Exhibit

EX-99.2 3 ex992ifs93018.htm EXHIBIT 99.2 Exhibit

INVESTOR FINANCIAL SUPPLEMENT

September 30, 2018

On December 3, 2017, The Hartford entered into an agreement to sell its life and annuity run-off business (formerly known as Talcott Resolution). The transaction closed on May 31, 2018. The assets and liabilities of this business had been accounted for as held for sale until closing and operating results of the life and annuity business are included in discontinued operations for all periods prior to the closing date.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.




	As of October 23, 2018
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
	Maxum Casualty Insurance Company	A+	NR	NR
	Maxum Indemnity Company	A+	NR	NR

	- Hartford Fire Insurance Company ratings are on stable outlook at A.M. Best, Moody’s, and Standard and Poor’s
	- Hartford Life and Accident Insurance Company ratings are on stable outlook at A.M. Best, Moody’s, and Standard and Poor’s
Internet address:	- Maxum Casualty Insurance Company ratings are on stable outlook at A.M. Best
http://www.thehartford.com	- Maxum Indemnity Company ratings are on stable outlook at A.M. Best

	Other Ratings:
	The Hartford Financial Services Group, Inc.:
	Senior debt	a-	BBB+	Baa1
Contacts:	Commercial paper	AMB-1	A-2	P-2
Sabra Purtill	Junior subordinated debentures	bbb	BBB-	Baa2
Senior Vice President
Investor Relations & Treasurer	- Hartford Financial Services Group, Inc. senior debt and junior subordinated debentures are on stable outlook at A.M. Best, Standard and Poor’s, and Moody's.
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 505000	462 South 4th Street, Suite 1600
	Louisville, KY 40233	Louisville, KY 40202

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 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	16
	Personal Lines Supplemental Data	17
	P&C Other Operations Income Statements	19

GROUP BENEFITS	Income Statements	20
	Supplemental Data	21

MUTUAL FUNDS	Income Statements	22
	Asset Value Rollforward - Assets Under Management By Asset Class	23


CORPORATE	Income Statements	24

INVESTMENTS	Investment Earnings Before Tax - Consolidated	25
	Investment Earnings Before Tax - Property & Casualty	26
	Investment Earnings Before Tax - Group Benefits	27
	Net Investment Income	28
	Components of Net Realized Capital Gains (Losses)	29
	Composition of Invested Assets	30
	Invested Asset Exposures	31

APPENDIX	Basis of Presentation and Definitions	32
	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 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018		Sept 30 2017
HIGHLIGHTS
Net income (loss)	$	432		$	582		$	597		$	(3,703	)	$	234		$	(40	)	$	378		$	1,611	$	572
Core earnings *	$	418		$	412		$	461		$	293		$	130		$	303		$	288		$	1,291	$	721
Total revenues	$	4,842		$	4,789		$	4,691		$	4,587		$	4,192		$	4,214		$	4,169		$	14,322	$	12,575
Total assets	$61,437			$60,775			$216,666			$225,260			$224,901			$226,562			$226,094
PER SHARE AND SHARES DATA
Basic earnings per common share
Income (loss) from continuing operations	$	1.19		$	1.21		$	1.20		$	(1.56	)	$	0.40		$	(0.42	)	$	0.82		$	3.60	$	0.81
Net income (loss)	$	1.20		$	1.62		$	1.67		$	(10.37	)	$	0.65		$	(0.11	)	$	1.02		$	4.50	$	1.56
Core earnings *	$	1.17		$	1.15		$	1.29		$	0.82		$	0.36		$	0.83		$	0.78		$	3.61	$	1.97
Diluted earnings per common share
Income (loss) from continuing operations	$	1.17		$	1.19		$	1.18		$	(1.56	)	$	0.40		$	(0.42	)	$	0.80		$	3.54	$	0.79
Net income (loss)	$	1.19		$	1.60		$	1.64		$	(10.37	)	$	0.64		$	(0.11	)	$	1.00		$	4.42	$	1.54
Core earnings *	$	1.15		$	1.13		$	1.27		$	0.81		$	0.35		$	0.81		$	0.76		$	3.55	$	1.94
Weighted average common shares outstanding (basic)	358.6			358.3			357.5			357.0			360.2			366.0			371.4			358.1		365.9
Dilutive effect of stock compensation	3.6			4.0			4.4			4.8			4.5			3.8			4.2			4.0		4.1
Dilutive effect of warrants	1.9			1.9			2.0			2.1			2.3			2.5			3.0			2.0		2.6
Weighted average common shares outstanding and dilutive potential common shares (diluted)	364.1			364.2			363.9			363.9			367.0			372.3			378.6			364.1		372.6
Common shares outstanding	358.7			358.4			358.1			356.8			357.5			362.8			369.2
Book value per common share	$	35.49		$	35.01		$	36.70		$	37.82		$	48.20		$	47.65		$	46.07
Per common share impact of accumulated other comprehensive income [1]	$	(4.23	)	$	(3.77	)	$	(0.67	)	$	1.86		$	1.63		$	1.36		$	(0.56	)
Book value per common share (excluding AOCI) *	$	39.72		$	38.78		$	37.37		$	35.96		$	46.57		$	46.29		$	46.63
Book value per diluted share	$	34.95		$	34.44		$	36.06		$	37.11		$	47.33		$	46.84		$	45.25
Per diluted share impact of AOCI	$	(4.17	)	$	(3.71	)	$	(0.65	)	$	1.82		$	1.61		$	1.34		$	(0.55	)
Book value per diluted share (excluding AOCI) *	$	39.12		$	38.15		$	36.71		$	35.29		$	45.72		$	45.50		$	45.80
Common shares outstanding and dilutive potential common shares	364.2			364.3			364.5			363.6			364.1			369.1			375.9
RETURN ON EQUITY ("ROE") [2]
Net income (loss) ROE	(14.0		%)	(15.4		%)	(19.3		%)	(20.6		%)	2.7		%	3.9		%	5.4		%
Core earnings ROE *	10.3		%	8.4		%	7.8		%	6.7		%	5.9		%	6.9		%	5.1		%


[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]	For reconciliations of net income (loss) ROE to core earnings ROE, see Appendix, page 33.

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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Earned premiums	$	3,987		$	3,958		$	3,927		$	3,801		$	3,447		$	3,455		$	3,438		$	11,872		$	10,340
Fee income	344			327			323			313			291			286			278			994			855
Net investment income	444			428			451			394			404			395			410			1,323			1,209
Realized capital gains (losses):
Total other-than-temporary impairment (“OTTI”) losses	(4		)	—			(2		)	(4		)	(4		)	(4		)	(3		)	(6		)	(11		)
OTTI losses recognized in other comprehensive income	3			—			2			—			3			2			2			5			7
Net OTTI losses recognized in earnings	(1		)	—			—			(4		)	(1		)	(2		)	(1		)	(1		)	(4		)
Other net realized capital gains (losses)	39			52			(30		)	64			27			57			25			61			109
Total net realized capital gains (losses)	38			52			(30		)	60			26			55			24			60			105
Other revenues	29			24			20			19			24			23			19			73			66
Total revenues	4,842			4,789			4,691			4,587			4,192			4,214			4,169			14,322			12,575
Benefits, losses and loss adjustment expenses	2,786			2,738			2,695			2,692			2,638			2,420			2,424			8,219			7,482
Amortization of deferred acquisition costs ("DAC")	348			344			342			342			341			345			344			1,034			1,030
Insurance operating costs and other expenses	1,091			1,067			1,037			1,042			952			1,650			919			3,195			3,521
Loss on extinguishment of debt	—			6			—			—			—			—			—			6			—
Interest expense	69			79			80			78			79			79			80			228			238
Amortization of other intangible assets	18			18			18			11			1			1			1			54			3
Total benefits, losses and expenses	4,312			4,252			4,172			4,165			4,011			4,495			3,768			12,736			12,274
Income (loss) before income taxes	530			537			519			422			181			(281		)	401			1,586			301
Income tax expense (benefit)	103			103			91			980			36			(129		)	98			297			5
Income (loss) from continuing operations, after tax	427			434			428			(558		)	145			(152		)	303			1,289			296
Income (loss) from discontinued operations, after tax [1]	5			148			169			(3,145		)	89			112			75			322			276
Net income (loss)	432			582			597			(3,703		)	234			(40		)	378			1,611			572
Less: Net realized capital gains (losses), excluded from core earnings, before tax	37			50			(30		)	59			25			53			23			57			101
Less: Loss on extinguishment of debt, before tax	—			(6		)	—			—			—			—			—			(6		)	—
Less: Pension settlement, before tax	—			—			—			—			—			(750		)	—			—			(750		)
Less: Integration and transaction costs associated with acquired business, before tax	(12		)	(11		)	(12		)	(17		)	—			—			—			(35		)	—
Less: Income tax benefit (expense) [2]	(16		)	(11		)	9			(893		)	(10		)	242			(8		)	(18		)	224
Less: Income (loss) from discontinued operations, after tax [1]	5			148			169			(3,145		)	89			112			75			322			276
Core earnings	$	418		$	412		$	461		$	293		$	130		$	303		$	288		$	1,291		$	721


[1]	The three months ended December 31, 2017 included an estimated loss on sale of $3.3 billion related to the sale of Talcott Resolution, the Company's life and annuity run-off business that was sold in May, 2018. The three months ended June 30, 2018 and March 31, 2018, included a reduction in loss on sale of $151 and $62, respectively.


