ANNUALIZED NEW PREMIUMS)
Fully insured ongoing sales
Group disability	$	30		$	45		$	84		$	22		$	24		$	27		$	123			$	159		$	174
Group life	26			31			149			20			33			28			148				206			209
Other	5			4			33			6			4			3			29				42			36
Total fully insured ongoing sales	61			80			266			48			61			58			300				407			419
Total buyouts [1]	—			—			6			—			1			—			—				6			1
Total sales	$	61		$	80		$	272		$	48		$	62		$	58		$	300			$	413		$	420
RATIOS, EXCLUDING BUYOUTS
Group disability loss ratio	79.4		%	79.9		%	82.4		%	82.9		%	80.9		%	80.8		%	81.8		%		80.5		%	81.2		%
Group life loss ratio	80.0		%	78.1		%	73.8		%	76.0		%	73.4		%	76.2		%	73.2		%		77.4		%	74.3		%
Total loss ratio	79.1		%	78.5		%	77.6		%	78.4		%	76.8		%	77.6		%	76.7		%		78.4		%	77.0		%
Expense ratio	24.4		%	25.1		%	25.6		%	26.0		%	26.8		%	25.0		%	26.7		%		25.0		%	26.2		%

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

20

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

MUTUAL FUNDS

INCOME STATEMENTS

 

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Investment management fees	$	145		$	140		$	135		$	146		$	149		$	152		$	147			$	420		$	448
Shareholder servicing fees	20			20			20			20			19			19			19				60			57
Other revenue	13			13			12			13			14			13			13				38			40
Total revenues	178			173			167			179			182			184			179				518			545
Sub-advisory	52			50			48			53			53			55			52				150			160
Employee compensation and benefits	26			24			24			25			23			25			25				74			73
Distribution and service	40			39			39			40			42			42			41				118			125
General, administrative and other	29			28			25			29			30			28			27				82			85
Total expenses	147			141			136			147			148			150			145				424			443
Income before income taxes	31			32			31			32			34			34			34				94			102
Income tax expense	10			12			11			12			12			12			12				33			36
Net income	$	21		$	20		$	20		$	20		$	22		$	22		$	22			$	61		$	66
Core earnings	$	21		$	20		$	20		$	20		$	22		$	22		$	22			$	61		$	66
Average Total Mutual Funds segment AUM	$	92,962		$90,919			$91,188			$90,503			$92,350			$95,797			$94,778				$	93,232		$	91,331
Return on assets (bps, after-tax) [1]
Net income	9.0			8.8			8.8			8.8			9.5			9.2			9.3				8.7			9.6
Core earnings	9.0			8.8			8.8			8.8			9.5			9.2			9.3				8.7			9.6
ROE
Net income (net income last 12 months to stockholders' equity including AOCI)	33.2		%	34.2		%	35.5		%	37.4		%	39.8		%	40.3		%	40.4		%
Less: Restructuring and other costs, before tax	—		%	—		%	—		%	—		%	(2.8		)%	(2.8		)%	(2.8		)%
Less: Income tax benefit on items not included in core earnings	—		%	—		%	—		%	—		%	0.9		%	0.9		%	0.9		%
Less: Impact of AOCI, excluded from Core ROE	(0.2		)%	(0.2		)%	(0.3		)%	(0.1		)%	(0.2		)%	(0.3		)%	(0.4		)%
Core earnings (core earnings last 12 months to stockholders' equity excluding AOCI)	33.4		%	34.4		%	35.8		%	37.5		%	41.9		%	42.5		%	42.7		%

[1]	Represents annualized earnings divided by average assets under management, as measured in basis points.

21

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

MUTUAL FUNDS

ASSET VALUE ROLL FORWARD

ASSETS UNDER MANAGEMENT BY ASSET CLASS

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Equity
Beginning balance	$	46,808		$	46,455		$	47,369		$	44,318		$	47,841		$	47,131		$	45,221			$	47,369		$	45,221
Sales	2,722			2,324			3,069			2,863			2,746			2,367			2,583				8,115			7,696
Redemptions	(3,138		)	(2,974		)	(2,853		)	(2,134		)	(2,105		)	(2,145		)	(2,307		)		(8,965		)	(6,557		)
Net flows	(416		)	(650		)	216			729			641			222			276				(850		)	1,139
Change in market value and other	2,084			1,003			(1,130		)	2,322			(4,164		)	488			1,634				1,957			(2,042		)
Ending balance	$	48,476		$	46,808		$	46,455		$	47,369		$	44,318		$	47,841		$	47,131			$	48,476		$	44,318
Fixed Income
Beginning balance	$	12,491		$	12,389		$	12,625		$	13,443		$	13,844		$	14,267		$	14,046			$	12,625		$	14,046
Sales	1,027			843			918			988			878			883			1,240				2,788			3,001
Redemptions	(888		)	(1,012		)	(1,432		)	(1,549		)	(1,166		)	(1,084		)	(1,338		)		(3,332		)	(3,588		)
Net flows	139			(169		)	(514		)	(561		)	(288		)	(201		)	(98		)		(544		)	(587		)
Change in market value and other	234			271			278			(257		)	(113		)	(222		)	319				783			(16		)
Ending balance	$	12,864		$	12,491		$	12,389		$	12,625		$	13,443		$	13,844		$	14,267			$	12,864		$	13,443
Multi-Strategy Investments [1]
Beginning balance	$	15,642		$	14,775		$	14,419		$	13,784		$	14,566		$	14,298		$	13,768			$	14,419		$	13,768
Sales	1,147			920			712			785			568			739			887				2,779			2,194
Redemptions	(676		)	(520		)	(600		)	(548		)	(614		)	(510		)	(536		)		(1,796		)	(1,660		)
Net flows	471			400			112			237			(46		)	229			351				983			534
Change in market value and other	451			467			244			398			(736		)	39			179				1,162			(518		)
Ending balance	$	16,564		$	15,642		$	14,775		$	14,419		$	13,784		$	14,566		$	14,298			$	16,564		$	13,784
Mutual Fund AUM
Beginning balance	$	74,941		$	73,619		$	74,413		$	71,545		$	76,251		$	75,696		$	73,035			$	74,413		$	73,035
Sales	4,896			4,087			4,699			4,636			4,192			3,989			4,710				13,682			12,891
Redemptions	(4,702		)	(4,506		)	(4,885		)	(4,231		)	(3,885		)	(3,739		)	(4,181		)		(14,093		)	(11,805		)
Net flows	194			(419		)	(186		)	405			307			250			529				(411		)	1,086
Change in market value and other	2,769			1,741			(608		)	2,463			(5,013		)	305			2,132				3,902			(2,576		)
Ending balance	$	77,904		$	74,941		$	73,619		$	74,413		$	71,545		$	76,251		$	75,696			$	77,904		$	71,545
Exchange Traded Funds AUM [2]	$	210																					$	210
Mutual Funds segment AUM before Talcott Resolution	$	78,114		$	74,941		$	73,619		$	74,413		$	71,545		$	76,251		$	75,696			$	78,114		$	71,545
Talcott Resolution AUM [3]	$	16,387		$	16,482		$	16,795		$	17,549		$	17,498		$	19,406		$	20,240			$	16,387		$	17,498
Total Mutual Funds segment AUM	$	94,501		$	91,423		$	90,414		$	91,962		$	89,043		$	95,657		$	95,936			$	94,501		$	89,043

