~~Basis of Presentation~~BASIS OF PRESENTATION

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

On September 30, 2020, the Company entered into a definitive agreement to sell all of the issued and outstanding equity of Navigators Holdings (Europe) N.V., a Belgium holding company, and its subsidiaries, Bracht, Deckers & Mackelbert N.V. (“BDM”) and Assurances Contintales Contintale Verzekeringen N.V. (“ASCO”), (collectively referred to as "Continental Europe Operations"). For further discussion of this transaction see Note 1617 - Business Disposition.

The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, which differ materially from the accounting practices prescribed by various insurance regulatory authorities. These Condensed Consolidated Financial Statements and Notes should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's 2020 Form 10-K Annual Report. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year.

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

Company's significant accounting policies are summarized in Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in the Company's 2020 Form 10-K Annual Report.

~~Consolidation~~CONSOLIDATION

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

~~Use of Estimates~~USE OF ESTIMATES

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

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

The novel strain of coronavirus, specifically identified as the Coronavirus Disease 2019 (“COVID-19”), continues to impact the global economy. The ultimate impact of COVID-19 and the extent to which COVID-19 continues to impact the Company’s business, results of operations and financial condition will depend on the duration and severity of the pandemic, the duration and severity of the economic downturn and the degree to which federal, state and local government actions to vaccinate the public and stimulate the economy are effective. Our estimates, judgments and assumptions related to COVID-19 could ultimately differ over time.

~~Reclassifications~~RECLASSIFICATIONS

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

The Company currently conducts business principally in 5 reporting segments including Commercial Lines, Personal Lines, Property & Casualty Other Operations, Group Benefits and Hartford Funds, as well as a Corporate Category.

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

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

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

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

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

~~In connection with the acquisition of Navigators Group, the~~The Company has overseas deposits in Other ~~Invested Assets~~Investments of ~~$61~~$62 and $54 as of ~~March 31,~~September 30, 2021 and December 31, 2020, respectively, which are measured at fair value using the net asset value as a practical expedient.

~~Fixed Maturities, Equity Securities, Short-term Investments, and Derivatives~~FIXED MATURITIES, EQUITY SECURITIES, SHORT-TERM INVESTMENTS, AND DERIVATIVES

Valuation Techniques

The Company generally determines fair values using valuation techniques that use prices, rates, and other relevant information evident from market transactions involving identical or similar instruments. Valuation techniques also include, where appropriate, estimates of future cash flows that are converted into a single discounted amount using current market expectations. The Company uses a "waterfall" approach

comprised of the following pricing sources and techniques, which are listed in priority order:

•Quoted prices, unadjusted, for identical assets or liabilities in active markets, which are classified as Level 1.

•Prices from third-party pricing services, which primarily utilize a combination of techniques. These services utilize recently reported trades of identical, similar, or benchmark securities making adjustments for market observable inputs available through the reporting date. If there are no recently reported trades, they may use a discounted cash flow technique to develop a price using expected cash flows based upon the anticipated future performance of the underlying collateral discounted at an estimated market rate. Both techniques develop prices that consider the time value of future cash flows and provide a margin for risk, including liquidity and credit risk. Most prices provided by third-party pricing services are classified as Level 2 because the inputs used in pricing the securities are observable. However, some securities that are less liquid or trade less actively are classified as Level 3. Additionally, certain long-dated securities, such as municipal securities ~~and bank loans, include benchmark interest rate or credit spread assumptions that are not observable in the marketplace and are thus classified as Level 3.~~

and bank loans, include benchmark interest rate or credit spread assumptions that are not observable in the marketplace and are thus classified as Level 3.

•Internal matrix pricing ~~which~~ is a valuation process internally developed for private placement securities for which the Company is unable to obtain a price from a third-party pricing service. Internal pricing matrices determine credit spreads that, when combined with risk-free rates, are applied to contractual cash flows to develop a price. The Company develops credit spreads using ~~market based~~market-based data for public securities adjusted for credit spread differentials between public and private securities, which are obtained from a survey of multiple private placement brokers. The market-based reference credit spread considers the issuer’s sector, financial strength, and term to maturity, using an independent public security index, while the credit spread differential considers the non-public nature of the security. Securities priced using internal matrix pricing are classified as Level 2 because the significant inputs are observable or can be corroborated with observable data.

•Independent broker quotes, which are typically non-binding, use inputs that can be difficult to corroborate with observable ~~market based~~market-based data. Brokers may use present value techniques using assumptions specific to the security types, or they may use recent transactions of similar securities. Due to the lack of transparency in the process that brokers use to develop prices, valuations that are based on independent broker quotes are classified as Level 3.

The fair value of derivative instruments is determined primarily using a discounted cash flow model or option model technique and incorporates counterparty credit risk. In some cases, quoted market prices for exchange-traded and over-the-counter ("OTC") cleared derivatives may be used and in other cases independent broker quotes may be used. The pricing valuation models primarily use inputs that are observable in the market or can be corroborated by observable market data. The valuation of certain derivatives may include significant inputs that are unobservable, such as volatility levels, and reflect the Company’s view of what other market participants would use when pricing such instruments.