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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

OPERATING RESULTS BY SEGMENT



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Net income (loss):
Commercial Lines	$	289		$	372		$	298		$	286		$	90		$	258		$	231		$	959		$	579
Personal Lines	51			6			89			(74		)	8			24			33			146			65
P&C Other Operations	9			5			17			7			18			20			24			31			62
Property & Casualty ("P&C")	349			383			404			219			116			302			288			1,136			706
Group Benefits	77			96			54			109			71			69			45			227			185
Mutual Funds	41			37			34			33			26			24			23			112			73
Sub-total	467			516			492			361			213			395			356			1,475			964
Corporate [1]	(35		)	66			105			(4,064		)	21			(435		)	22			136			(392		)
Net income (loss)	$	432		$	582		$	597		$	(3,703	)	$	234		$	(40	)	$	378		$	1,611		$	572

Core earnings (losses):
Commercial Lines	$	265		$	341		$	302		$	282		$	81		$	238		$	224		$	908		$	543
Personal Lines	47			2			89			(46		)	7			20			32			138			59
P&C Other Operations	8			3			17			4			18			18			21			28			57
P&C	320			346			408			240			106			276			277			1,074			659
Group Benefits	102			104			85			67			66			61			40			291			167
Mutual Funds	41			38			34			37			26			24			23			113			73
Sub-total	463			488			527			344			198			361			340			1,478			899
Corporate	(45		)	(76		)	(66		)	(51		)	(68		)	(58		)	(52		)	(187		)	(178		)
Core earnings	$	418		$	412		$	461		$	293		$	130		$	303		$	288		$	1,291		$	721


[1]	Includes income (loss) from discontinued operations from the Talcott Resolution life and annuity run-off business sold in May 2018.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATING BALANCE SHEETS



	PROPERTY & CASUALTY				GROUP BENEFITS						MUTUAL FUNDS				CORPORATE						CONSOLIDATED
	Sept 30 2018		Dec 31 2017		Sept 30 2018			Dec 31 2017			Sept 30 2018		Dec 31 2017		Sept 30 2018			Dec 31 2017			Sept 30 2018			Dec 31 2017
Investments
Fixed maturities, available-for-sale, at fair value	$	25,429	$	25,571	$	9,891		$	10,489		$	34	$	49	$	812		$	855		$	36,166		$	36,964
Fixed maturities, at fair value using the fair value option	17		30		7			11			—		—		—			—			24			41
Equity securities, at fair value	750		—		71			—			54		—		160			—			1,035			—
Equity securities, available-for-sale, at fair value	—		749		—			79			—		27		—			157			—			1,012
Mortgage loans	2,521		2,315		1,037			860			—		—		1			—			3,559			3,175
Limited partnerships and other alternative investments	1,454		1,375		258			213			—		—		—			—			1,712			1,588
Other investments	89		85		9			11			1		—		(1		)	—			98			96
Short-term investments	1,340		1,268		500			398			185		146		1,515			458			3,540			2,270
Total investments [1]	31,600		31,393		11,773			12,061			274		222		2,487			1,470			46,134			45,146
Cash [1]	70		156		11			12			16		8		5			4			102			180
Premiums receivable and agents’ balances	3,584		3,511		441			399			—		—		—			—			4,025			3,910
Reinsurance recoverables	3,335		3,476		256			236			—		—		340			349			3,931			4,061
DAC	609		594		53			47			7		9		1			—			670			650
Deferred income taxes	141		51		(29		)	(103		)	6		6		1,126			1,210			1,244			1,164
Goodwill	157		157		723			723			180		180		230			230			1,290			1,290
Property and equipment, net	813		837		105			118			—		—		79			79			997			1,034
Other intangible assets	69		28		571			620			11		11		—			—			651			659
Other assets	1,016		897		279			365			106		111		992			857			2,393			2,230
Assets held for sale	—		—		—			—			—		—		—			164,936			—			164,936
Total assets	$	41,394	$	41,100	$	14,183		$	14,478		$	600	$	547	$	5,260		$	169,135		$	61,437		$	225,260
Unpaid losses and loss adjustment expenses	$	23,797	$	23,775	$	8,500		$	8,512		$	—	$	—	$	—		$	—		$	32,297		$	32,287
Reserves for future policy benefits	—		—		429			441			—		—		227			272			656			713
Other policyholder funds and benefits payable	—		—		462			492			—		—		313			324			775			816
Unearned premiums	5,345		5,282		43			40			—		—		—			—			5,388			5,322
Debt	—		—		—			—			—		—		4,676			4,998			4,676			4,998
Other liabilities	1,902		2,061		616			774			220		197		2,178			2,156			4,916			5,188
Liabilities held for sale	—		—		—			—			—		—		—			162,442			—			162,442
Total liabilities	$	31,044	$	31,118	$	10,050		$	10,259		$	220	$	197	$	7,394		$	170,192		$	48,708		$	211,766
Common stockholders' equity, excluding AOCI	10,292		9,267		4,191			3,998			380		350		(615		)	(784		)	14,248			12,831
AOCI, after tax	58		715		(58		)	221			—		—		(1,519		)	(273		)	(1,519		)	663
Total stockholders' equity	$	10,350	9,982		$	4,133		4,219			$	380	350		$	(2,134	)	(1,057		)	$	12,729		13,494
Total liabilities and equity	$	41,394	$	41,100	$	14,183		$	14,478		$	600	$	547	$	5,260		$	169,135		$	61,437		$	225,260

[1]

Includes investments classified as part of Corporate that are not fixed maturities or short-term investments held by the holding company of The Hartford Financial Services Group, Inc. ("HFSG Holding Company") which are principally assets held by Hartford Life and Accident Insurance Company (HLA) that support reserves for run-off structured settlement and terminal funding agreement liabilities. Fixed maturities, cash, investment sales receivable and short-term investments held by the HFSG Holding Company were $2.3 billion and $1.1 billion as of September 30, 2018 and December 31, 2017, respectively.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CAPITAL STRUCTURE



	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017
DEBT
Short-term debt	$	413		$	413		$	413		$	320		$	320		$	320		$	320
Senior notes	3,174			3,173			3,172			3,096			3,093			3,092			3,091
Junior subordinated debentures	1,089			1,089			1,583			1,582			1,582			1,582			1,583
Total debt	$	4,676		$	4,675		$	5,168		$	4,998		$	4,995		$	4,994		$	4,994
STOCKHOLDERS’ EQUITY
Common stockholders' equity, excluding AOCI	$	14,248		$	13,899		$	13,382		$	12,831		$	16,648		$	16,794		$	17,216
AOCI	(1,519		)	(1,353		)	(239		)	663			585			494			(207		)
Total stockholders’ equity	$	12,729		$	12,546		$	13,143		$	13,494		$	17,233		$	17,288		$	17,009
CAPITALIZATION
Total capitalization, including AOCI, after tax	$	17,405		$	17,221		$	18,311		$	18,492		$	22,228		$	22,282		$	22,003
Total capitalization, excluding AOCI, after tax	$	18,924		$	18,574		$	18,550		$	17,829		$	21,643		$	21,788		$	22,210
DEBT TO CAPITALIZATION RATIOS
Total debt to capitalization, including AOCI	26.9		%	27.1		%	28.2		%	27.0		%	22.5		%	22.4		%	22.7		%
Total debt to capitalization, excluding AOCI	24.7		%	25.2		%	27.9		%	28.0		%	23.1		%	22.9		%	22.5		%
Total rating agency adjusted debt to capitalization [1] [2]	29.4		%	29.7		%	29.9		%	28.8		%	24.3		%	25.2		%	25.0		%
FIXED CHARGE COVERAGE RATIOS
Total earnings to total fixed charges [3]	7.6:1			7.4:1			7.1:1			3.1:1			2.2:1			1.7:1			5.7:1


[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 a total adjustment of $1.0 billion for both the three months ended September 30, 2018 and 2017.


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

[3]

Calculated as year to date total earnings divided by year to date 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.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

STATUTORY CAPITAL TO GAAP STOCKHOLDERS’ EQUITY RECONCILIATION

September 30, 2018



	P&C			GROUP BENEFITS
U.S. statutory net income [1]	$	1,028		$	247
U.S. statutory capital [2]	$	8,343		$	2,268
U.S. GAAP adjustments:
DAC	609			53
Non-admitted deferred tax assets [3]	158			164
Deferred taxes [4]	(537		)	(363		)
Goodwill	113			723
Other Intangible Assets	69			571
Non-admitted assets other than deferred taxes	645			155
Asset valuation and interest maintenance reserve	—			243
Benefit reserves	(50		)	46
Unrealized gains on investments	122			(43		)
Other, net	878			316
U.S. GAAP stockholders’ equity	$	10,350		$	4,133


[1]	Statutory net income is for the nine months ended September 30, 2018.


[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.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)



	AS OF
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017
Fixed maturities net unrealized gain	$	40		$	211		$	1,349		$	1,837		$	1,774		$	1,696		$	1,355
Equities net unrealized gain	—			—			—			94			66			59			58
OTTI losses recognized in AOCI	(4		)	(3		)	(5		)	(3		)	(4		)	(3		)	(4		)
Net gains on cash flow hedging instruments	(17		)	(12		)	(24		)	18			43			57			58
Total net unrealized gain	$	19		$	196		$	1,320		$	1,946		$	1,879		$	1,809		$	1,467
Foreign currency translation adjustments	34			33			32			34			27			13			8
Pension and other postretirement plan adjustments	(1,572		)	(1,582		)	(1,591		)	(1,317		)	(1,321		)	(1,328		)	(1,682		)
Total AOCI [1]	$	(1,519	)	$	(1,353	)	$	(239	)	$	663		$	585		$	494		$	(207	)


[1]	The reduction in AOCI from March 31, 2018 to June 30, 2018 included the effect of removing $758 of Talcott Resolution AOCI from the balance sheet when the business was sold effective May 31, 2018.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PROPERTY & CASUALTY

INCOME STATEMENTS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Written premiums	$	2,605		$	2,591		$	2,658		$	2,550		$	2,626		$	2,631		$	2,710		$	7,854		$	7,967
Change in unearned premium reserve	(29		)	(10		)	88			(89		)	(18		)	(19		)	88			49			51
Earned premiums	2,634			2,601			2,570			2,639			2,644			2,650			2,622			7,805			7,916
Fee income	19			18			19			20			20			20			21			56			61
Losses and loss adjustment expenses
Current accident year before catastrophes	1,620			1,534			1,537			1,615			1,672			1,646			1,612			4,691			4,930
Current accident year catastrophes	169			188			103			179			352			155			150			460			657
Prior accident year development	(60		)	(47		)	(32		)	(42		)	(1		)	(10		)	12			(139		)	1
Total losses and loss adjustment expenses	1,729			1,675			1,608			1,752			2,023			1,791			1,774			5,012			5,588
Amortization of DAC	332			329			328			328			329			331			330			989			990
Underwriting expenses	511			495			470			510			496			467			465			1,476			1,428
Amortization of other intangible assets	3			2			1			2			1			1			1			6			3
Dividends to policyholders	8			6			4			24			4			3			4			18			11
Underwriting gain (loss)*	70			112			178			43			(189		)	77			69			360			(43		)
Net investment income	311			301			322			281			303			302			310			934			915
Net realized capital gains (losses)	37			50			(9		)	57			16			42			17			78			75
Net servicing and other income	7			3			5			6			9			4			5			15			18
Income before income taxes	425			466			496			387			139			425			401			1,387			965
Income tax expense	76			83			92			168			23			123			113			251			259
Net income	349			383			404			219			116			302			288			1,136			706
Less: Net realized capital gains (losses), excluded from core earnings, before tax	36			49			(8		)	56			16			41			17			77			74
Less: Income tax benefit (expense) [2]	(7		)	(12		)	4			(77		)	(6		)	(15		)	(6		)	(15		)	(27		)
Core earnings	$	320		$	346		$	408		$	240		$	106		$	276		$	277		$	1,074		$	659
ROE
Net income [1]	15.5		%	12.7		%	11.9		%	10.7		%	5.0		%	7.5		%	4.5		%
Less: Net realized capital gains (losses), excluded from core earnings, before tax	1.7		%	1.4		%	1.4		%	1.7		%	0.3		%	0.1		%	—		%
Less: Loss on reinsurance transaction, before tax	—		%	—		%	—		%	—		%	(7.5		%)	(7.5		%)	(7.7		)%
Less: Income tax benefit (expense) [2]	(1.2		%)	(1.2		%)	(1.2		%)	(1.4		%)	2.5		%	3.1		%	3.2		%
Less: Impact of AOCI, excluded from core earnings ROE	(0.5		%)	(0.5		%)	(0.6		%)	(0.7		%)	(1.0		%)	(1.2		%)	(0.6		)%
Core earnings [1]	15.5		%	13.0		%	12.3		%	11.1		%	10.7		%	13.0		%	9.6		%


[1]	Net income ROE and core earnings ROE for Property & Casualty assumes a portion of debt and interest expense accounted for within Corporate is allocated to Property & Casualty. For further information, see Appendix, page 33.