[1] Includes balanced, allocation, and alternative investment products.

[2] Includes AUM of approximately $200 acquired upon acquisition in July 2016 of Lattice Strategies, LLC and subsequent net flows and change in market value.

[3] Talcott Resolution AUM consists of Company-sponsored mutual fund assets held in separate accounts supporting variable insurance and investment products.

22

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

TALCOTT RESOLUTION

FINANCIAL HIGHLIGHTS

 

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
NET INCOME
Individual Annuity [1]	$	33		$	76		$	39		$	7		$	47		$	141		$	89			$	148		$	277
Institutional and other	45			28			(22		)	21			27			76			22				51			125
Talcott Resolution net income	78			104			17			28			74			217			111				199			402
Less: Unlock benefit (charge), before tax	(13		)	18			13			53			(49		)	47			29				18			27
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax	(28		)	3			(106		)	(135		)	(22		)	11			(29		)		(131		)	(40		)
Less: Net reinsurance gain on dispositions, before tax	—			—			—			—			20			8			—				—			28
Less: Income tax benefit (expense) on items not included in core earnings	15			(8		)	33			27			16			(20		)	—				40			(4		)
Less: Income from discontinued operations, after-tax	—			—			—			—			2			—			—				—			2
Talcott Resolution core earnings	$	104		$	91		$	77		$	83		$	107		$	171		$	111			$	272		$	389
CORE EARNINGS
Individual Annuity	$	68		$	69		$	61		$	70		$	83		$	134		$	83			$	198		$	300
Institutional and other	36			22			16			13			24			37			28				74			89
Talcott Resolution core earnings	$	104		$	91		$	77		$	83		$	107		$	171		$	111			$	272		$	389
ROE
Net income (net income last 12 months to stockholders' equity including AOCI)	2.1		%	2.0		%	3.7		%	4.9		%	6.5		%	5.2		%	(4.1		)%
Less: Unlock benefit (charge), before tax	1.0		%	0.5		%	0.9		%	1.1		%	0.7		%	(0.8		)%	(1.1		)%
Less: Net realized capital gains (losses) after DAC, excluded from core earnings, before tax	(3.9		)%	(3.7		)%	(3.7		)%	(2.5		)%	(0.8		)%	(0.3		)%	(0.5		)%
Less: Net reinsurance gain on dispositions, before tax	—		%	0.3		%	0.4		%	0.4		%	0.7		%	0.4		%	0.3		%
Less: Income tax benefit (expense) on items not included in core earnings	1.0		%	1.0		%	0.8		%	0.3		%	(0.2		)%	0.2		%	0.4		%
Less: Income from discontinued operations, after-tax	—		%	—		%	—		%	—		%	0.5		%	0.4		%	(7.5		)%
Less: Impact of AOCI, excluded from Core ROE	(0.7		)%	(0.6		)%	(0.7		)%	(0.6		)%	(0.8		)%	(0.6		)%	(0.7		)%
Core earnings (core earnings last 12 months to stockholders' equity excluding AOCI)	4.7		%	4.5		%	6.0		%	6.2		%	6.4		%	5.9		%	5.0		%
Return on Assets (bps, after tax) [2]
Net income return on assets	26.6			60.7			30.3			5.3			34.0			95.6			58.5				38.8			64.6
Core earnings return on assets *	54.9			55.1			47.4			53.3			60.0			90.8			54.5				51.8			70.0

[1]	The three months ended September 30, 2015 and June 30, 2015 included a tax provision of $12 and a tax benefit of $48 due to uncertain tax positions.

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

* Denotes financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP).