Valuation Controls

The process for determining the fair value of investments is monitored by the Valuation Committee, which is a ~~cross-~~

~~functional~~cross-functional group of senior management within the Company. The purpose of the Valuation Committee is to provide oversight of the pricing policy, procedures, and controls, including approval of valuation methodologies and pricing sources. The Valuation Committee reviews market data trends, pricing statistics and trading statistics to ensure that prices are reasonable and consistent with our fair value framework. Controls and procedures used to assess third-party pricing services are reviewed by the Valuation Committee, including the results of annual due-diligence reviews. Controls include, but are not limited to, reviewing daily and monthly price changes, stale prices, and missing prices and comparing new trade prices to third-party pricing services, weekly price changes to published bond index prices, ~~of a corporate bond index,~~ and daily OTC derivative market valuations to counterparty valuations. The Company has a dedicated pricing ~~unit~~group that works with trading and investment professionals to challenge ~~the price~~prices received by a ~~third party~~third-party pricing source if the Company believes that the valuation received does not accurately reflect the fair value. New valuation models and changes to current models require approval by the Valuation Committee. In addition, the Company’s enterprise-wide Operational Risk Management function provides an independent review of the suitability and reliability of model inputs, as well as an analysis of significant changes to current models.

Valuation Inputs

Quoted prices for identical assets in active markets are considered Level 1 and consist of on-the-run U.S. Treasuries, money market funds, exchange-traded equity securities, open-ended mutual funds, certain short-term investments, and exchange traded futures and option contracts.

As of ~~March 31,~~September 30, 2021 and December 31, 2020, the fair values of the Company's level 3 derivatives were ~~$0 and~~ less than $1 ~~respectively.~~for both periods.

The table above excludes certain securities for which fair values are predominately based on independent broker quotes. While the Company does not have access to the significant unobservable inputs that independent brokers may use in their pricing process, the Company believes brokers likely use inputs similar to those used by the Company and third-party pricing services to price similar instruments. As such, in their pricing models, brokers likely use estimated loss severity rates, prepayment rates, constant default rates and credit spreads. Therefore, similar to non-broker priced securities, increases in these inputs would generally cause fair values to decrease. As of ~~March 31,~~September 30, 2021, 0no significant adjustments were made by the Company to broker prices received.

~~Level~~

LEVEL 3 ~~Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs~~ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS USING SIGNIFICANT UNOBSERVABLE INPUTS

The Company uses derivative instruments to manage the risk associated with certain assets and liabilities. However, the derivative instrument may not be classified within the same fair value hierarchy level as the associated asset or liability. Therefore, the realized and unrealized gains and losses on derivatives reported in the Level 3 rollforward may be offset by realized and unrealized gains and losses of the associated assets and liabilities in other line items of the financial statements.

Financial Assets and Liabilities Not Carried at Fair Value
March 31, 2021 December 31, 2020
Fair Value Hierarchy Level Carrying Amount [1] Fair Value Fair Value Hierarchy Level Carrying Amount [1] Fair Value
Assets
Mortgage loans Level 3 $ 4,588 $ 4,768 Level 3 $ 4,493 $ 4,792
Liabilities
Other policyholder funds and benefits payable Level 3 $ 681 $ 683 Level 3 $ 701 $ 703
Senior notes [2] Level 2 $ 3,263 $ 3,965 Level 2 $ 3,262 $ 4,363
Junior subordinated debentures [2] Level 2 $ 1,090 $ 1,128 Level 2 $ 1,090 $ 1,107

The Company has elected the fair value option for certain investments in residual interests of securitizations in order to reflect changes in fair value in earnings. These instruments are included within other investments on the Condensed Consolidated Balance Sheets and changes in the fair value of these securities are reported in net realized gains and losses.

As of September 30, 2021 and December 31, 2020, the fair value of assets using the fair value option was $75 and $0, respectively.

For the three and nine months ended September 30, 2021 realized gains (losses) related to the change in fair value of assets using the fair value option were less than $(1). For the three and nine months ended September 30, 2020 there were no realized gains (losses) related to the change in fair value of assets using the fair value option.

Proceeds from the sales of fixed maturities, AFS totaled ~~$4.2~~$2.9 billion and ~~$3.1~~$11.1 billion for the three and nine months ended ~~March 31,~~September 30, 2021 respectively, and $4.5 billion and $11.7 billion for the three and nine months ended September 30, 2020, respectively.

Accrued Interest Receivable on Fixed Maturities, AFS and Mortgage Loans

As of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company reported accrued interest receivable related to fixed maturities, AFS of ~~$334~~$326 and $327, respectively, and accrued interest receivable related to mortgage loans of $15 and $14, respectively. These amounts are recorded in other assets on the Condensed Consolidated Balance Sheets and are not included in the carrying value of the fixed maturities or mortgage loans. The Company does not include the current accrued interest receivable balance when estimating the ACL. The Company has a policy to write-off accrued interest receivable balances that are more than 90 days past due. Write-offs of accrued interest receivable are recorded as a credit loss component of net realized ~~capital~~ gains and losses.

Interest income on fixed maturities and mortgage loans is accrued unless it is past due over 90 days or management deems the interest uncollectible.

Recognition and Presentation of Intent-to-Sell Impairments and ACL on Fixed Maturities, AFS

The Company will record an "intent-to-sell impairment" as a reduction to the amortized cost of fixed maturities, AFS in an unrealized loss position if the Company intends to sell or it is more likely than not that the Company will be required to sell the fixed maturity before a recovery in value. A corresponding charge is recorded in net realized ~~capital~~ losses equal to the difference

between the fair value on the impairment date and the amortized cost basis of the fixed maturity before recognizing the impairment.