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

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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PROPERTY & CASUALTY

UNDERWRITING RATIOS AND RESULTS



	THREE MONTHS ENDED													NINE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017	Sept 30 2018		Sept 30 2017
UNDERWRITING GAIN (LOSS)	70		112		178		43		(189	)	77		69	360		(43	)
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	61.5		59.0		59.8		61.2		63.2		62.1		61.5	60.1		62.3
Current accident year catastrophes	6.4		7.2		4.0		6.8		13.3		5.8		5.7	5.9		8.3
Prior accident year development [1]	(2.3	)	(1.8	)	(1.2	)	(1.6	)	—		(0.4	)	0.5	(1.8	)	—
Total losses and loss adjustment expenses	65.6		64.4		62.6		66.4		76.5		67.6		67.7	64.2		70.6
Expenses	31.4		31.1		30.4		31.1		30.5		29.4		29.6	30.9		29.8
Policyholder dividends	0.3		0.2		0.2		0.9		0.2		0.1		0.2	0.2		0.1
Combined ratio	97.3		95.7		93.1		98.4		107.1		97.1		97.4	95.4		100.5
Current accident year catastrophes and prior accident year development	4.1		5.4		2.8		5.2		13.3		5.4		6.2	4.1		8.3
Underlying combined ratio *	93.2		90.3		90.3		93.2		93.9		91.6		91.2	91.3		92.2


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



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Auto liability - Commercial Lines	$	(5	)	$	(5	)	$	(5	)	$	(3	)	$	—		$	—		$	20		$	(15	)	$	20
Auto liability - Personal Lines	(10		)	—			—			—			—			—			—			(10		)	—
Homeowners	(7		)	(1		)	(12		)	(14		)	—			—			—			(20		)	—
Professional and general liability	(16		)	26			10			2			—			—			10			20			10
Package business	(9		)	(15		)	8			(3		)	(22		)	—			—			(16		)	(22		)
Bond	—			—			—			22			20			—			(10		)	—			10
Commercial property	2			1			(13		)	(3		)	1			(7		)	1			(10		)	(5		)
Workers’ compensation	(24		)	(48		)	(25		)	(50		)	(9		)	—			(20		)	(97		)	(29		)
Workers' compensation discount accretion	10			10			10			7			5			8			8			30			21
Catastrophes	(13		)	(31		)	(3		)	(4		)	1			(10		)	(3		)	(47		)	(12		)
Uncollectible reinsurance	11			11			—			(15		)	—			—			—			22			—
Other reserve re-estimates	1			5			(2		)	19			3			(1		)	6			4			8
Total prior accident year development	$	(60	)	$	(47	)	$	(32	)	$	(42	)	$	(1	)	$	(10	)	$	12		$	(139	)	$	1

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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL LINES

INCOME STATEMENTS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Written premiums	$	1,751		$	1,734		$	1,851		$	1,727		$	1,702		$	1,706		$	1,821		$	5,336		$	5,229
Change in unearned premium reserve	(34		)	(11		)	140			(7		)	(21		)	(14		)	133			95			98
Earned premiums	1,785			1,745			1,711			1,734			1,723			1,720			1,688			5,241			5,131
Fee income	9			8			9			9			9			9			10			26			28
Losses and loss adjustment expenses
Current accident year before catastrophes	1,055			977			971			990			1,009			994			968			3,003			2,971
Current accident year catastrophes	95			74			69			(21		)	270			63			71			238			404
Prior accident year development [1]	(53		)	(73		)	(19		)	(34		)	(3		)	—			15			(145		)	12
Total losses and loss adjustment expenses	1,097			978			1,021			935			1,276			1,057			1,054			3,096			3,387
Amortization of DAC	264			259			257			255			253			252			249			780			754
Underwriting expenses	353			336			324			352			348			324			323			1,013			995
Amortization of other intangible assets	2			1			—			1			—			—			—			3			—
Dividends to policyholders	8			6			4			24			4			3			4			18			11
Underwriting gain (loss)	70			173			114			176			(149		)	93			68			357			12
Net servicing income (loss)	(1		)	1			—			(1		)	1			1			—			—			2
Net investment income	250			242			258			225			241			240			243			750			724
Net realized capital gains (losses)	29			42			(8		)	47			13			32			11			63			56
Other income (expenses)	2			(3		)	2			1			(1		)	—			1			1			—
Income before income taxes	350			455			366			448			105			366			323			1,171			794
Income tax expense	61			83			68			162			15			108			92			212			215
Net income	289			372			298			286			90			258			231			959			579
Less: Net realized capital gains (losses), excluded from core earnings, before tax	28			40			(6		)	45			12			32			11			62			55
Less: Income tax benefit (expense) [2]	(4		)	(9		)	2			(41		)	(3		)	(12		)	(4		)	(11		)	(19		)
Core earnings	$	265		$	341		$	302		$	282		$	81		$	238		$	224		$	908		$	543


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


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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL LINES

INCOME STATEMENTS (CONTINUED)

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



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Auto liability	$	(5	)	$	(5	)	$	(5	)	$	(3	)	$	—		$	—		$	20		$	(15	)	$	20
Professional liability	(20		)	6			2			1			—			—			—			(12		)	—
Package business	(9		)	(15		)	8			(3		)	(22		)	—			—			(16		)	(22		)
General liability	4			20			8			1			—			—			10			32			10
Bond	—			—			—			22			20			—			(10		)	—			10
Commercial property	2			1			(13		)	(3		)	1			(7		)	1			(10		)	(5		)
Workers’ compensation	(24		)	(48		)	(25		)	(50		)	(9		)	—			(20		)	(97		)	(29		)
Workers' compensation discount accretion	10			10			10			7			5			8			8			30			21
Catastrophes	(11		)	(44		)	(8		)	1			1			(2		)	—			(63		)	(1		)
Uncollectible reinsurance	—			—			—			(15		)	—			—			—			—			—
Other reserve re-estimates	—			2			4			8			1			1			6			6			8
Total prior accident year development	$	(53	)	$	(73	)	$	(19	)	$	(34	)	$	(3	)	$	—		$	15		$	(145	)	$	12

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL LINES

UNDERWRITING RATIOS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
UNDERWRITING GAIN (LOSS)	$	70		$	173		$	114		$	176		$	(149	)	$	93		$	68		$	357		$	12
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	59.1			56.0			56.8			57.1			58.6			57.8			57.3			57.3			57.9
Current accident year catastrophes	5.3			4.2			4.0			(1.2		)	15.7			3.7			4.2			4.5			7.9
Prior accident year development	(3.0		)	(4.2		)	(1.1		)	(2.0		)	(0.2		)	—			0.9			(2.8		)	0.2
Total losses and loss adjustment expenses	61.5			56.0			59.7			53.9			74.1			61.5			62.4			59.1			66.0
Expenses	34.2			33.7			33.4			34.5			34.4			33.0			33.3			33.8			33.5
Policyholder dividends	0.4			0.3			0.2			1.4			0.2			0.2			0.2			0.3			0.2
Combined ratio	96.1			90.1			93.3			89.9			108.6			94.6			96.0			93.2			99.8
Current accident year catastrophes and prior accident year development	2.3			—			2.9			(3.2		)	15.5			3.7			5.1			1.7			8.1
Underlying combined ratio	93.7			90.0			90.4			93.0			93.2			90.9			90.9			91.4			91.7

COMBINED RATIOS BY LINE OF BUSINESS
SMALL COMMERCIAL
Combined ratio	87.6			86.6			89.0			83.9			101.5			90.4			91.7			87.7			94.6
Current accident year catastrophes	2.7			5.5			3.4			(1.2		)	15.9			3.2			4.7			3.9			8.0
Prior accident year development	(3.9		)	(4.4		)	(1.8		)	(2.7		)	(3.5		)	—			(0.3		)	(3.4		)	(1.3		)
Underlying combined ratio	88.7			85.6			87.5			87.8			89.2			87.2			87.3			87.3			87.9
MIDDLE MARKET
Combined ratio	111.8			94.6			98.1			94.2			119.7			99.8			100.4			101.6			106.6
Current accident year catastrophes	11.5			3.7			6.6			(1.5		)	21.1			5.5			5.2			7.3			10.6
Prior accident year development	0.1			(3.2		)	(0.8		)	(3.2		)	1.5			(0.5		)	1.4			(1.3		)	0.8
Underlying combined ratio	100.2			94.1			92.2			98.9			97.0			94.9			93.8			95.6			95.2
SPECIALTY COMMERCIAL
Combined ratio	88.0			99.6			98.2			100.5			99.4			97.6			101.3			95.1			99.4
Current accident year catastrophes	—			0.1			—			—			—			0.2			—			—			0.1
Prior accident year development	(8.0		)	1.0			0.7			0.9			0.8			1.5			3.9			(2.2		)	2.0
Underlying combined ratio	96.0			98.5			97.5			99.6			98.6			95.9			97.5			97.3			97.3

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL LINES

SUPPLEMENTAL DATA



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
WRITTEN PREMIUMS
Small Commercial	$	916		$	928		$	996		$	882		$	905		$	936		$	986		$	2,840		$	2,827
Middle Market	622			586			616			628			584			566			592			1,824			1,742
Specialty Commercial	201			210			227			206			201			192			232			638			625
National Accounts	77			72			97			87			84			71			99			246			254
Financial Products	66			62			63			61			59			58			61			191			178
Bond	54			60			48			51			51			52			53			162			156
Other Specialty	4			16			19			7			7			11			19			39			37
Other	12			10			12			11			12			12			11			34			35
Total	$	1,751		$	1,734		$	1,851		$	1,727		$	1,702		$	1,706		$	1,821		$	5,336		$	5,229
EARNED PREMIUMS
Small Commercial	$	940		$	927		$	914		$	923		$	919		$	914		$	890		$	2,781		$	2,723
Middle Market	614			598			581			594			585			587			583			1,793			1,755
Specialty Commercial	219			209			204			206			208			207			203			632			618
National Accounts	94			82			84			85			84			85			86			260			255
Financial Products	62			60			59			60			62			60			60			181			182
Bond	53			54			50			51			51			51			47			157			149
Other Specialty	10			13			11			10			11			11			10			34			32
Other	12			11			12			11			11			12			12			35			35
Total	$	1,785		$	1,745		$	1,711		$	1,734		$	1,723		$	1,720		$	1,688		$	5,241		$	5,131

STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
New Business Premium
Small Commercial	$	152		$	154		$	166		$	155		$	140		$	147		$	154		$	472		$	441
Middle Market	$	135		$	138		$	141		$	137		$	112		$	107		$	128		$	414		$	347
Renewal Price Increases [1]
Standard Commercial Lines - Written	1.7		%	3.0		%	2.4		%	2.6		%	3.4		%	3.4		%	3.2		%	2.4		%	3.3		%
Standard Commercial Lines - Earned	2.9		%	3.2		%	3.2		%	3.3		%	3.0		%	2.6		%	2.4		%	3.1		%	2.7		%
Policy Count Retention
Small Commercial	83		%	82		%	82		%	83		%	83		%	83		%	85		%	82		%	84		%
Middle Market	78		%	77		%	78		%	79		%	76		%	75		%	80		%	78		%	77		%
Policies in Force (in thousands)
Small Commercial	1,269			1,265			1,263			1,272			1,274			1,278			1,281
Middle Market	64			65			66			66			67			66			66


[1]	Excludes Maxum, higher hazard general liability in middle market and livestock lines of business.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

INCOME STATEMENTS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Written premiums	$	854		$	857		$	807		$	823		$	924		$	925		$	889		$	2,518		$	2,738
Change in unearned premium reserve	5			1			(52		)	(82		)	3			(5		)	(45		)	(46		)	(47		)
Earned premiums	849			856			859			905			921			930			934			2,564			2,785
Fee income	10			10			10			11			11			11			11			30			33
Losses and loss adjustment expenses
Current accident year before catastrophes	565			557			566			625			663			652			644			1,688			1,959
Current accident year catastrophes	74			114			34			200			82			92			79			222			253
Prior accident year development [1]	(18		)	10			(13		)	(25		)	2			(10		)	(4		)	(21		)	(12		)
Total losses and loss adjustment expenses	621			681			587			800			747			734			719			1,889			2,200
Amortization of DAC	68			70			71			73			76			79			81			209			236
Underwriting expenses	155			156			143			155			145			140			137			454			422
Amortization of other intangible assets	1			1			1			1			1			1			1			3			3
Underwriting gain (loss)	14			(42		)	67			(113		)	(37		)	(13		)	7			39			(43		)
Net servicing income	5			4			4			5			4			4			3			13			11
Net investment income	39			37			40			34			36			35			36			116			107
Net realized capital gains	5			5			—			6			2			5			2			10			9
Other income (expense)	1			1			(1		)	—			3			(1		)	(1		)	1			1
Income (loss) before income taxes	64			5			110			(68		)	8			30			47			179			85
Income tax expense (benefit)	13			(1		)	21			6			—			6			14			33			20
Net income (loss)	51			6			89			(74		)	8			24			33			146			65
Less: Net realized capital gains (losses), excluded from core earnings, before tax	5			6			(1		)	7			2			5			2			10			9
Less: Income tax benefit (expense) [2]	(1		)	(2		)	1			(35		)	(1		)	(1		)	(1		)	(2		)	(3		)
Core earnings (losses)	$	47		$	2		$	89		$	(46	)	$	7		$	20		$	32		$	138		$	59


[1]	For further information, see Personal Lines Income Statements (continued), page 15.


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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

INCOME STATEMENTS (CONTINUED)

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



	THREE MONTHS ENDED																				NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017		Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Auto liability	$	(10	)	$	—		$	—		$	—		$	—	$	—		$	—		$	(10	)	$	—
Homeowners	(7		)	(1		)	(12		)	(14		)	—		—			—			(20		)	—
Catastrophes	(2		)	13			5			(5		)	—		(8		)	(3		)	16			(11		)
Other reserve re-estimates, net	1			(2		)	(6		)	(6		)	2		(2		)	(1		)	(7		)	(1		)
Total prior accident year development	$	(18	)	$	10		$	(13	)	$	(25	)	$	2	$	(10	)	$	(4	)	$	(21	)	$	(12	)

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

UNDERWRITING RATIOS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
UNDERWRITING GAIN (LOSS)	$	14		$	(42	)	$	67		$	(113	)	$	(37	)	$	(13	)	$	7		$	39		$	(43	)
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes	66.5			65.1			65.9			69.1			72.0			70.1			69.0			65.8			70.3
Current accident year catastrophes	8.7			13.3			4.0			22.1			8.9			9.9			8.5			8.7			9.1
Prior accident year development	(2.1		)	1.2			(1.5		)	(2.8		)	0.2			(1.1		)	(0.4		)	(0.8		)	(0.4		)
Total losses and loss adjustment expenses	73.1			79.6			68.3			88.4			81.1			78.9			77.0			73.7			79.0
Expenses	25.2			25.4			23.9			24.1			22.9			22.5			22.3			24.8			22.5
Combined ratio	98.4			104.9			92.2			112.5			104.0			101.4			99.3			98.5			101.5
Current accident year catastrophes and prior accident year development	6.6			14.5			2.5			19.3			9.1			8.8			8.1			7.9			8.7
Underlying combined ratio	91.8			90.4			89.8			93.1			94.9			92.6			91.2			90.6			92.9
PRODUCT
Automobile
Combined ratio	98.9			99.7			93.1			101.7			106.3			100.8			97.5			97.2			101.5
Current accident year catastrophes	2.0			3.4			0.5			0.7			4.8			2.3			1.4			2.0			2.8
Prior accident year development	(1.7		)	(0.2		)	(1.6		)	(0.7		)	—			(0.6		)	(0.4		)	(1.2		)	(0.3		)
Underlying combined ratio	98.5			96.5			94.2			101.7			101.6			99.1			96.6			96.4			99.1
Homeowners
Combined ratio	96.9			117.8			89.8			137.4			97.9			103.4			103.4			101.5			101.6
Current accident year catastrophes	23.6			36.4			12.0			71.9			18.6			28.0			24.9			24.0			23.8
Prior accident year development	(3.0		)	5.0			(1.1		)	(7.3		)	0.4			(2.1		)	(0.4		)	0.3			(0.7		)
Underlying combined ratio	76.3			76.4			78.9			72.8			78.9			77.6			78.9			77.2			78.4

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

SUPPLEMENTAL DATA



	THREE MONTHS ENDED														NINE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
DISTRIBUTION
WRITTEN PREMIUMS
AARP Direct	$	706	$	704	$	654	$	644	$	735	$	729	$	687	$	2,064	$	2,151
AARP Agency	64		67		67		79		79		80		86		198		245
Other Agency	73		77		77		90		100		104		105		227		309
Other	11		9		9		10		10		12		11		29		33
Total	$	854	$	857	$	807	$	823	$	924	$	925	$	889	$	2,518	$	2,738
EARNED PREMIUMS
AARP Direct	$	687	$	684	$	681	$	709	$	713	$	711	$	708	$	2,052	$	2,132
AARP Agency	71		74		77		83		88		89		92		222		269
Other Agency	83		86		92		102		108		117		123		261		348
Other	8		12		9		11		12		13		11		29		36
Total	$	849	$	856	$	859	$	905	$	921	$	930	$	934	$	2,564	$	2,785
PRODUCT LINE
WRITTEN PREMIUMS
Automobile	$	583	$	586	$	581	$	578	$	636	$	638	$	645	$	1,750	$	1,919
Homeowners	271		271		226		245		288		287		244		768		819
Total	$	854	$	857	$	807	$	823	$	924	$	925	$	889	$	2,518	$	2,738
EARNED PREMIUMS
Automobile	$	591	$	596	$	600	$	634	$	644	$	652	$	654	$	1,787	$	1,950
Homeowners	258		260		259		271		277		278		280		777		835
Total	$	849	$	856	$	859	$	905	$	921	$	930	$	934	$	2,564	$	2,785

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

PERSONAL LINES

SUPPLEMENTAL DATA (CONTINUED)



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
New Business Premium
Automobile	$	47		$	42		$	37		$	35		$	37		$	38		$	42		$	126		$	117
Homeowners	$	12		$	11		$	9		$	9		$	11		$	12		$	12		$	32		$	35
Renewal Written Price Increases
Automobile	6.1		%	8.1		%	9.5		%	11.1		%	11.8		%	10.4		%	10.3		%	7.9		%	10.8		%
Homeowners	10.0		%	10.4		%	9.5		%	9.0		%	8.5		%	9.1		%	8.9		%	10.0		%	8.8		%
Renewal Earned Price Increases
Automobile	9.3		%	10.4		%	10.7		%	10.8		%	10.1		%	9.1		%	8.2		%	10.1		%	9.1		%
Homeowners	9.6		%	9.2		%	8.9		%	8.8		%	8.7		%	8.5		%	8.2		%	9.2		%	8.4		%
Policy Count Retention
Automobile	83		%	82		%	80		%	80		%	80		%	81		%	82		%	82		%	81		%
Homeowners	83		%	84		%	82		%	83		%	83		%	83		%	82		%	83		%	82		%
Premium Retention
Automobile	85		%	86		%	85		%	87		%	87		%	88		%	88		%	85		%	88		%
Homeowners	90		%	91		%	89		%	89		%	89		%	90		%	88		%	90		%	89		%
Policies in Force (in thousands)
Automobile	1,547			1,589			1,641			1,702			1,768			1,839			1,905
Homeowners	948			978			1,008			1,038			1,071			1,109			1,144

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

P&C OTHER OPERATIONS

INCOME STATEMENTS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Losses and loss adjustment expenses
Prior accident year development [1]	$	11		$	16		$	—		$	17		$	—		—			1			27			1
Total losses and loss adjustment expenses	11			16			—			17			—			—			1			27			1
Underwriting expenses	3			3			3			3			3			3			5			9			11
Underwriting loss	(14		)	(19		)	(3		)	(20		)	(3		)	(3		)	(6		)	(36		)	(12		)
Net investment income	22			22			24			22			26			27			31			68			84
Net realized capital gains (losses)	3			3			(1		)	4			1			5			4			5			10
Other income	—			—			—			1			2			—			2			—			4
Income before income taxes	11			6			20			7			26			29			31			37			86
Income tax expense	2			1			3			—			8			9			7			6			24
Net income	9			5			17			7			18			20			24			31			62
Less: Net realized capital gains (losses), excluded from core earnings, before tax	3			3			(1		)	4			2			4			4			5			10
Less: Income tax benefit (expense) [2]	(2		)	(1		)	1			(1		)	(2		)	(2		)	(1		)	(2		)	(5		)
Core earnings	$	8		$	3		$	17		$	4		$	18		$	18		$	21		$	28		$	57

[1] The three months ended September 30, 2018 include reserve increases for the allowance for uncollectible reinsurance. The three months ended June 30, 2018 included reserve increases for the allowance for uncollectible reinsurance and certain mass torts.