23

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

TALCOTT RESOLUTION

INDIVIDUAL ANNUITY

SUPPLEMENTAL DATA

	THREE MONTHS ENDED															NINE MONTHS ENDED
	Sept 30 2016		Jun 30 2016		Mar 31 2016		Dec 31 2015		Sept 30 2015		Jun 30 2015		Mar 31 2015			Sept 30 2016		Sept 30 2015
FULL SURRENDER RATES [1]
Variable Annuity	7.4	%	7.7	%	6.7	%	8.3	%	9.1	%	9.9	%	10.9	%		7.2	%	10.3	%
Fixed Annuity and Other	5.4	%	5.1	%	4.4	%	8.6	%	12.1	%	7.3	%	6.2	%		5.0	%	8.6	%
CONTRACT COUNTS (in thousands)
Variable Annuity	557		571		587		603		618		634		653
Fixed Annuity and Other	123		125		127		128		130		134		137

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

	AS OF:
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015
VARIABLE ANNUITY DEATH AND LIVING BENEFITS
S&P 500 index value at end of period	2,168			2,099			2,060			2,044			1,920			2,063			2,068
Total account value with guaranteed minimum death benefits (“GMDB”)	$	41,696		$	41,738		$	42,500		$	44,245		$	44,464		$	49,359		$	51,500
Gross net amount at risk ("NAR")	$	3,404		$	3,885		$	4,262		$	4,198		$	5,027		$	3,719		$	3,683
NAR reinsured	79		%	75		%	73		%	74		%	70		%	79		%	80		%
Contracts in the Money [3]	31		%	48		%	56		%	55		%	60		%	33		%	20		%
% In the Money [3] [4]	13		%	10		%	9		%	9		%	11		%	10		%	16		%
Retained NAR [2]	$	730		$	965		$	1,149		$	1,105		$	1,513		$	784		$	733
Net GAAP liability for GMDB benefits	$	175		$	178		$	184		$	190		$	193		$	184		$	183
Total account value with guaranteed minimum withdrawal benefits (“GMWB”)	$	18,869		$	18,952		$	19,384		$	20,194		$	20,441		$	22,816		$	23,995
Gross NAR	$	195		$	240		$	267		$	248		$	306		$	168		$	152
NAR reinsured	38		%	35		%	34		%	33		%	31		%	31		%	28		%
Contracts in the Money [3]	7		%	10		%	11		%	11		%	13		%	7		%	6		%
% In the Money [3] [4]	12		%	10		%	10		%	9		%	9		%	11		%	12		%
Retained NAR [2]	$	121		$	155		$	177		$	167		$	212		$	116		$	109
Net GAAP liability for non-lifetime GMWB benefits	$	238		$	296		$	254		$	174		$	194		$	54		$	99
Net GAAP liability for lifetime GMWB benefits	$	156		$	156		$	150		$	149		$	108		$	105		$	140

[2] 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.

[3] Excludes contracts that are fully reinsured.

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

24

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

TALCOTT RESOLUTION

INDIVIDUAL ANNUITY

ACCOUNT VALUE ROLLFORWARD

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
VARIABLE ANNUITY
Beginning balance	$	41,738		$	42,500		$	44,245		$	44,464		$	49,359		$	51,500		$	52,861			$	44,245		$	52,861
Deposits	37			40			42			45			43			52			49				119			144
Partial withdrawals	(344		)	(379		)	(410		)	(517		)	(432		)	(487		)	(498		)		(1,133		)	(1,417		)
Full surrenders	(772		)	(813		)	(728		)	(920		)	(1,065		)	(1,250		)	(1,426		)		(2,313		)	(3,741		)
Death benefits/annuitizations/other [1]	(338		)	(344		)	(370		)	(356		)	(361		)	(394		)	(421		)		(1,052		)	(1,176		)
Net flows	(1,417		)	(1,496		)	(1,466		)	(1,748		)	(1,815		)	(2,079		)	(2,296		)		(4,379		)	(6,190		)
Change in market value/change in reserve/interest credited and other	1,375			734			(279		)	1,529			(3,080		)	(62		)	935				1,830			(2,207		)
Ending balance	$	41,696		$	41,738		$	42,500		$	44,245		$	44,464		$	49,359		$	51,500			$	41,696		$	44,464
FIXED MARKET VALUE ADJUSTED (“MVA”) AND OTHER
Beginning balance	$	7,901		$	8,014		$	8,109		$	8,272		$	8,516		$	8,666		$	8,748			$	8,109		$	8,748
Surrenders	(83		)	(86		)	(76		)	(147		)	(189		)	(122		)	(108		)		(245		)	(419		)
Death benefits/annuitizations/other [1]	(105		)	(98		)	(86		)	(102		)	(85		)	(92		)	(82		)		(289		)	(259		)
Transfers	—			—			—			(1		)	(1		)	(3		)	36				—			32
Net flows	(188		)	(184		)	(162		)	(250		)	(275		)	(217		)	(154		)		(534		)	(646		)
Change in market value/change in reserve/interest credited and other	79			71			67			87			31			67			72				217			170
Ending balance	$	7,792		$	7,901		$	8,014		$	8,109		$	8,272		$	8,516		$	8,666			$	7,792		$	8,272
TOTAL INDIVIDUAL ANNUITY
Beginning balance	$	49,639		$	50,514		$	52,354		$	52,736		$	57,875		$	60,166		$	61,609			$	52,354		$	61,609
Deposits	37			40			42			45			43			52			49				119			144
Surrenders and partial withdrawals	(1,199		)	(1,278		)	(1,214		)	(1,584		)	(1,686		)	(1,859		)	(2,032		)		(3,691		)	(5,577		)
Death benefits/annuitizations/other [1]	(443		)	(442		)	(456		)	(458		)	(446		)	(486		)	(503		)		(1,341		)	(1,435		)
Transfers	—			—			—			(1		)	(1		)	(3		)	36				—			32
Net flows	(1,605		)	(1,680		)	(1,628		)	(1,998		)	(2,090		)	(2,296		)	(2,450		)		(4,913		)	(6,836		)
Change in market value/change in reserve/interest credited and other	1,454			805			(212		)	1,616			(3,049		)	5			1,007				2,047			(2,037		)
Ending balance	$	49,488		$	49,639		$	50,514		$	52,354		$	52,736		$	57,875		$	60,166			$	49,488		$	52,736