When fixed maturities are in an unrealized loss position and the Company does not record an intent-to-sell impairment, the Company will record an ACL for the portion of the unrealized loss

due to a credit loss. Any remaining unrealized loss on a fixed maturity after recording an ACL is the non-credit amount and is recorded in OCI. The ACL is the excess of the amortized cost over the greater of the Company's best estimate of the present value of expected future cash flows or the security's fair value. Cash flows are discounted at the effective yield that is used to record interest income. The ACL cannot exceed the unrealized loss and, therefore, it may fluctuate with changes in the fair value of the fixed maturity if the fair value is greater than the Company's best estimate of the present value of expected future cash flows. The initial ACL and any subsequent changes are recorded in net realized ~~capital~~ gains and losses. The ACL is written off against the amortized cost in the period in which all or a portion of the related fixed maturity is determined to be uncollectible.

Developing the Company’s best estimate of expected future cash flows is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions regarding the future performance. The Company's considerations include, but are not limited to, (a) changes in the financial condition of the issuer and/or the underlying collateral, (b) whether the issuer is current on contractually obligated interest and principal payments, (c) credit ratings, (d) payment structure of the security and (e) the extent to which the fair value has been less than the amortized cost of the security.

For non-structured securities, assumptions include, but are not limited to, economic and industry-specific trends and fundamentals, instrument-specific developments including changes in credit ratings, industry earnings multiples and the

issuer’s ability to restructure, access capital markets, and execute asset sales.

For structured securities, assumptions include, but are not limited to, various performance indicators such as historical and projected default and recovery rates, credit ratings, current and projected delinquency rates, loan-to-value ratios ("LTVs"),

average cumulative collateral loss rates that vary by vintage year, prepayment speeds, and property value declines. These assumptions require the use of significant management judgment

Estimated maturities may differ from contractual maturities due to call or prepayment provisions. Due to the potential for variability in payment speeds (i.e. prepayments or extensions), mortgage-backed and asset-backed securities are not categorized by contractual maturity.

Concentration of Credit Risk

The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification, where

applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk. The Company had 0no investment exposure to any credit concentration risk of a single issuer greater than 10% of the Company's stockholders' equity as of ~~March 31,~~September 30, 2021 or December 31, 2020 other than U.S. government securities and certain U.S. government agencies.

As of ~~March 31,~~September 30, 2021, fixed maturities, AFS in an unrealized loss position consisted of ~~978~~1,057 instruments, primarily in the corporate sectors, most notably financial services, technology and communications, capital goods, and ~~financial services,~~utilities, as well as ~~municipal bonds and CMBS~~U.S. Treasuries which were depressed largely due to higher interest rates and/or wider credit spreads since the purchase date. As of ~~March 31,~~September 30, 2021, ~~97%~~98% of these fixed maturities were depressed less than 20% of cost or amortized cost. The increase in unrealized losses during the ~~three~~nine months ended ~~March 31,~~September 30, 2021, was primarily attributable to higher interest rates, partially offset by tighter credit spreads.

Most of the fixed maturities depressed for twelve months or more relate to the corporate and CMBS sectors which were primarily depressed because current market spreads are wider than at the respective purchase dates. Additionally, certain corporate fixed maturities were also depressed because of their variable-rate coupons and long-dated maturities. The Company neither has an intention to sell nor does it expect to be required to sell the fixed maturities outlined in the preceding discussion. The decision to record credit losses on fixed maturities, AFS in the form of an ACL requires us to make qualitative and quantitative estimates of expected future cash flows. Given the uncertainty about the ultimate impact of the COVID-19 pandemic on issuers of these securities, actual cash flows could ultimately deviate significantly from our expectations resulting in realized losses in future periods.

~~Mortgage Loans~~MORTGAGE LOANS

ACL on Mortgage Loans

The Company reviews mortgage loans on a quarterly basis to estimate the ACL with changes in the ACL recorded in net realized ~~capital~~ gains and losses. Apart from an ACL recorded on individual mortgage loans where the borrower is experiencing financial difficulties, the Company records an ACL on the pool of mortgage loans based on lifetime expected credit losses. The Company utilizes a third-party forecasting model to estimate lifetime expected credit losses at a loan level under multiple economic scenarios. The scenarios use macroeconomic data provided by an internationally recognized economics firm that generates forecasts of varying economic factors such as GDP growth, unemployment and interest rates. The economic scenarios are projected over 10 years. The first two to four years of the 10-year period assume a specific modeled economic scenario (including moderate upside, moderate recession and severe recession scenarios) and then revert to historical long-term assumptions over the remaining period. Using these economic scenarios, the forecasting model projects property-specific operating income and capitalization rates used to estimate the value of a future operating income stream. The operating income and the property valuations derived from capitalization rates are compared to loan payment and principal amounts to create debt service coverage ratios ("DSCRs") and loan-to-value ratios ("LTVs") over the forecast period. The model overlays historical data about mortgage loan performance based on DSCRs and LTVs and projects the probability of default, amount of loss given a default and resulting expected loss through maturity for each loan under each economic scenario. Economic scenarios are probability-weighted based on a statistical analysis of the forecasted economic factors and qualitative analysis. The Company records the change in the ACL on mortgage loans based on the weighted-average expected credit losses across the selected economic scenarios.