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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

GROUP BENEFITS

INCOME STATEMENTS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Earned premiums	$	1,353		$	1,357		$	1,357		$	1,162		$	803		$	805		$	816		$	4,067		$	2,424
Fee income	43			44			44			34			19			19			19			131			57
Net investment income	117			115			121			103			95			88			95			353			278
Net realized capital gains (losses)	(3		)	2			(25		)	4			9			13			8			(26		)	30
Total revenues	1,510			1,518			1,497			1,303			926			925			938			4,525			2,789
Benefits, losses and loss adjustment expenses	1,054			1,059			1,085			910			614			628			651			3,198			1,893
Amortization of DAC	12			11			10			9			8			8			8			33			24
Insurance operating costs and other expenses	319			317			321			298			204			193			220			957			617
Amortization of other intangible assets	15			16			17			9			—			—			—			48			—
Total benefits, losses and expenses	1,400			1,403			1,433			1,226			826			829			879			4,236			2,534
Income before income taxes	110			115			64			77			100			96			59			289			255
Income tax expense (benefit)	33			19			10			(32		)	29			27			14			62			70
Net income	77			96			54			109			71			69			45			227			185
Less: Net realized capital gains (losses), excluded from core earnings, before tax	(3		)	—			(26		)	4			7			13			7			(29		)	27
Less: Integration and transaction costs associated with acquired business, before tax	(12		)	(11		)	(12		)	(17		)	—			—			—			(35		)	—
Less: Income tax benefit (expense) [1]	(10		)	3			7			55			(2		)	(5		)	(2		)	—			(9		)
Core earnings	$	102		$	104		$	85		$	67		$	66		$	61		$	40		$	291		$	167
Margin
Net income margin	5.1		%	6.3		%	3.6		%	8.4		%	7.7		%	7.5		%	4.9		%	5.0		%	6.7		%
Core earnings margin*	6.7		%	6.9		%	5.6		%	5.2		%	7.2		%	6.7		%	4.3		%	6.4		%	6.1		%
ROE
Net income [2]	12.0		%	11.9		%	10.9		%	10.5		%	11.6		%	11.0		%	10.7		%
Less: Net realized capital gains (losses), excluded from core earnings, before tax	(1.0		%)	(0.6		%)	(0.1		%)	1.2		%	1.7		%	2.2		%	2.4		%
Less: Integration costs	(2.1		%)	(1.6		%)	(1.2		%)	(0.7		%)	—		%	—		%	—		%
Less: Income tax benefit (expense) [1]	2.2		%	2.6		%	2.3		%	1.8		%	(0.6		%)	(0.8		%)	(0.9		)%
Less: Impact of AOCI, excluded from core earnings ROE	(0.2		%)	(0.4		%)	(0.4		%)	(0.4		%)	(1.5		%)	(1.5		%)	(1.0		)%
Core earnings [2]	13.1		%	11.9		%	10.3		%	8.6		%	12.0		%	11.1		%	10.2		%

[1]

Generally represents federal income tax benefit (expense) related to before tax items not included in core earnings,though for the three and nine months ended September 30, 2018, also included $14 of income tax expense that was primarily driven by the effect of the lower corporate income tax rate on deferred taxes due to the filing of the Company's 2017 federal income tax return and completion of the Aetna group benefits acquisition.


[2]	Net income ROE and core earnings ROE for Group Benefits assumes a portion of debt and interest expense accounted for within Corporate is allocated to Group Benefits. For further information, see Appendix, page 33.

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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

GROUP BENEFITS

SUPPLEMENTAL DATA



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
PREMIUMS
Fully insured ongoing premiums
Group disability	$	641		$	642		$	633		$	539		$	368		$	360		$	364		$	1,916		$	1,092
Group life	652			651			664			567			382			391			386			1,967			1,159
Other	60			59			60			55			53			51			55			179			159
Total fully insured ongoing premiums	1,353			1,352			1,357			1,161			803			802			805			4,062			2,410
Total buyouts [1]	—			5			—			1			—			3			11			5			14
Total premiums	$	1,353		$	1,357		$	1,357		$	1,162		$	803		$	805		$	816		$	4,067		$	2,424
SALES (GROSS ANNUALIZED NEW PREMIUMS)
Fully insured ongoing sales
Group disability	$	48		$	47		$	260		$	77		$	43		$	32		$	87		$	355		$	162
Group life	47			34			160			22			20			33			115			241			168
Other	9			4			34			4			5			2			9			47			16
Total fully insured ongoing sales	104			85			454			103			68			67			211			643			346
Total buyouts [1]	—			5			—			1			—			3			11			5			14
Total sales	$	104		$	90		$	454		$	104		$	68		$	70		$	222		$	648		$	360
RATIOS, EXCLUDING BUYOUTS
Group disability loss ratio	75.9		%	74.3		%	74.9		%	72.9		%	73.0		%	78.9		%	82.9		%	75.0		%	78.3		%
Group life loss ratio	76.6		%	77.4		%	80.9		%	80.2		%	77.7		%	74.2		%	73.1		%	78.3		%	75.0		%
Total loss ratio	75.5		%	75.5		%	77.4		%	76.1		%	74.7		%	76.1		%	77.7		%	76.2		%	76.2		%
Expense ratio	23.9		%	23.9		%	24.0		%	25.0		%	25.8		%	24.5		%	27.7		%	23.9		%	26.0		%


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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

MUTUAL FUNDS

INCOME STATEMENTS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Investment management fees	$	188		$	182		$	181		$	179		$	172		$	162		$	155		$	551		$	489
Shareholder servicing fees	23			22			21			21			24			27			24			66			75
Other revenue	57			58			57			58			56			58			59			172			173
Net realized capital losses	—			(1		)	—			—			—			—			—			(1		)	—
Total revenues	268			261			259			258			252			247			238			788			737
Sub-advisory expense	69			66			66			65			63			60			56			201			179
Employee compensation and benefits	28			27			29			27			28			28			28			84			84
Distribution and service	91			91			91			91			90			90			89			273			269
General, administrative and other	28			31			30			19			31			31			30			89			92
Total expenses	216			215			216			202			212			209			203			647			624
Income before income taxes	52			46			43			56			40			38			35			141			113
Income tax expense	11			9			9			23			14			14			12			29			40
Net income	$	41		$	37		$	34		$	33		$	26		$	24		$	23		$	112		$	73
Less: Net realized capital losses, excluded from core earnings, before tax	—			(1		)	—			—			—			—			—			(1		)	—
Less: Income tax expense	—			—			—			(4		)	—			—			—			—			—
Core earnings	$	41		$	38		$	34		$	37		$	26		$	24		$	23		$	113		$	73
Daily average total Mutual Funds segment AUM	$119,897			$117,070			$117,301			$113,830			$109,640			$105,625			$101,114			$	118,098		$	105,491
Return on assets (bps, after tax) [1]
Net income	13.6			12.6			11.9			11.5			9.5			9.2			9.2			12.7			9.3
Core earnings*	13.6			12.8			11.9			12.8			9.5			9.2			9.2			12.8			9.3
ROE
Net income [2]	51.8		%	47.9		%	44.3		%	40.9		%	34.3		%	33.0		%	32.0		%
Less: Net realized capital losses excluded from core earnings, before tax	(0.4		%)	(0.4		%)	—		%	—		%	—		%	—		%	—		%
Less: Income tax expense	(1.5		%)	(1.5		%)	(1.6		%)	(1.6		%)	—		%	—		%	—		%
Less: Impact of AOCI, excluded from core earnings ROE	0.4		%	0.3		%	0.2		%	(0.1		%)	(0.3		%)	(0.3		%)	—		%
Core earnings [2]	53.3		%	49.5		%	45.7		%	42.6		%	34.6		%	33.3		%	32.0		%


[1]	Represents annualized earnings divided by daily average assets under management, as measured in basis points ("bps") which represents one hundredth of one percent.


[2]	Net income ROE and core earnings ROE for Mutual Funds assumes a portion of debt and interest expense accounted for within Corporate is allocated to Mutual Funds. For further information, see Appendix, page 33.

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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

MUTUAL FUNDS

ASSET VALUE ROLLFORWARD

ASSETS UNDER MANAGEMENT BY ASSET CLASS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Equity Funds
Beginning balance	$	66,285		$	64,702		$	63,740		$	61,163		$	58,047		$	54,683		$	50,826		$	63,740		$	50,826
Sales	3,672			3,452			4,175			3,060			3,630			4,076			3,987			11,299			11,693
Redemptions	(3,449		)	(3,116		)	(3,749		)	(3,276		)	(2,944		)	(3,269		)	(3,587		)	(10,314		)	(9,800		)
Net flows	223			336			426			(216		)	686			807			400			985			1,893
Change in market value and other	2,955			1,247			536			2,793			2,430			2,557			3,457			4,738			8,444
Ending balance	$	69,463		$	66,285		$	64,702		$	63,740		$	61,163		$	58,047		$	54,683		$	69,463		$	61,163
Fixed Income Funds
Beginning balance	$	14,556		$	14,378		$	14,401		$	14,454		$	14,286		$	13,973		$	13,301		$	14,401		$	13,301
Sales	946			1,119			1,002			771			866			1,079			1,930			3,067			3,875
Redemptions	(772		)	(960		)	(1,030		)	(966		)	(861		)	(900		)	(1,406		)	(2,762		)	(3,167		)
Net flows	174			159			(28		)	(195		)	5			179			524			305			708
Change in market value and other	101			19			5			142			163			134			148			125			445
Ending balance	$	14,831		$	14,556		$	14,378		$	14,401		$	14,454		$	14,286		$	13,973		$	14,831		$	14,454
Multi-Strategy Investments Funds [1]
Beginning balance	$	19,894		$	20,137		$	20,469		$	19,571		$	18,923		$	18,142		$	17,171		$	20,469		$	17,171
Sales	558			681			1,000			993			868			1,093			1,301			2,239			3,262
Redemptions	(971		)	(931		)	(914		)	(751		)	(792		)	(765		)	(892		)	(2,816		)	(2,449		)
Net flows	(413		)	(250		)	86			242			76			328			409			(577		)	813
Change in market value and other	581			7			(418		)	656			572			453			562			170			1,587
Ending balance	$	20,062		$	19,894		$	20,137		$	20,469		$	19,571		$	18,923		$	18,142		$	20,062		$	19,571
Exchange-traded Products ("ETP") AUM
Beginning balance	$	930		$	666		$	480		$	409		$	325		278			209			480			209
Net flows	261			228			194			42			60			33			22			683			115
Change in market value and other	(14		)	36			(8		)	29			24			14			47			14			85
Ending balance	$	1,177		$	930		$	666		$	480		$	409		325			278			1,177			409
Mutual Fund and ETP AUM
Beginning balance	$	101,665		$	99,883		$	99,090		$	95,597		$	91,581		$	87,076		$	81,507		$	99,090		$	81,507
Sales - mutual fund	5,176			5,252			6,177			4,824			5,364			6,248			7,218			16,605			18,830
Redemptions - mutual fund	(5,192		)	(5,007		)	(5,693		)	(4,993		)	(4,597		)	(4,934		)	(5,885		)	(15,892		)	(15,416		)
Net flows - ETP	261			228			194			42			60			33			22			683			115
Net flows - mutual fund and ETP	245			473			678			(127		)	827			1,347			1,355			1,396			3,529
Change in market value and other	3,623			1,309			115			3,620			3,189			3,158			4,214			5,047			10,561
Ending balance	105,533			101,665			99,883			99,090			95,597			91,581			87,076			105,533			95,597
Talcott Resolution life and annuity separate account AUM [2]	15,543			15,376			15,614			16,260			16,127			16,098			16,123			15,543			16,127
Total Mutual Funds segment AUM	$	121,076		$	117,041		$	115,497		$	115,350		$	111,724		$	107,679		$	103,199		$	121,076		$	111,724