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

25

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CORPORATE

INCOME STATEMENTS

 

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Fee income	$	1		$	1		$	1		$	2		$	1		$	3		$	2			$	3		$	6
Net investment income	6			6			11			5			5			4			3				23			12
Net realized capital gains (losses)	(1		)	(1		)	(4		)	(2		)	(3		)	2			18				(6		)	17
Total revenues	6			6			8			5			3			9			23				20			35
Insurance operating costs and other expenses	6			(1		)	6			6			9			11			7				11			27
Loss on extinguishment of debt	—			—			—			—			—			21			—				—			21
Interest expense	86			85			86			86			88			89			94				257			271
Restructuring and other costs	—			—			—			4			4			2			10				—			16
Total expenses	92			84			92			96			101			123			111				268			335
Loss before income taxes	(86		)	(78		)	(84		)	(91		)	(98		)	(114		)	(88		)		(248		)	(300		)
Income tax benefit [1]	(31		)	(82		)	(55		)	(64		)	(95		)	(43		)	(31		)		(168		)	(169		)
Net income (loss)	(55		)	4			(29		)	(27		)	(3		)	(71		)	(57		)		(80		)	(131		)
Less: Net realized capital gains (losses) after DAC, excluded from core losses, before tax	1			(2		)	(4		)	(1		)	(5		)	2			18				(5		)	15
Less: Restructuring and other costs, before tax	—			—			—			(4		)	(4		)	(2		)	(10		)		—			(16		)
Less: Loss on extinguishment of debt, before tax	—			—			—			—			—			(21		)	—				—			(21		)
Less: Income tax benefit (expense) on items not included in core earnings	(2		)	56			26			34			69			3			(3		)		80			69
Core losses	$	(54	)	$	(50	)	$	(51	)	$	(56	)	$	(63	)	$	(53	)	$	(62	)		$	(155	)	$	(178	)

[1] The three months ended June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively, included federal income tax benefits of $53, $25, $34 and $60, respectively, from the reduction of the deferred tax valuation allowance on capital loss carryovers.

26

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT EARNINGS BEFORE TAX

CONSOLIDATED

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Net Investment Income
Fixed maturities [1]
Taxable	$	483		$	498		$	488		$	490		$	497		$	490		$	485			$	1,469		$	1,472
Tax-exempt	106			106			107			108			111			113			115				319			339
Total fixed maturities	$	589		$	604		$	595		$	598		$	608		$	603		$	600			$	1,788		$	1,811
Equity securities, available-for-sale	5			6			11			6			8			5			6				22			19
Mortgage loans	62			60			60			60			67			71			69				182			207
Policy loans	20			20			22			22			20			20			20				62			60
Limited partnerships and other alternative investments [2]	93			40			8			12			22			94			99				141			215
Other [3]	29			34			27			32			33			31			42				90			106
Subtotal	798			764			723			730			758			824			836				2,285			2,418
Investment expense	(26		)	(29		)	(27		)	(35		)	(28		)	(28		)	(27		)		(82		)	(83		)
Total net investment income	$	772		$	735		$	696		$	695		$	730		$	796		$	809			$	2,203		$	2,335
Annualized investment yield, before tax [4]	4.5		%	4.2		%	4.0		%	3.9		%	4.1		%	4.5		%	4.5		%		4.2		%	4.4		%
Annualized limited partnerships and other alternative investment yield, before tax [4]	15.2		%	6.1		%	1.2		%	1.5		%	2.9		%	12.9		%	13.7		%		7.3		%	10.0		%
Annualized investment yield, before tax, excluding limited partnership and other alternative investments [4]	4.1		%	4.1		%	4.1		%	4.1		%	4.2		%	4.1		%	4.1		%		4.1		%	4.1		%
Annualized investment yield, after-tax [4]	3.1		%	3.0		%	2.8		%	2.8		%	2.8		%	3.1		%	3.1		%		2.9		%	3.0		%
Average reinvestment rate [5]	3.2		%	3.2		%	3.8		%	3.4		%	3.7		%	3.5		%	3.1		%		3.4		%	3.4		%
Average sales/maturities yield [6]	3.9		%	4.0		%	4.3		%	3.4		%	3.9		%	3.6		%	4.1		%		4.1		%	4.0		%
Portfolio duration (in years) [7]	5.8			5.8			5.8			5.5			5.4			5.5			5.4				5.8			5.4

[1]	Includes income on short-term bonds.

[2]	Limited partnerships include hedge funds and a fund of funds; alternative investments include income on real estate joint ventures and hedge fund investments outside of limited partnerships and limited liability companies.

[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 securities lending collateral, if any, and derivatives book value.

[5]	Represents the annualized yield on fixed maturities and mortgage loans that were purchased during the respective period. Excludes U.S. Treasury securities, cash equivalent securities, and repurchase agreement and securities lending collateral, if any.

[6]	Represents the annualized 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, cash equivalent securities, and repurchase agreement and securities lending collateral, if any.