When a borrower is experiencing financial difficulty, including when foreclosure is probable, the Company measures an ACL on individual mortgage loans. The ACL is established for any shortfall between the amortized cost of the loan and the fair value of the collateral less costs to sell. Estimates of collectibility from an individual borrower require the use of significant management judgment and include the probability and timing of borrower default and loss severity estimates. In addition, cash flow projections may change based upon new information about the borrower's ability to pay and/or the value of underlying collateral such as changes in projected property value estimates. As of ~~March 31,~~September 30, 2021, the Company did 0tnot have any mortgage loans for which an ACL was established on an individual basis.

There were 0no mortgage loans held-for-sale as of ~~March 31,~~September 30, 2021 or December 31, 2020. For the three and nine months ended ~~March 31,~~September 30, 2021 and 2020, respectively, the Company had 0no mortgage loans that have had extensions

or restructurings other than what is allowable under the original terms of the contract.


ACL on Mortgage Loans	ACL on Mortgage Loans						ACL on Mortgage Loans
		Three Months Ended March 31,				Three Months Ended September 30,						Nine Months Ended September 30,
		2021		2020				2021		2020			2021		2020
ACL as of beginning of period	ACL as of beginning of period	$	38	$	0		ACL as of beginning of period	$	24	$	43		$	38	$	—
Cumulative effect of accounting changes [1]	Cumulative effect of accounting changes [1]			19			Cumulative effect of accounting changes [1]								19
Adjusted beginning ACL	Adjusted beginning ACL	38		19			Adjusted beginning ACL	24		43			38		19
Current period provision (release)	Current period provision (release)	(4)		2			Current period provision (release)	2		(5)			(12)		19

ACL as of March 31,		$	34	$	21
ACL as of September 30,							ACL as of September 30,	$	26	$	38		$	26	$	38

[1]Represents the adjustment to the ACL recorded on adoption of accounting guidance for credit losses on January 1, 2020. For further information, see the Financial Instruments - Credit Losses section within Note 1 - Basis of Presentation and Significant Accounting Policies, included in The Hartford's 2020 Form 10-K Annual Report.

~~During 2020, the Company increased the estimate of the ACL in response to significant economic stress experienced as a result of the COVID-19 pandemic.~~ The ~~decrease~~increase in the allowance for the three months ended ~~March 31,~~September 30, 2021, is driven by net additions of new loans. The decrease in the allowance for the nine months ended September 30, 2021, is the result of improved economic scenarios, including improved GDP growth and unemployment, and higher property valuations as compared to the prior ~~quarter.~~periods, partially offset by an increase driven by net additions of new loans. We continue to monitor the impact on our mortgage loan portfolio from borrower behavior in response to the economic stress. Borrowers with lower LTVs have an incentive to continue to make payments of principal and/or interest in order to preserve the equity they have in the underlying commercial real estate properties.During the first nine months of 2020, the Company increased the estimate of the ACL in response to significant economic stress experienced as a result of the COVID-19 pandemic.

The weighted-average LTV ratio of the Company’s mortgage loan portfolio was ~~55%~~52% as of ~~March 31,~~September 30, 2021, while the weighted-average LTV ratio at origination of these loans was ~~61%~~60%. LTV ratios compare the loan amount to the value of the underlying property collateralizing the loan with property values based on appraisals updated no less than annually. Factors considered in estimating property values include, among other things, actual and expected property cash flows, geographic market data and the ratio of the property's net operating income to its value. DSCR compares a property’s net operating income to the borrower’s principal and interest payments and are updated no less than annually through reviews of underlying properties.


Mortgage Loans by Region	Mortgage Loans by Region									Mortgage Loans by Region
		March 31, 2021				December 31, 2020					September 30, 2021				December 31, 2020
		Amortized Cost		Percent of Total		Amortized Cost		Percent of Total			Amortized Cost		Percent of Total		Amortized Cost		Percent of Total
East North Central	East North Central	$	279	6.0	%	$	290	6.4	%	East North Central	$	294	5.7	%	$	290	6.4	%

Middle Atlantic	Middle Atlantic	290		6.3	%	291		6.4	%	Middle Atlantic	304		5.9	%	291		6.4	%
Mountain	Mountain	295		6.4	%	254		5.6	%	Mountain	418		8.1	%	254		5.6	%
New England	New England	396		8.6	%	397		8.8	%	New England	394		7.7	%	397		8.8	%
Pacific	Pacific	1,044		22.6	%	1,001		22.1	%	Pacific	1,216		23.7	%	1,001		22.1	%
South Atlantic	South Atlantic	1,062		23.0	%	1,038		22.9	%	South Atlantic	1,407		27.4	%	1,038		22.9	%
West North Central	West North Central	44		0.9	%	44		1.0	%	West North Central	44		0.9	%	44		1.0	%
West South Central	West South Central	431		9.3	%	433		9.5	%	West South Central	388		7.6	%	433		9.5	%
Other [1]	Other [1]	781		16.9	%	783		17.3	%	Other [1]	667		13.0��	%	783		17.3	%
Total mortgage loans	Total mortgage loans	4,622		100.0	%	4,531		100.0	%	Total mortgage loans	5,132		100.0	%	4,531		100.0	%
ACL	ACL	(34)				(38)				ACL	(26)				(38)
Total mortgage loans, net of ACL	Total mortgage loans, net of ACL	$	4,588			$	4,493			Total mortgage loans, net of ACL	$	5,106			$	4,493

[1]Primarily represents loans collateralized by multiple properties in various regions.

principal of ~~$7.1~~$7.9 billion, of which ~~$3.8~~$3.9 billion was serviced on behalf of third parties and ~~$3.3~~$4.0 billion was retained and reported in total investments on the Company's Condensed Consolidated Balance Sheets. As of December 31, 2020, the Company serviced mortgage loans with a total outstanding principal balance of $6.9 billion, of which $3.7 billion was serviced on behalf of third parties and $3.2 billion was retained and reported in total investments on the Company's Condensed Consolidated Balance Sheets. Servicing rights are carried at the lower of cost or fair value and were $0 as of ~~March 31,~~September 30, 2021 and December 31, 2020, because servicing fees were market-level fees at origination and remain adequate to compensate the Company for servicing the loans.