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


[2]	Represents AUM of the Talcott Resolution life and annuity business sold in May, 2018 that is still managed by the Company's Mutual Funds segment.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CORPORATE

INCOME STATEMENTS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Fee income [1]	$	15		$	4		$	2		$	2		$	1		$	—		$	1		$	21		$	2
Other revenue	6			2			—			—			—			—						8			—
Net investment income	15			11			7			9			5			5			4			33			14
Net realized capital gains (losses)	4			1			4			(1		)	1			—			(1		)	9			—
Total revenues	40			18			13			10			7			5			4			71			16
Benefits, losses and loss adjustment expenses [2]	3			4			2			31			—			—			—			9			—
Insurance operating costs and other expenses	25			19			15			(1		)	26			16			18			59			60
Pension settlement	—			—			—			—			—			750			—			—			750
Loss on extinguishment of debt	—			6			—			—			—			—			—			6			—
Interest expense	69			79			80			78			79			79			80			228			238
Total expenses	97			108			97			108			105			845			98			302			1,048
Loss from continuing operations before income taxes	(57		)	(90		)	(84		)	(98		)	(98		)	(840		)	(94		)	(231		)	(1,032		)
Income tax expense (benefit) [3]	(17		)	(8		)	(20		)	821			(30		)	(293		)	(41		)	(45		)	(364		)
Loss from continuing operations, net of tax	(40		)	(82		)	(64		)	(919		)	(68		)	(547		)	(53		)	(186		)	(668		)
Income (loss) from discontinued operations, net of tax [4]	5			148			169			(3,145		)	89			112			75			322			276
Net income (loss)	(35		)	66			105			(4,064		)	21			(435		)	22			136			(392		)
Less: Net realized capital gains (losses), excluded from core earnings, before tax	4			2			4			(1		)	2			(1		)	(1		)	10			—
Less: Loss on extinguishment of debt, before tax	—			(6		)	—			—			—			—			—			(6		)	—
Less: Pension settlement, before tax	—			—			—			—			—			(750		)	—			—			(750		)
Less: Income tax benefit (expense) [3] [5]	1			(2		)	(2		)	(867		)	(2		)	262			—			(3		)	260
Less: Income (loss) from discontinued operations, after tax [4]	5			148			169			(3,145		)	89			112			75			322			276
Core losses	$	(45	)	$	(76	)	$	(66	)	$	(51	)	$	(68	)	$	(58	)	$	(52	)	$	(187	)	$	(178	)


[1]	Beginning in June, 2018, includes fee income from managing invested assets of Talcott Resolution.


[2]	Benefits incurred relates to life and annuity business retained by the Company.


[3]	The three months and year ended December 31, 2017 include $867 of income tax expense primarily from reducing net deferred tax assets due to the reduction in the corporate Federal income tax rate from 35% to 21%.


[4]	The three months ended December 31, 2017 included an estimated loss on sale of $3.3 billion related to the sale of Talcott Resolution, the Company's life and annuity run-off business that was sold in May, 2018. The three months ended June 30, 2018 and March 31, 2018, included a reduction in loss on sale of $151 and $62, respectively.


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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT INCOME BEFORE TAX

CONSOLIDATED



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Net Investment Income
Fixed maturities [1]
Taxable	$	269		$	252		$	238		$	226		$	224		$	224		$	221		$	759		$	669
Tax-exempt	101			106			111			105			103			102			98			318			303
Total fixed maturities	370			358			349			331			327			326			319			1,077			972
Equity securities	6			6			6			10			4			5			5			18			14
Mortgage loans	35			34			33			33			31			30			30			102			91
Limited partnerships and other alternative investments [2]	45			39			73			29			48			39			58			157			145
Other [3]	10			9			8			10			13			11			15			27			39
Subtotal	466			446			469			413			423			411			427			1,381			1,261
Investment expense	(22		)	(18		)	(18		)	(19		)	(19		)	(16		)	(17		)	(58		)	(52		)
Total net investment income	$	444		$	428		$	451		$	394		$	404		$	395		$	410		$	1,323		$	1,209
Annualized investment yield, before tax [4]	4.0		%	3.9		%	4.2		%	3.8		%	4.1		%	4.1		%	4.2		%	4.0		%	4.1		%
Annualized limited partnerships and other alternative investment yield, before tax [4]	10.6		%	9.5		%	18.6		%	7.3		%	12.8		%	10.1		%	15.5		%	13.3		%	13.2		%
Annualized investment yield, before tax, excluding limited partnership and other alternative investments [4] *	3.7		%	3.7		%	3.7		%	3.7		%	3.8		%	3.8		%	3.8		%	3.7		%	3.8		%
Annualized investment yield, after tax [4]	3.3		%	3.3		%	3.5		%	2.8		%	3.0		%	3.0		%	3.1		%	3.4		%	3.0		%
Average reinvestment rate [5]	4.0		%	4.0		%	3.8		%	3.3		%	3.4		%	3.5		%	3.5		%	4.0		%	3.5		%
Average sales/maturities yield [6]	3.8		%	3.7		%	3.3		%	3.3		%	4.1		%	3.7		%	3.6		%	3.6		%	3.8		%
Portfolio duration (in years) [7]	4.9			4.9			5.1			5.2			5.0			5.0			5.1			4.9			5.0


[1]	Includes income on short-term bonds.


[2]	Other alternative investments include an insurer-owned life insurance policy which is invested in hedge funds and other investments.


[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 amortized cost 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.

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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT INCOME BEFORE TAX

PROPERTY & CASUALTY



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Net Investment Income
Fixed maturities [1]
Taxable	$	178		$	168		$	163		$	158		$	169		$	169		$	168		$	509		$	506
Tax-exempt	77			79			82			81			81			81			78			238			240
Total fixed maturities	255			247			245			239			250			250			246			747			746
Equity securities	5			5			4			4			4			4			4			14			12
Mortgage loans	24			23			24			24			22			21			21			71			64
Limited partnerships and other alternative investments [2]	35			33			58			23			34			32			45			126			111
Other [3]	8			6			4			6			7			8			8			18			23
Subtotal	327			314			335			296			317			315			324			976			956
Investment expense	(16		)	(13		)	(13		)	(15		)	(14		)	(13		)	(14		)	(42		)	(41		)
Total net investment income	$	311		$	301		$	322		$	281		$	303		$	302		$	310		$	934		$	915
Annualized investment yield, before tax [4]	4.1		%	4.0		%	4.3		%	3.8		%	4.0		%	4.1		%	4.2		%	4.1		%	4.1		%
Annualized limited partnerships and other alternative investment yield, before tax [4]	9.8		%	9.3		%	17.0		%	6.5		%	10.4		%	9.6		%	13.6		%	12.4		%	11.6		%
Annualized investment yield, before tax, excluding limited partnership and other alternative investments [4]	3.8		%	3.8		%	3.7		%	3.7		%	3.7		%	3.8		%	3.7		%	3.7		%	3.8		%
Annualized investment yield, after tax [4]	3.4		%	3.4		%	3.5		%	2.8		%	2.9		%	3.0		%	3.1		%	3.4		%	3.0		%
Average reinvestment rate [5]	3.9		%	4.0		%	3.7		%	3.2		%	3.4		%	3.5		%	3.7		%	3.9		%	3.5		%
Average sales/maturities yield [6]	3.8		%	3.9		%	3.7		%	3.6		%	4.1		%	3.8		%	3.8		%	3.8		%	3.9		%
Portfolio duration (in years) [7]	4.9			4.9			4.9			5.0			5.0			5.0			5.0			4.9			5.0

Footnotes [1] through [7] are explained on page 25.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT INCOME BEFORE TAX

GROUP BENEFITS



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Net Investment Income
Fixed maturities [1]
Taxable	$	77		$	75		$	70		$	63		$	50		$	50		$	49		$	222		$	149
Tax-exempt	23			25			27			24			21			21			20			75			62
Total fixed maturities	100			100			97			87			71			71			69			297			211
Equity securities	—			—			1			1			—			—			—			1			—
Mortgage loans	11			11			9			9			9			9			10			31			28
Limited partnerships and other alternative investments [2]	10			6			15			6			14			7			13			31			34
Other [3]	2			3			4			4			5			4			6			9			15
Subtotal	123			120			126			107			99			91			98			369			288
Investment expense	(6		)	(5		)	(5		)	(4		)	(4		)	(3		)	(3		)	(16		)	(10		)
Total net investment income	$	117		$	115		$	121		$	103		$	95		$	88		$	95		$	353		$	278
Annualized investment yield, before tax [4]	4.1		%	4.1		%	4.3		%	3.8		%	4.9		%	4.5		%	4.8		%	4.2		%	4.8		%
Annualized limited partnerships and other alternative investment yield, before tax [4]	15.4		%	10.6		%	28.3		%	12.2		%	29.4		%	13.3		%	28.9		%	18.8		%	25.2		%
Annualized investment yield, before tax, excluding limited partnership and other alternative investments [4] [8]	3.9		%	3.9		%	3.8		%	3.7		%	4.3		%	4.3		%	4.3		%	3.9		%	4.3		%
Annualized investment yield, after tax [4]	3.4		%	3.4		%	3.5		%	2.8		%	3.5		%	3.3		%	3.5		%	3.4		%	3.4		%
Average reinvestment rate [5]	4.1		%	4.2		%	3.9		%	3.4		%	3.6		%	3.6		%	3.6		%	4.1		%	3.6		%
Average sales/maturities yield [6]	3.6		%	3.8		%	3.0		%	2.9		%	4.3		%	3.9		%	4.0		%	3.4		%	4.1		%
Portfolio duration (in years) [7]	6.1			6.0			6.1			6.3			6.0			6.0			5.9			6.1			6.0

Footnotes [1] through [7] are explained on page 25.