[7]	Excludes certain short-term securities and derivative instruments related to hedging U.S. variable annuity liabilities.

27

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT EARNINGS BEFORE TAX

PROPERTY & CASUALTY

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Net Investment Income
Fixed maturities [1]
Taxable	$	166		$	168		$	169		$	164		$	157		$	161		$	165			$	503		$	483
Tax-exempt	82			82			84			84			86			88			90				248			264
Total fixed maturities	$	248		$	250		$	253		$	248		$	243		$	249		$	255			$	751		$	747
Equity securities, available-for-sale	3			3			4			3			4			3			2				$	10		9
Mortgage loans	20			19			19			19			20			19			18				$	58		57
Limited partnerships and other alternative investments [2]	36			23			6			9			5			39			53				$	65		97
Other [3]	9			9			2			5			5			8			10				$	20		23
Subtotal	316			304			284			284			277			318			338				904			933
Investment expense	(11		)	(12		)	(12		)	(14		)	(10		)	(11		)	(11		)		$	(35	)	(32		)
Total net investment income	$	305		$	292		$	272		$	270		$	267		$	307		$	327			$	869		$	901
Annualized investment yield, before tax [4]	4.1		%	3.9		%	3.7		%	3.7		%	3.6		%	4.2		%	4.5		%		3.9		%	4.1		%
Annualized limited partnerships and other alternative investment yield, before tax [4]	11.4		%	6.9		%	1.7		%	2.2		%	1.3		%	10.1		%	14.1		%		6.5		%	8.6		%
Annualized investment yield, before tax, excluding limited partnership and other alternative investments [4]	3.8		%	3.8		%	3.8		%	3.7		%	3.7		%	3.9		%	4.0		%		3.8		%	3.9		%
Annualized investment yield, after-tax [4]	3.0		%	2.9		%	2.7		%	2.8		%	2.7		%	3.1		%	3.3		%		2.9		%	3.0		%
Average reinvestment rate [5]	3.1		%	3.1		%	3.8		%	3.6		%	3.8		%	3.7		%	3.4		%		3.4		%	3.6		%
Average sales/maturities yield [6]	4.0		%	3.9		%	4.5		%	3.4		%	4.2		%	4.1		%	4.3		%		4.1		%	4.2		%
Portfolio duration (in years) [7]	5.0			5.1			5.2			5.0			4.9			5.0			4.8				5.0			4.9

Footnotes [1] through [7] are explained on page 27.

28

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NET INVESTMENT INCOME

CONSOLIDATED

	THREE MONTHS ENDED																						NINE MONTHS ENDED
Net Investment Income by Segment	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Net Investment Income
Commercial Lines	$	239		$	226		$	209		$	206		$	208		$	239		$	257			$	674		$	704
Personal Lines	35			33			31			30			29			34			35				99			98
P&C Other Operations	31			33			32			34			30			34			35				96			99
Total Property & Casualty	$	305		$	292		$	272		$	270		$	267		$	307		$	327			$	869		$	901
Group Benefits	95			88			88			88			91			95			97				271			283
Mutual Funds	—			1			—			1			—			—			—				1			—
Talcott Resolution	366			348			325			331			367			390			382				1,039			1,139
Corporate	6			6			11			5			5			4			3				23			12
Total net investment income by segment	$	772		$	735		$	696		$	695		$	730		$	796		$	809			$	2,203		$	2,335
	THREE MONTHS ENDED																						NINE MONTHS ENDED
Net Investment Income From Limited Partnerships and Other Alternative Investments	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Total Property & Casualty	$	36		$	23		$	6		$	9		$	5		$	39		$	53			$	65		$	97
Group Benefits	10			4			3			2			8			8			6				17			22
Talcott Resolution	47			13			(1		)	1			9			47			40				59			96
Total net investment income from limited partnerships and other alternative investments [1]	$	93		$	40		$	8		$	12		$	22		$	94		$	99			$	141		$	215

[1] Amounts are included above in total net investment income by segment.

29

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)

CONSOLIDATED

	THREE MONTHS ENDED																						NINE MONTHS ENDED
	Sept 30 2016			Jun 30 2016			Mar 31 2016			Dec 31 2015			Sept 30 2015			Jun 30 2015			Mar 31 2015				Sept 30 2016			Sept 30 2015
Net Realized Capital Gains (Losses)
Gross gains on sales	$	114		$	124		$	90		$	59		$	83		$	121		$	197			$	328		$	401
Gross losses on sales	(24		)	(25		)	(108		)	(72		)	(73		)	(112		)	(148		)		(157		)	(333		)
Net impairment losses	(14		)	(7		)	(23		)	(39		)	(40		)	(11		)	(12		)		(44		)	(63		)
Valuation allowances on mortgage loans	—			—			—			(3		)	1			—			(3		)		—			(2		)
Periodic net coupon settlements on credit derivatives	2			—			—			3			3			4			1				2			8
Results of variable annuity hedge program
GMWB derivatives, net	6			3			(17		)	(52		)	(32		)	(4		)	1				(8		)	(35		)
Macro hedge	(64		)	(20		)	(14		)	(70		)	51			(23		)	(4		)		(98		)	24
Total results of variable annuity hedge program	(58		)	(17		)	(31		)	(122		)	19			(27		)	(3		)		(106		)	(11		)
Other net gains (losses) [1] [2]	(37		)	(22		)	(83		)	48			(37		)	34			(27		)		(142		)	(30		)
Total net realized capital gains (losses)	$	(17	)	$	53		$	(155	)	$	(126	)	$	(44	)	$	9		$	5			$	(119	)	$	(30	)
Less: Impacts of DAC	(5		)	—			(7		)	5			1			(1		)	—				(12		)	—
Less: Realized gains, included in core earnings, before tax	1			2			—			4			4			4			2				3			10
Total net realized capital gains (losses) after DAC, excluded from core earnings, before tax	(13		)	51			(148		)	(135		)	(49		)	6			3				(110		)	(40		)
Less: Impacts of tax [3]	(46		)	21			(52		)	(45		)	(19		)	2			1				(77		)	(16		)
Total net realized capital gains (losses), net of tax and DAC, excluded from core earnings	$	33		$	30		$	(96	)	$	(90	)	$	(30	)	$	4		$	2			$	(33	)	$	(24	)