~~Variable Interest Entities~~VARIABLE INTEREST ENTITIES

The Company is engaged with various special purpose entities and other entities that are deemed to be VIEs primarily as an investor through normal investment activities but also as an investment manager.

A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest, such as simple majority kick-out rights, or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of its VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Condensed Consolidated Financial Statements.

Consolidated VIEs

As of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company did 0t hold any securities for which it is the primary beneficiary.

2020, the Company did 0tnot have any securities on loan as part of a securities lending program.

Reverse Repurchase Agreements

From time to time, the Company enters into reverse repurchase agreements where the Company purchases securities and simultaneously agrees to resell the same or substantially the same securities. The maturity of these transactions is generally within one year. The agreements require additional collateral to be transferred to the Company under specified conditions and the Company has the right to sell or re-pledge the securities received. The Company accounts for reverse repurchase agreements as collateralized financing. As of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company reported ~~$16~~$23 and $30, respectively, within short-term investments on the Condensed Consolidated Balance Sheets representing a receivable for the amount of cash transferred to purchase the securities.

Other Collateral Transactions

As of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company pledged collateral of $9 and $34, respectively, of U.S. government securities or cash primarily related to certain bank loan participations committed to through a limited partnership agreement. Amounts also include collateral related to letters of credit.

For disclosure of collateral in support of derivative transactions, refer to the Derivative Collateral Arrangements section in Note 6 - Derivatives of Notes to Condensed Consolidated Financial Statements.

Other Restricted Investments

The Company is required by law to deposit securities with

government agencies in certain states in which it conducts business. As of ~~March 31,~~September 30, 2021 and December 31, 2020, the fair value of securities on deposit was $2.5 billion and $2.6 billion, respectively.

In addition, as of ~~March 31,~~September 30, 2021, the Company held fixed maturities of $682 and short-term investments of ~~$673 and $4, respectively,~~$2 in trust for the benefit of syndicate policyholders, held fixed maturities of ~~$171~~$170 in a Lloyd's of London ("Lloyd's") trust account to provide a portion of the required capital, and maintained other investments of ~~$61~~$62 primarily consisting of overseas deposits in various countries with Lloyd's to support underwriting activities in those countries. As of December 31, 2020, the Company held fixed maturities of $661 and short-term investments of ~~$661 and~~ $26 ~~respectively,~~ in trust for the benefit of syndicate policyholders, held fixed maturities of $175 in a Lloyd's trust account to provide a portion of the required capital, and maintained other investments of $54 primarily consisting of overseas deposits in various countries with Lloyd's to support

The Company utilizes a variety of OTC, OTC-cleared and exchange traded derivative instruments as a part of its overall risk management strategy as well as to enter into replication transactions or income generation covered call transactions. Derivative instruments are used to manage risk associated with interest rate, equity market, credit spread, issuer default, price, and currency exchange rate or volatility. Replication transactions are used as an economical means to synthetically replicate the characteristics and performance of assets that are permissible investments under the Company’s investment policies.

~~Strategies that Qualify for Hedge Accounting~~STRATEGIES THAT QUALIFY FOR HEDGE ACCOUNTING

Some of the Company's derivatives satisfy hedge accounting requirements as outlined in Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements, included in The Hartford’s 2020 Form 10-K Annual Report. Typically, these hedging instruments include interest rate swaps and, to a lesser extent, foreign currency swaps where the terms or expected cash flows of the hedged item closely match the terms of the swap. The interest rate swaps are typically used to manage interest rate duration of certain fixed maturity securities or debt instruments issued.

~~Cash Flow Hedges~~

Interest rate swaps are predominantly used to manage portfolio duration and better match cash receipts from assets with cash disbursements required to fund liabilities. These derivatives primarily convert interest receipts on variable-rate fixed maturity securities to fixed rates. The Company has also entered into interest rate swaps to convert the variable interest payments on 3 month LIBOR + 2.125% junior subordinated debt to fixed interest payments. For further information, see the Junior Subordinated Debentures section within Note 14 - Debt of Notes to the Consolidated Financial Statements, included in The Hartford's 2020 Form 10-K Annual Report.

Foreign currency swaps are used to convert foreign currency denominated cash flows related to certain investment receipts to U.S. dollars in order to reduce cash flow fluctuations due to changes in currency rates.

The Company also previously entered into forward starting swap agreements to hedge the interest rate exposure related to the future purchase of fixed-rate securities, primarily to hedge interest rate risk inherent in the assumptions used to price certain group benefits liabilities.