[8]	Beginning in the fourth quarter of 2017, the average yield reflects the fact that invested assets acquired as part of the acquisition of Aetna's U.S. group life and disability business on November 1, 2017 were recorded at the then current yields, which are lower than the yields of the remainder of the Group Benefits segment invested assets.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NET INVESTMENT INCOME

CONSOLIDATED



	THREE MONTHS ENDED														NINE MONTHS ENDED
Net Investment Income by Segment	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
Net Investment Income
Commercial Lines	$	250	$	242	$	258	$	225	$	241	$	240	$	243	$	750	$	724
Personal Lines	39		37		40		34		36		35		36		116		107
P&C Other Operations	22		22		24		22		26		27		31		68		84
Total Property & Casualty	$	311	$	301	$	322	$	281	$	303	$	302	$	310	$	934	$	915
Group Benefits	117		115		121		103		95		88		95		353		278
Mutual Funds	1		1		1		1		1		—		1		3		2
Corporate	15		11		7		9		5		5		4		33		14
Total net investment income by segment	$	444	$	428	$	451	$	394	$	404	$	395	$	410	$	1,323	$	1,209


	THREE MONTHS ENDED														NINE MONTHS ENDED
Net Investment Income From Limited Partnerships and Other Alternative Investments	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
Total Property & Casualty	$	35	$	33	$	58	$	23	$	34	$	32	$	45	$	126	$	111
Group Benefits	10		6		15		6		14		7		13		31		34
Total net investment income from limited partnerships and other alternative investments [1]	$	45	$	39	$	73	$	29	$	48	$	39	$	58	$	157	$	145


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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)

CONSOLIDATED



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Net Realized Capital Gains (Losses)
Gross gains on sales	$	26		$	46		$	19		$	91		$	46		$	77		$	61		$	91		$	184
Gross losses on sales	(41		)	(31		)	(57		)	(29		)	(16		)	(22		)	(46		)	(129		)	(84		)
Equity securities [1]	46			26			16			—			—			—			—			88			—
Net impairment losses	(1		)	—			—			(4		)	(1		)	(2		)	(1		)	(1		)	(4		)
Valuation allowances on mortgage loans	—			—			—			(1		)	—			—			—			—			—
Transactional foreign currency revaluation	—			—			1			—			—			8			6			1			14
Non-qualifying foreign currency derivatives	1			4			(3		)	—			—			(7		)	(7		)	2			(14		)
Other net gains (losses) [2] [3]	7			7			(6		)	3			(3		)	1			11			8			9
Total net realized capital gains (losses)	$	38		$	52		$	(30	)	$	60		$	26		$	55		$	24		$	60		$	105
Less: Net realized capital gains, included in core earnings, before tax	1			2			—			1			1			2			1			3			4
Total net realized capital gains (losses) excluded from core earnings, before tax	37			50			(30		)	59			25			53			23			57			101
Less: Impacts of tax	8			10			(5		)	22			10			20			8			13			38
Total net realized capital gains (losses) excluded from core earnings	$	29		$	40		$	(25	)	$	37		$	15		$	33		$	15		$	44		$	63


[1]	Effective January 1, 2018, with adoption of new accounting guidance for equity securities at fair value, includes all changes in fair value and trading gains and losses for equity securities.


[2]	Includes changes in value of non-qualifying derivatives, including credit derivatives and interest rate derivatives used to manage duration.


[3]	Includes periodic net coupon settlements on credit derivatives which are included in core earnings.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPOSITION OF INVESTED ASSETS

CONSOLIDATED



	Sept 30 2018				Jun 30 2018				Mar 31 2018				Dec 31 2017				Sept 30 2017
	Amount [1]		Percent		Amount		Percent		Amount		Percent		Amount		Percent		Amount [1]		Percent
Total investments	$	46,134	100.0	%	$	45,648	100.0	%	$	44,432	100.0	%	$	45,146	100.0	%	$	42,246	100.0	%
Asset-backed securities	$	1,191	3.3	%	$	994	2.7	%	$	911	2.5	%	$	1,126	3.0	%	$	1,350	4.0	%
Collateralized debt obligations	1,326		3.7	%	1,089		3.0	%	1,144		3.2	%	1,260		3.4	%	1,402		4.1	%
Commercial mortgage-backed securities	3,657		10.2	%	3,494		9.7	%	3,311		9.2	%	3,336		8.9	%	2,969		8.7	%
Corporate	13,492		37.3	%	13,349		36.9	%	12,634		35.2	%	12,804		34.7	%	11,372		33.4	%
Foreign government/government agencies	952		2.6	%	1,133		3.1	%	1,082		3.0	%	1,110		3.0	%	984		2.9	%
Municipal [2]	10,602		29.3	%	11,142		30.8	%	11,544		32.1	%	12,485		33.8	%	11,203		32.9	%
Residential mortgage-backed securities	3,118		8.5	%	3,207		8.9	%	3,086		8.6	%	3,044		8.3	%	2,590		7.7	%
U.S. Treasuries	1,828		5.1	%	1,786		4.9	%	2,212		6.2	%	1,799		4.9	%	2,156		6.3	%
Total fixed maturities, available-for-sale	$	36,166	100.0	%	$	36,194	100.0	%	$	35,924	100.0	%	$	36,964	100.0	%	$	34,026	100.0	%
U.S. government/government agencies	$	4,735	13.1	%	$	4,722	13.0	%	$	4,972	13.8	%	$	4,536	12.3	%	$	4,324	12.7	%
AAA	6,379		17.6	%	6,027		16.7	%	5,812		16.2	%	6,072		16.4	%	5,535		16.3	%
AA	7,085		19.6	%	7,096		19.6	%	6,942		19.3	%	7,810		21.1	%	7,211		21.2	%
A	8,543		23.6	%	8,846		24.4	%	8,873		24.7	%	8,919		24.1	%	7,906		23.2	%
BBB	8,232		22.8	%	8,157		22.5	%	7,839		21.8	%	7,931		21.5	%	7,350		21.6	%
BB	721		2.0	%	822		2.3	%	890		2.5	%	1,005		2.7	%	959		2.8	%
B	446		1.2	%	498		1.4	%	529		1.5	%	618		1.7	%	595		1.7	%
CCC	23		0.1	%	23		0.1	%	64		0.2	%	69		0.2	%	139		0.4	%
CC & below	2		—	%	3		—	%	3		—	%	4		—	%	7		0.1	%
Total fixed maturities, available-for-sale	$	36,166	100.0	%	$	36,194	100.0	%	$	35,924	100.0	%	$	36,964	100.0	%	$	34,026	100.0	%


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


[2]	Primarily comprised of $7.9 billion in Property & Casualty, $2.5 billion in Group Benefits, and $178 in Corporate as of September 30, 2018.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTED ASSET EXPOSURES

SEPTEMBER 30, 2018



	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	$	3,578	$	3,523	7.6	%
Utilities	2,180		2,155		4.7	%
Consumer non-cyclical	2,018		1,982		4.3	%
Technology and communications	1,722		1,726		3.7	%
Energy [1]	1,164		1,163		2.5	%
Capital goods	1,157		1,145		2.5	%
Consumer cyclical	1,005		996		2.2	%
Basic industry	622		622		1.4	%
Transportation	571		565		1.2	%
Other	658		650		1.4	%
Total	$	14,675	$	14,527	31.5	%
Top Ten Exposures by Issuer [2]
New York City Transitional Finance Authority	$	284	$	292	0.6	%
New York State Dormitory Authority	278		286		0.6	%
Commonwealth of Massachusetts	213		221		0.5	%
State of California	203		212		0.5	%
Wells Fargo & Company	190		189		0.4	%
Goldman Sachs Group Inc.	194		187		0.4	%
New York City Municipal Water Finance Authority	173		181		0.4	%
Massachusetts St. Development Finance Agency	174		176		0.4	%
JP Morgan Chase & Co.	177		174		0.4	%
Morgan Stanley	168		165		0.3	%
Total	$	2,054	$	2,083	4.5	%


[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.

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 five reporting segments: Commercial Lines, Personal Lines, Property & Casualty Other Operations ("P&C Other Operations"), Group Benefits, and Mutual Funds, 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. 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. On November 1, 2017, Hartford Life and Accident Insurance Company (HLA), a wholly owned subsidiary of the Company, completed the acquisition of Aetna's U.S. group life and disability insurance business through a reinsurance transaction. Aetna's group life and disability revenue and earnings since the acquisition date are included in the operating results of the Company's Group Benefits reporting segment.

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 products are sold primarily through retail, bank trust and registered investment advisor channels.

The Company includes in the Corporate category investment management fees and expenses related to managing third party business, including management of the invested assets of the Talcott Resolution life and annuity run-off business sold in the second quarter of 2018, discontinued operations related to the sale of Talcott Resolution, reserves for run-off structured settlement and terminal funding agreement liabilities, 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. In addition, Corporate includes investment earnings from a 9.7% ownership interest in the limited partnership that acquired Talcott Resolution.

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, redemptions, net flows, account value, policies in-force, premium retention, renewal earned and written price increases and policy count retention. Premium retention is defined as renewal premium written in the current period divided by total premium written in the prior period. Renewal earned price increases represent the portions of the prior and current period renewal written price increases that have been earned based on the period of time the underlying renewal policies have been in effect. Renewal written price increases for Commercial Lines represent the combined effect of rate changes, amount of insurance and individual risk pricing decisions per unit of exposure since the prior year on policies that renewed and includes the combined effect of rate changes, amount of insurance and other changes in exposure. For Personal Lines, renewal written price increases represent the total change in premium per policy since the prior year on those policies that renewed and includes the combined effect of rate changes, amount of insurance and other changes in exposure. For Personal Lines, other changes in exposure include, but are not limited to, the effect of changes in number of drivers, vehicles and incidents, as well as changes in customer policy elections, such as deductibles and limits.

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) less fee income 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 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.

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 and the events are unpredictable as to timing or loss amount. Catastrophe losses are not included in earnings or losses and loss adjustment expense reserves prior to occurrence of the catastrophe event. The Company believes that a discussion of the effect of catastrophes is meaningful for investors to understand the variability of periodic earnings.