[1]	Apart from the third quarter 2016 estimated loss discussed in note 2 below, primarily consists of changes in value of non-qualifying derivatives, including credit derivatives, interest rate derivatives used to manage duration, embedded derivatives associated with modified coinsurance reinsurance contracts and the fixed payout annuity hedge.

[2]	The three months ended September 30, 2016 included an estimated capital loss on sale of the Company's U.K. property and casualty run-off subsidiaries of $59, before tax.

[3]	The three months ended September 30, 2016 included an estimated federal income tax benefit of $65 on the sale of the Company's U.K. property and casualty run-off subsidiaries.

30

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPOSITION OF INVESTED ASSETS

CONSOLIDATED

	Sept 30 2016					Jun 30 2016					Mar 31 2016					Dec 31 2015					Sept 30 2015
	Amount [1]			Percent		Amount			Percent		Amount			Percent		Amount			Percent		Amount [1]			Percent
Total investments	$	73,719		100.0	%	$	75,144		100.0	%	$	73,910		100.0	%	$	72,728		100.0	%	$	74,405		100.0	%
Asset-backed securities	$	2,685		4.5	%	$	2,777		4.5	%	$	2,665		4.4	%	$	2,499		4.2	%	$	2,716		4.6	%
Collateralized debt obligations	2,573			4.3	%	2,867			4.7	%	3,107			5.1	%	3,038			5.1	%	3,031			5.1	%
Commercial mortgage-backed securities	5,268			8.7	%	5,195			8.5	%	5,224			8.6	%	4,717			8.0	%	4,542			7.7	%
Corporate	26,904			44.6	%	27,158			44.4	%	27,297			45.0	%	26,802			45.3	%	26,772			45.3	%
Foreign government/government agencies	1,186			2.0	%	1,188			1.9	%	1,189			2.0	%	1,308			2.2	%	1,255			2.1	%
Municipal	12,594			20.9	%	12,611			20.6	%	12,303			20.3	%	12,121			20.5	%	12,211			20.7	%
Residential mortgage-backed securities	4,936			8.2	%	4,826			7.9	%	4,338			7.1	%	4,046			6.8	%	3,859			6.5	%
U.S. Treasuries	4,079			6.8	%	4,619			7.5	%	4,570			7.5	%	4,665			7.9	%	4,723			8.0	%
Total fixed maturities, available-for-sale	$	60,225		100.0	%	$	61,241		100.0	%	$	60,693		100.0	%	$	59,196		100.0	%	$	59,109		100.0	%
U.S. government/government agencies	$	8,225		13.6	%	$	8,887		14.5	%	$	8,316		13.7	%	$	8,179		13.8	%	$	8,167		13.8	%
AAA	7,693			12.8	%	7,883			12.9	%	7,771			12.8	%	7,195			12.2	%	7,444			12.6	%
AA	10,342			17.2	%	10,600			17.3	%	10,726			17.7	%	10,584			17.9	%	10,400			17.6	%
A	15,804			26.2	%	15,898			25.9	%	15,631			25.7	%	15,128			25.5	%	15,687			26.5	%
BBB	14,657			24.3	%	14,739			24.1	%	14,968			24.7	%	14,918			25.2	%	14,215			24.1	%
BB	2,089			3.5	%	2,094			3.4	%	2,123			3.5	%	1,983			3.3	%	1,881			3.2	%
B	1,092			1.8	%	915			1.5	%	967			1.6	%	1,034			1.8	%	1,110			1.9	%
CCC	281			0.5	%	171			0.3	%	131			0.2	%	116			0.2	%	141			0.2	%
CC & below	42			0.1	%	54			0.1	%	60			0.1	%	59			0.1	%	64			0.1	%
Total fixed maturities, available-for-sale	$	60,225		100.0	%	$	61,241		100.0	%	$	60,693		100.0	%	$	59,196		100.0	%	$	59,109		100.0	%

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

31

---

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTED ASSET EXPOSURES

September 30, 2016

	Cost or Amortized Cost			Fair Value			Percent of Total Invested Assets
Top Ten Corporate Fixed Maturity and Equity Exposures by Sector, Available-for-sale
Financial services	$	5,166		$	5,550		7.5	%
Utilities	4,934			5,433			7.4	%
Consumer non-cyclical	3,895			4,282			5.8	%
Technology and communications	3,499			3,906			5.3	%
Energy [1]	2,002			2,172			2.9	%
Consumer cyclical	1,844			1,982			2.7	%
Capital goods	1,598			1,756			2.4	%
Basic industry	1,131			1,225			1.7	%
Transportation	840			912			1.2	%
Other	518			561			0.8	%
Total	$	25,427		$	27,779		37.7	%
Top Ten Exposures by Issuer [2]
Morgan Stanley	$	297		$	311		0.4	%
State of California	264			306			0.4	%
Commonwealth of Massachusetts	249			279			0.4	%
Goldman Sachs Group Inc.	249			265			0.4	%
New York State Dormitory Authority	223			248			0.4	%
JP Morgan Chase & Co.	233			244			0.3	%
American Electric Power Company Inc.	225			240			0.3	%
National Grid plc	195			229			0.3	%
Mars Inc.	216			222			0.3	%
Wells Fargo & Company	222			221			0.3	%
Total	$	2,373		$	2,565		3.5	%

[1]	Excludes investments in foreign government, government agency securities or other fixed maturities that are correlated to energy exposure but are not direct obligations of or exposures to energy-related companies.