~~Non-Qualifying Strategies~~

Derivative relationships that do not qualify for hedge accounting (“non-qualifying strategies”) primarily include hedges of interest rate, foreign currency and equity risk of certain fixed maturities and equities. In addition, hedging and replication strategies that utilize credit default swaps do not qualify for hedge accounting. The non-qualifying strategies include:

~~Credit Contracts~~

Credit default swaps are used to purchase credit protection on an individual entity or referenced index to economically hedge against default risk and credit-related changes in the value of fixed maturity securities. Credit default swaps are also used to assume credit risk related to an individual entity or referenced index as a part of replication transactions. These contracts require the Company to pay or receive a periodic fee in exchange for compensation from the counterparty or the Company should the referenced security issuers experience a credit event, as defined in the contract. The Company also enters into credit default swaps to terminate existing credit default swaps, thereby offsetting the changes in value of the original swap going forward.

~~Interest Rate Swaps, Swaptions and Futures~~

The Company uses interest rate swaps, swaptions and futures to manage interest rate duration between assets and liabilities. In addition, the Company enters into interest rate swaps to terminate existing swaps, thereby offsetting the changes in value of the original swap going forward. As of March 31, 2021 and December 31, 2020, the notional amount of interest rate swaps in offsetting relationships was $7.6 billion.

~~Foreign Currency Swaps and Forwards~~

~~The Company enters into foreign currency swaps to convert the foreign currency exposures of certain foreign currency-denominated fixed maturity investments to U.S. dollars.~~

~~Equity Index Options~~

The Company enters into equity index options to hedge the impact of a decline in the equity markets on the investment portfolio. The Company also enters into covered call options on equity securities to generate additional return.

~~Derivative Balance Sheet Classification~~

For reporting purposes, the Company has elected to offset within assets or liabilities, based upon the net of the fair value amounts, income accruals and related cash collateral receivables and payables of OTC derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset. The following fair value amounts do not include income accruals or related cash collateral receivables and payables, which are netted with derivative fair value amounts to determine balance sheet presentation. The Company’s derivative instruments are held for risk management purposes, unless otherwise noted in the following table. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and is presented in the table to quantify the volume of the Company’s derivative activity. Notional amounts are not necessarily reflective of credit risk.

NON-QUALIFYING STRATEGIES

Derivative relationships that do not qualify for hedge accounting (“non-qualifying strategies”) primarily include hedges of interest rate, foreign currency and equity risk of certain fixed maturities and equities. In addition, hedging and replication strategies that utilize credit default swaps do not qualify for hedge accounting. The non-qualifying strategies include:

Credit Contracts

Credit default swaps are used to purchase credit protection on an individual entity or referenced index to economically hedge against default risk and credit-related changes in the value of fixed maturity securities. Credit default swaps are also used to assume credit risk related to an individual entity or referenced index as a part of replication transactions. These contracts require the Company to pay or receive a periodic fee in exchange for compensation from the counterparty or the Company should the referenced security issuers experience a credit event, as defined in the contract. The Company also enters into credit default swaps to terminate existing credit default swaps, thereby offsetting the changes in value of the original swap going forward.

Interest Rate Swaps, Swaptions and Futures

The Company uses interest rate swaps, swaptions and futures to manage interest rate duration between assets and liabilities. In addition, the Company enters into interest rate swaps to terminate existing swaps, thereby offsetting the changes in value of the original swap going forward. As of September 30, 2021 and December 31, 2020, the notional amount of interest rate swaps in offsetting relationships was $7.2 billion and $7.6 billion, respectively.

Foreign Currency Swaps and Forwards

The Company enters into foreign currency swaps to convert the foreign currency exposures of certain foreign currency-denominated fixed maturity investments to U.S. dollars.

Equity Index Options

The Company enters into equity index options to hedge the impact of a decline in the equity markets on the investment portfolio. The Company also enters into covered call options on equity securities to generate additional return.

DERIVATIVE BALANCE SHEET CLASSIFICATION

For reporting purposes, the Company has elected to offset within assets or liabilities, based upon the net of the fair value amounts, income accruals and related cash collateral receivables and payables of OTC derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset. The following fair value amounts do not include income accruals or related cash collateral receivables and payables, which are netted with derivative fair value amounts to determine balance sheet presentation. The Company’s derivative instruments are held for risk management purposes, unless otherwise noted in the following table. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and is presented in the table to quantify the volume of the Company’s derivative activity. Notional amounts are not necessarily reflective of credit risk.

Offsetting of Derivative Assets/Liabilities

The following tables present the gross fair value amounts, the amounts offset, and net position of derivative instruments eligible for offset in the Company's Condensed Consolidated Balance Sheets. Amounts offset include fair value amounts, income accruals and related cash collateral receivables and

payables associated with derivative instruments that are traded under a common master netting agreement, as described in the preceding discussion. Also included in the tables are financial collateral receivables and payables, which are contractually permitted to be offset upon an event of default, although are disallowed for offsetting under U.S. GAAP.

CASH FLOW HEDGES

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a

component of OCI and reclassified into earnings in the

same period or periods during which the hedged transaction affects earnings. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

As of ~~March 31,~~September 30, 2021, the before tax deferred net gains on derivative instruments recorded in AOCI that are expected to be reclassified to earnings during the next twelve months are ~~$35.~~$31. This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities and long-term debt that will occur over the next twelve months. At that time, the Company will recognize the deferred net gains (losses) as an

adjustment to net investment income and interest expense over the term of the investment cash flows.