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 underlying 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, integration and transaction costs in connection with an acquired business, pension settlements, loss on extinguishment of debt, gains and losses on reinsurance transactions, income tax benefit from reduction in deferred income tax valuation allowance, impact of tax reform on net deferred tax assets, and results of discontinued operations. 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 (net of tax) 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. Results from discontinued operations are excluded from core earnings for businesses held for sale because such results could obscure trends in our ongoing businesses that are valuable to our investors' ability to assess the Company's financial performance. Net income (loss) and income from continuing operations (during periods when the Company reports significant discontinued operations) are the most directly comparable U.S. GAAP measures to core earnings. Income from continuing operations is net income, excluding the income (loss) from discontinued operations. Core earnings should not be considered as a substitute for net income (loss) or income (loss) from continuing operations and does not reflect the overall profitability of the Company’s business. Therefore, The Company believes that it is useful for investors to evaluate net income (loss), income (loss) from continuing operations and core earnings when reviewing the Company’s performance. A reconciliation of net income to core earnings is set forth on page 2.

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 (loss) per share and income (loss) from continuing operations per share are the most directly comparable U.S. GAAP measures. Core earnings per share should not be considered as a substitute for net income (loss) per share or income (loss) from continuing operations 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 net income (loss) per share, income (loss) from continuing operations per share and core earnings per share when reviewing our performance.

Book value per diluted share is a U.S. GAAP financial measure that represents a per share assessment of the value of a company's equity. It is calculated by dividing (a) common stockholders' equity by (b) common shares outstanding and dilutive potential common shares. The Company provides book value per diluted share to enable investors to assess the value of the Company’s equity. Reconciliations of book value per common share and book value per diluted share to book value per common share, excluding AOCI and book value per diluted share, excluding AOCI, are set forth on page 1.

The Company provides different measures of the return on stockholders' equity (“ROE”). Core earnings ROE is calculated based on non-GAAP financial measures. Core earnings ROE is calculated by dividing (a) core earnings for the prior four fiscal quarters by (b) average common stockholders' equity, excluding AOCI. Net income ROE is the most directly comparable U.S. GAAP measure. Net income ROE 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, 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 core earnings ROE 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 Net income ROE to Core earnings ROE is set forth below:



	LAST TWELVE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017
Net income (loss) ROE	(14.0	%)	(15.4	%)	(19.3	%)	(20.6	%)	2.7	%	3.9	%	5.4	%
Less: Net realized capital gains (losses), excluded from core earnings, before tax	0.8	%	0.7	%	0.7	%	1.1	%	(0.2	%)	(0.2	%)	(0.3	)%
Less: Loss on reinsurance transactions, before tax	—	%	—	%	—	%	—	%	(3.6	%)	(3.6	%)	(3.7	)%
Less: Pension settlement, before tax	—	%	—	%	(5.0	%)	(4.9	%)	(4.2	%)	(4.2	%)	—	%
Less: Integration and transaction costs associated with an acquired business	(0.3	%)	(0.3	%)	(0.2	%)	(0.1	%)	—	%	—	%	—	%
Less: Income tax benefit (expense) on items not included in core earnings	(6.1	%)	(6.1	%)	(4.3	%)	(4.4	%)	3.2	%	3.5	%	2.4	%
Less: Income (loss) from discontinued operations, after tax	(18.8	%)	(18.4	%)	(18.4	%)	(18.9	%)	1.8	%	1.8	%	1.9	%
Less: Impact of AOCI, excluded from denominator of core earnings ROE	0.1	%	0.3	%	0.1	%	(0.1	%)	(0.2	%)	(0.3	%)	—	%
Core earnings ROE	10.3	%	8.4	%	7.8	%	6.7	%	5.9	%	6.9	%	5.1	%

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 (loss) for the Company's P&C businesses are set forth on pages 8, 10, 14 and 19.

Underlying underwriting gain (loss) represents underwriting gain (loss) before current accident year ("CAY") catastrophes and prior accident year development ("PYD"). The most directly comparable GAAP measure is net income (loss). The Company believes underlying underwriting gain (loss) is important to understand the Company’s periodic earnings because the volatile and unpredictable nature (i.e., the timing and amount) of catastrophes and prior accident year reserve development could obscure underwriting trends. A reconciliation of net income (loss) to underlying underwriting gain (loss) for individual reporting segments is set forth below.

COMMERCIAL LINES



	THREE MONTHS ENDED																			NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017		Mar 31 2017		Sept 30 2018			Sept 30 2017
Net income	$	289		$	372		$	298		$	286		$	90		$	258	$	231	$	959		$	579
Less: Net investment income	250			242			258			225			241			240		243		750			724
Less: Other	30			40			(6		)	47			13			33		12		64			58
Add back: Income tax expense	61			83			68			162			15			108		92		212			215
Underwriting gain (loss)	70			173			114			176			(149		)	93		68		357			12
Add back: Unfavorable (favorable) PYD	(53		)	(73		)	(19		)	(34		)	(3		)	—		15		(145		)	12
Add back: Loss and LAE related to CAY catastrophes	95			74			69			(21		)	270			63		71		238			404
Underlying underwriting gain (loss)	$	112		$	174		$	164		$	121		$	118		$	156	$	154	$	450		$	428

PERSONAL LINES



	THREE MONTHS ENDED																					NINE MONTHS ENDED
	Sept 30 2018			Jun 30 2018			Mar 31 2018			Dec 31 2017			Sept 30 2017			Jun 30 2017			Mar 31 2017			Sept 30 2018			Sept 30 2017
Net income (loss)	$	51		$	6		$	89		$	(74	)	$	8		$	24		$	33		$	146		$	65
Less: Net investment income	39			37			40			34			36			35			36			116			107
Less: Other	11			10			3			11			9			8			4			24			21
Add back: Income tax expense (benefit)	13			(1		)	21			6			—			6			14			33			20
Underwriting gain (loss)	14			(42		)	67			(113		)	(37		)	(13		)	7			39			(43		)
Add back: Unfavorable (favorable) PYD	(18		)	10			(13		)	(25		)	2			(10		)	(4		)	(21		)	(12		)
Add back: Loss and LAE related to CAY catastrophes	74			114			34			200			82			92			79			222			253
Underlying underwriting gain (loss)	$	70		$	82		$	88		$	62		$	47		$	69		$	82		$	240		$	198

Underlying combined ratio is a non-GAAP financial measure. Combined ratio is the most directly comparable GAAP measure. Underlying combined ratio represents the combined ratio before catastrophes and prior accident year development. 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 underlying combined ratio for Property & Casualty, Commercial Lines, and Personal Lines is set forth on pages 9, 12 and 16, 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, and believes is an important measure of the Mutual Funds segment’s 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 the Mutual Funds segment 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 Mutual Funds business. Therefore, the Company believes it is important for investors to evaluate both ROA, core earnings, and ROA when reviewing the Mutual Funds segment performance. ROA, core earnings is calculated by dividing core earnings by a daily average AUM.

Net investment income, excluding limited partnerships is the amount of net investment income earned from invested assets excluding the net investment income related to limited partnerships and other alternative investments. The company believes that net investment income, excluding limited partnerships, provides investors with an important measure of the trend in investment earnings because it excludes the impact of the volatility in returns related to limited partnerships and other alternative investments.

CONSOLIDATED



	THREE MONTHS ENDED														NINE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
Total net investment income	$	444	$	428	$	451	$	394	$	404	$	395	$	410	$	1,323	$	1,209
Limited partnerships and other alternative investments ("Limited Partnerships")	45		39		73		29		48		39		58		157		145
Net investment income excluding limited partnerships	$	399	$	389	$	378	$	365	$	356	$	356	$	352	$	1,166	$	1,064

PROPERTY & CASUALTY



	THREE MONTHS ENDED														NINE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
Total net investment income	$	311	$	301	$	322	$	281	$	303	$	302	$	310	$	934	$	915
Limited partnerships and other alternative investments	35		33		58		23		34		32		45		126		111
Net investment income excluding limited partnerships	$	276	$	268	$	264	$	258	$	269	$	270	$	265	$	808	$	804

GROUP BENEFITS



	THREE MONTHS ENDED														NINE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
Total net investment income	$	117	$	115	$	121	$	103	$	95	$	88	$	95	$	353	$	278
Limited partnerships and other alternative investments	10		6		15		6		14		7		13		31		34
Net investment income excluding limited partnerships	$	107	$	109	$	106	$	97	$	81	$	81	$	82	$	322	$	244

Annualized investment yield, excluding limited partnerships is the annualized net investment income excluding limited partnerships and other alternative investments divided by the monthly average invested assets at amortized cost, excluding repurchase agreement and securities lending collateral, derivatives book value, and limited partnership and other alternative invested assets. The company believes that annualized net investment income, excluding limited partnerships, provides investors with an important measure of the trend in investment earnings because it excludes the impact of the volatility in returns related to limited partnerships and other alternative investments.

CONSOLIDATED



	THREE MONTHS ENDED														NINE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
Annualized investment yield	4.0	%	3.9	%	4.2	%	3.8	%	4.1	%	4.1	%	4.2	%	4.0	%	4.1	%
Impact on annualized investment yield of limited partnerships and other alternative investments	(0.3	)%	(0.2	)%	(0.5	)%	(0.1	)%	(0.3	)%	(0.3	)%	(0.4	)%	(0.3	)%	(0.3	)%
Annualized investment yield excluding limited partnerships and other alternative investments	3.7	%	3.7	%	3.7	%	3.7	%	3.8	%	3.8	%	3.8	%	3.7	%	3.8	%

PROPERTY & CASUALTY



	THREE MONTHS ENDED														NINE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
Annualized investment yield	4.1	%	4.0	%	4.3	%	3.8	%	4.0	%	4.1	%	4.2	%	4.1	%	4.1	%
Impact on annualized investment yield of limited partnerships and other alternative investments	(0.3	)%	(0.2	)%	(0.6	)%	(0.1	)%	(0.3	)%	(0.3	)%	(0.5	)%	(0.4	)%	(0.3	)%
Annualized investment yield excluding limited partnerships and other alternative investments	3.8	%	3.8	%	3.7	%	3.7	%	3.7	%	3.8	%	3.7	%	3.7	%	3.8	%

GROUP BENEFITS



	THREE MONTHS ENDED														NINE MONTHS ENDED
	Sept 30 2018		Jun 30 2018		Mar 31 2018		Dec 31 2017		Sept 30 2017		Jun 30 2017		Mar 31 2017		Sept 30 2018		Sept 30 2017
Annualized investment yield	4.1	%	4.1	%	4.3	%	3.8	%	4.9	%	4.5	%	4.8	%	4.2	%	4.8	%
Impact on annualized investment yield of limited partnerships and other alternative investments	(0.2	)%	(0.2	)%	(0.5	)%	(0.1	)%	(0.6	)%	(0.2	)%	(0.5	)%	(0.3	)%	(0.5	)%
Annualized investment yield excluding limited partnerships and other alternative investments	3.9	%	3.9	%	3.8	%	3.7	%	4.3	%	4.3	%	4.3	%	3.9	%	4.3	%