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

32

---

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: Commercial Lines, Personal Lines, Property & Casualty Other Operations ("P&C Other Operations"), Group Benefits, Mutual Funds and Talcott Resolution, as well as a Corporate category.

Property & Casualty ("P&C") businesses consist of three reporting segments: Commercial Lines, Personal Lines and P&C Other Operations. Commercial Lines provides businesses with workers' compensation, property, automobile, liability, umbrella, marine and livestock 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. On July 29, 2016, the Company acquired Maxum Specialty Insurance Group ("Maxum") adding excess and surplus lines capability. Maxum's revenues and earnings since the acquisition date are included in the results of operations of the Company's Commercial Lines operating segment. Additionally, within Commercial Lines, a variety of customized insurance products and risk management services including workers' compensation, automobile, general liability, professional liability, bond, and specialty casualty coverages are offered through the segment's specialty commercial lines. Personal Lines provides automobile, homeowners and personal umbrella 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, managed by the Company, that have discontinued writing new business and substantially all of the Company's asbestos and environmental exposures.

Group Benefits provides group life, accident and disability coverage, group retiree health and voluntary benefits to individual members of employer groups and associations. Group Benefits offers disability underwriting, administration, claims processing and reinsurance to other insurers and self-funded employer plans.

Mutual Funds provides investment management, administration, distribution and related services to investors through investment products in both domestic and international markets. Mutual fund and exchange-traded funds are sold primarily through retail, bank trust and registered investment advisor channels. On July 29, 2016, the Company acquired Lattice Strategies LLC ("Lattice"), an investment management firm and provider of strategic beta exchange-traded funds. Lattice's revenues and earnings since the acquisition date are included in the results of operations of the Company's Mutual Funds operating segment. Talcott funds included in Total Mutual Funds segment assets under management represent assets held in separate accounts supporting the Company's legacy variable insurance products.

Talcott Resolution is comprised of the runoff of the Company's U.S. annuity and institutional and private-placement life insurance businesses, and the retained Japan fixed payout annuity liabilities.

Corporate includes the Company's capital raising activities (including debt financing and related interest expense), purchase accounting adjustments related to goodwill, and other expenses not allocated to the reporting 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 and earned 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 and insurance operating costs and expenses, including certain centralized services and bad debt expense) 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, expenses and policyholder dividends 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 prior accident year loss and loss adjustment expense ratio (a component of the loss ratio) represents the increase (decrease) in the estimated cost of settling catastrophe and non-catastrophe claims incurred in prior accident years as recorded in the current calendar year divided by 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 benefits, losses and loss adjustment expenses to premiums and other considerations, excluding buyout premiums. The expense ratio is the ratio of insurance operating costs and other expenses to premiums and other considerations, excluding buyout premiums. Buyout premiums represent takeover of open claim liabilities and other non-recurring premium amounts.

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. 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. Non-GAAP measures are indicated with an asterisk the first time they appear in this document.

The Company uses the non-GAAP financial measure core earnings as an important measure of the Company's operating performance. The Company believes that core earnings provides investors with a valuable measure of the performance of the Company's 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, certain restructuring and other costs, loss on extinguishment of debt, reinsurance gains and losses from disposal of businesses, income tax benefit from reduction in deferred income tax valuation allowance, discontinued operations, and the impact of Unlocks to deferred policy acquisition costs (“DAC”), sales inducement assets ("SIA") 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. The Company believes, 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 U.S. 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, the Company believes that it is useful for investors to evaluate both net income and core earnings when reviewing the Company's performance. A reconciliation of net income to core earnings is set forth on page 2.

33

---

Core earnings per share is calculated based on the non-GAAP financial measure core earnings. The Company believes 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 U.S. 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, the Company believes that it is useful for investors to evaluate both net income per share and core earnings per share when reviewing our performance.

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. The Company believes 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 U.S. GAAP measure. A reconciliation of book value per diluted share to book value per diluted share, excluding AOCI, is set forth on page 1.

The Company provides different measures of the return on stockholders' equity (“ROE”). ROE - Core earnings is calculated based on non-GAAP financial measures. ROE - Core earnings is calculated by dividing (a) core earnings for the prior four fiscal quarters by (b) average common stockholders' equity, excluding AOCI. ROE - Net income is the most directly comparable U.S. GAAP measure. ROE - Net income is calculated by dividing (a) net income for the prior four fiscal quarters by (b) average common stockholders' equity, including AOCI. ROEs at the segment level and for consolidated, excluding Talcott Resolution, represent a levered view of ROE as debt financing and related interest expense are attributed to the businesses consistent with the overall average debt to capitalization ratios of the consolidated entity. The Company excludes AOCI in the calculation of ROE - core earnings 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. The Company provides investors with return-on-equity measures based on its non-GAAP core earnings financial measures for the reasons set forth in the related discussion above.