During the three and nine months ended ~~March 31,~~September 30, 2021 and 2020, the Company had 0no net reclassifications from AOCI

to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring.

NON-QUALIFYING STRATEGIES

For non-qualifying strategies, including embedded derivatives that are required to be bifurcated from their host contracts and accounted for as derivatives, the gain or loss on the derivative is recognized currently in earnings within net realized gains (losses).

Credit Risk Assumed through Credit Derivatives

The Company enters into credit default swaps that assume credit risk of a single entity or referenced index in order to synthetically replicate investment transactions that are permissible under the Company's investment policies. The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event. A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security

issuer’s debt obligation after the

occurrence of the credit event. A credit event is generally defined as a default on contractually obligated interest or principal payments or bankruptcy of the referenced entity. The credit default swaps in which the Company assumes credit risk primarily reference investment grade single corporate issuers and baskets, which include standard diversified portfolios of corporate and CMBS issuers. The diversified portfolios of corporate issuers are established within sector concentration limits and may be divided into tranches that possess different credit ratings.

~~Derivative Collateral Arrangements~~DERIVATIVE COLLATERAL ARRANGEMENTS

The Company enters into various collateral arrangements in connection with its derivative instruments, which require both the pledging and accepting of collateral. As of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company ~~has 0t pledged~~has pledged cash collateral associated with derivative ~~instruments.~~instruments of $2 and $0, respectively. In general, collateral receivable is recorded in other assets or other liabilities on the Company's Condensed Consolidated Balance Sheets as determined by the Company's election to offset on the balance sheet. As of ~~March 31,~~ September 30,

2021 and December 31, 2020, the Company pledged securities collateral associated with derivative instruments with a fair value of ~~$61~~$54 and $90, respectively, which have been included in fixed maturities on the Company's Condensed Consolidated Balance Sheets. The counterparties generally have the right to sell or re-pledge these securities.

In addition, as of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company has pledged initial margin of securities related to OTC-cleared and exchange traded derivatives with a fair value of ~~$60~~

$119 and $83, respectively, which are included within fixed maturities on the Company's Condensed Consolidated Balance Sheets.

As of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company accepted cash collateral associated with derivative instruments of ~~$22~~$12 and $24, respectively, which was invested and recorded in the Company's Condensed Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other investments or other liabilities as determined by the Company's election to offset on the balance sheet. The Company also accepted

securities collateral as of ~~March 31,~~September 30, 2021 and December 31, 2020, with a fair value of $3 and $1, ~~as of both dates,~~respectively, which the Company has the right to sell or repledge. As of ~~March 31,~~September 30, 2021 and December 31, 2020, the Company had 0no repledged securities and 0no securities held as collateral have been sold. Non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Condensed Consolidated Balance Sheets.


Premiums Receivable and Agents' Balances	Premiums Receivable and Agents' Balances					Premiums Receivable and Agents' Balances

		As of March 31, 2021		As of December 31, 2020			As of September 30, 2021		As of December 31, 2020

Premiums receivable, excluding receivables for losses within a deductible and retrospectively-rated policy premiums		$	4,058	$	3,851
Receivables for loss within a deductible and retrospectively-rated policy premiums, by credit quality:
Premiums receivable, excluding receivables for losses within a deductible and retrospectively-rated policy premiums ("loss sensitive business")						Premiums receivable, excluding receivables for losses within a deductible and retrospectively-rated policy premiums ("loss sensitive business")	$	4,200	$	3,851
Receivables for loss sensitive business, by credit quality:						Receivables for loss sensitive business, by credit quality:
AAA	AAA	0		0		AAA	—		—
AA	AA	140		142		AA	137		142
A	A	65		62		A	57		62
BBB	BBB	186		185		BBB	161		185
BB	BB	115		115		BB	103		115
Below BB	Below BB	67		65		Below BB	64		65
Total receivables for losses within a deductible and retrospectively-rated policy premiums		573		569
Total receivables for loss sensitive business						Total receivables for loss sensitive business	522		569

Total Premiums Receivable and Agents' Balances, Gross	Total Premiums Receivable and Agents' Balances, Gross	4,631		4,420		Total Premiums Receivable and Agents' Balances, Gross	4,722		4,420
ACL	ACL	(144)		(152)		ACL	(124)		(152)
Total Premiums Receivable and Agents' Balances, Net of ACL	Total Premiums Receivable and Agents' Balances, Net of ACL	$	4,487	$	4,268	Total Premiums Receivable and Agents' Balances, Net of ACL	$	4,598	$	4,268

ACL on Premiums Receivable and Agents' Balances

Balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods. The Company had an immaterial amount of receivables with a due date of more than one year that are past-due.

~~Premium~~Premiums receivable and agents' balances, excluding receivables for ~~losses within a deductible and retrospectively-rated policy premiums,~~loss sensitive business, are primarily comprised of premiums due from policyholders, which are typically collectible within one year or less. For these balances, the ACL is estimated based on an aging of receivables and recent historical credit loss and collection experience, adjusted for current economic conditions and reasonable and supportable forecasts, when appropriate.

A portion of the Company's Commercial Lines business is written with large deductibles or under retrospectively-rated ~~plans.~~

The Company cedes insurance risk to reinsurers to enable the Company to manage capital and risk exposure. Such arrangements do not relieve the Company of its primary liability to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company's procedures include carefully selecting its reinsurers, structuring agreements to provide collateral funds where necessary, and regularly monitoring the financial condition and ratings of its reinsurers.