A reconciliation of Consolidated ROE - Net income to Consolidated ROE - Core earnings is set forth below:

	LAST TWELVE MONTHS ENDED
	Sept 30 2016		Jun 30 2016		Mar 31 2016		Dec 31 2015		Sept 30 2015		Jun 30 2015		Mar 31 2015
ROE - Net income	7.6	%	7.3	%	8.3	%	9.3	%	8.9	%	8.8	%	4.0	%
Less: Unlock benefit (charge), before tax	0.4	%	0.2	%	0.3	%	0.4	%	0.3	%	(0.3	)%	(0.4	)%
Less: Net realized capital gains (losses) including DAC, excluded from core earnings, before tax [2]	(1.3	)%	(1.5	)%	(1.8	)%	(1.0	)%	(0.3	)%	0.2	%	0.1	%
Less: Restructuring and other costs, before tax	—	%	—	%	(0.1	)%	(0.1	)%	(0.2	)%	(0.3	)%	(0.3	)%
Less: Loss on extinguishment of debt, before tax	—	%	—	%	(0.1	)%	(0.1	)%	(0.1	)%	(0.1	)%	—	%
Less: Net reinsurance gain on dispositions, before tax	—	%	0.1	%	0.2	%	0.2	%	0.3	%	0.2	%	0.1	%
Less: Pension settlement, before tax	—	%	—	%	—	%	—	%	(0.7	)%	(0.7	)%	(0.7	)%
Less: Income tax benefit (expense) on items not included in core earnings	1.1	%	1.4	%	1.1	%	0.7	%	0.6	%	0.4	%	0.4	%
Less: Income from discontinued operations, after-tax	—	%	—	%	—	%	—	%	0.2	%	0.2	%	(3.0	)%
Less: Impact of AOCI, excluded from denominator of Core ROE	(0.2	)%	(0.3	)%	(0.1	)%	—	%	(0.3	)%	(0.4	)%	(0.3	)%
ROE - Core earnings	7.6	%	7.4	%	8.8	%	9.2	%	9.1	%	9.6	%	8.1	%

A reconciliation of Consolidated ROE - Net income, excluding Talcott Resolution to Consolidated ROE - Core earnings, excluding Talcott Resolution is set forth below:

	LAST TWELVE MONTHS ENDED
	Sept 30 2016		Jun 30 2016		Mar 31 2016		Dec 31 2015		Sept 30 2015		Jun 30 2015		Mar 31 2015
ROE - Net income (excluding Talcott Resolution)	10.8	%	10.5	%	11.0	%	12.0	%	10.3	%	11.3	%	9.3	%
Less: Net realized capital gains (losses) including DAC, excluded from core earnings, before tax [2]	—	%	(0.2	)%	(0.6	)%	—	%	—	%	0.5	%	0.5	%
Less: Restructuring and other costs, before tax	0.2	%	(0.1	)%	(0.1	)%	(0.2	)%	(0.4	)%	(0.5	)%	(0.6	)%
Less: Loss on extinguishment of debt, before tax	—	%	—	%	(0.2	)%	(0.2	)%	(0.2	)%	(0.2	)%	—	%
Less: Pension settlement, before tax	—	%	—	%	—	%	—	%	(1.1	)%	(1.2	)%	(1.1	)%
Less: Income tax benefit (expense)	1.2	%	1.6	%	1.3	%	1.0	%	1.1	%	0.5	%	0.4	%
Less: Income from discontinued operations, after-tax	—	%	0.1	%	0.1	%	0.1	%	0.1	%	0.1	%	0.1	%
Less: Impact of AOCI, excluded from denominator of Core ROE	0.3	%	0.2	%	0.2	%	0.4	%	0.3	%	0.2	%	0.1	%
ROE - Core earnings (excluding Talcott Resolution)	9.1	%	8.9	%	10.3	%	10.9	%	10.5	%	11.9	%	9.9	%

34

---

The Company evaluates profitability of the individual 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 and policyholder dividends. 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 pricing and 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 its management of acquisition costs and other underwriting expenses. Net income (loss) is the most directly comparable U.S. GAAP measure. The Company believes 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. Reconciliations of underwriting gain (loss) to net income for the Company's P&C businesses are set forth on pages 8, 10, 14 and 18.

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.

Combined ratio before catastrophes and prior accident year development ("PYD") (also referred to as Current Accident Year ("CAY") combined ratio before catastrophes) is a non-GAAP financial measure. Combined ratio is the most directly comparable GAAP measure. The combined ratio before catastrophes and PYD represents the combined ratio for the current accident year, excluding the impact of current accident year catastrophes. The Company believes this ratio is an important measure of the trend in profitability since it removes the impact of volatile and unpredictable catastrophe losses and prior accident year loss and loss adjustment expense reserve development. A reconciliation of the combined ratio to the combined ratio before catastrophes and PYD for Commercial Lines and Personal Lines is set forth on pages 12 and 15, respectively.

Core earnings margin 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. Core earnings margin is calculated by dividing core earnings by revenues excluding buyouts and realized gains (losses). Net income margin is the most directly comparable U.S. GAAP measure. The Company believes that core earnings margin provides investors with a valuable measure of the performance of Group Benefits because it reveals trends in the business that may be obscured by the effect of buyouts and realized gains (losses). Core earnings margin should not be considered as a substitute for net income margin and does not reflect the overall profitability of Group Benefits. Therefore, the Company believes it is important for investors to evaluate both core earnings margin and net income margin when reviewing performance.

Return on Assets ("ROA"), core earnings, is a non-GAAP financial measure that the Company uses to evaluate the Mutual Funds and Talcott Resolution (Individual Annuity) segments' operating performance. ROA is the most directly comparable U.S. GAAP measure. The Company believes 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, the Company believes it is important for investors to evaluate both ROA, core earnings, and ROA when reviewing the Company's performance.

35