~~Reinsurance Recoverables~~REINSURANCE RECOVERABLES

Reinsurance recoverables include balances due from reinsurance companies and are presented net of an allowance for uncollectible reinsurance. Reinsurance recoverables include an estimate of the amount of gross losses and loss adjustment

expense reserves that may be ceded under the terms of the reinsurance agreements, including incurred but not reported ("IBNR") unpaid losses. The Company’s estimate of losses and loss adjustment expense reserves ceded to reinsurers is based on assumptions that are consistent with those used in establishing the gross reserves for amounts the Company owes to its claimants. The Company estimates its ceded reinsurance recoverables based on the terms of any applicable facultative and treaty reinsurance, including an estimate of how incurred but not reported losses will ultimately be ceded under reinsurance agreements. Accordingly, the Company’s estimate of reinsurance recoverables is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and loss adjustment expenses.

Balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods, generally 30, 60 or 90 days. ~~There were 0 write-offs for the three months ended March 31, 2021.~~

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

Where its contracts permit, the Company secures future claim obligations with various forms of collateral or other credit enhancement, including irrevocable letters of credit, secured trusts, funds held accounts and group wide offsets. As part of its reinsurance recoverable review, the Company analyzes recent developments in commutation activity between reinsurers and cedants, recent trends in arbitration and litigation outcomes in disputes between cedants and reinsurers and the overall credit quality of the Company’s reinsurers.

Due to the inherent uncertainties as to collection and the length of time before reinsurance recoverables become due, it is possible that future adjustments to the Company’s reinsurance recoverables, net of the allowance, could be required, which could have a material adverse effect on the Company’s consolidated results of operations or cash flows in a particular quarter or annual period.

The allowance for uncollectible reinsurance comprises an ACL and an allowance for disputed balances. The ACL is estimated as the amount of reinsurance recoverables exposed to loss multiplied by estimated factors for the probability of default and the amount of loss given a default. The probability of default is assigned based on each reinsurer's credit rating, or a rating is estimated if no external rating is available. Credit ratings are reviewed on a quarterly basis and any significant changes are

reflected in an updated estimate. The probability of default factors are historical insurer and reinsurer defaults for liabilities with similar durations to the reinsured liabilities as estimated

through multiple economic cycles. Credit ratings are forward-looking and consider a variety of economic outcomes. The loss given default factors are based on a study of historical recovery rates for general creditors of corporations through multiple economic cycles or, in the case of purchased annuities funding structured settlements accounted for as reinsurance, historical recovery rates for annuity contract holders.

As shown in the table above, a portion of the total gross reinsurance recoverable balance relates to the Company’s participation in various mandatory (assigned) and voluntary risk pools. Reinsurance recoverables due from pools are backed by the financial position of all insurance companies participating in the pools and the credit backing the reinsurance recoverable is not limited to the financial strength of each pool. The mandatory pools generally are funded through policy assessments or surcharges and if any participant in the pool defaults, remaining liabilities are apportioned among the other members.

The Company's evaluation of the required ACL for reinsurance recoverables considers the current economic environment as well as macroeconomic scenarios similar to the approach used to estimate the ACL for mortgage loans. See Note 5 - Investments. Insurance companies, including reinsurers, are regulated and hold risk-based capital ("RBC") to mitigate the risk of loss due to economic factors and other risks. Non-U.S. reinsurers are either subject to a capital regime substantively equivalent to domestic insurers or we hold collateral to support collection of reinsurance recoverables. As a result, there is limited history of losses from insurer defaults. The decrease in the ACL for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 was primarily due to higher than expected recovery from one reinsurer on which the Company had recognized an ACL. In the three and nine months ended September 30, 2021, there were 0 write-offs of reinsurance recoverables that would impact ACL.

Unfavorable (Favorable) Prior Accident Year Development


		For the three months ended March 31,						For the nine months ended September 30,
			2021		2020				2021		2020
Workers’ compensation	Workers’ compensation		$	(40)	$	(17)	Workers’ compensation		$	(113)	$	(72)

Workers’ compensation discount accretion	Workers’ compensation discount accretion		9		9		Workers’ compensation discount accretion		26		27
General liability	General liability		307		12		General liability		451		112
Marine	Marine		6		0		Marine		—		1
Package business	Package business		(27)		1		Package business		(66)		(24)
Commercial property	Commercial property		(13)		(7)		Commercial property		(24)		(6)
Professional liability	Professional liability		(1)		1		Professional liability		(7)		(16)
Bond	Bond		0		0		Bond		(26)		(10)
Assumed reinsurance	Assumed reinsurance		2		0		Assumed reinsurance		—		(7)
Automobile liability - Commercial Lines	Automobile liability - Commercial Lines		0		5		Automobile liability - Commercial Lines		9		27
Automobile liability - Personal Lines	Automobile liability - Personal Lines		(23)		(6)		Automobile liability - Personal Lines		(73)		(53)
Homeowners	Homeowners		(3)		(2)		Homeowners		2		3

Catastrophes	Catastrophes		(16)		(13)		Catastrophes		(98)		(413)
Uncollectible reinsurance	Uncollectible reinsurance		(9)		0		Uncollectible reinsurance		(10)		(8)
Other reserve re-estimates, net	Other reserve re-estimates, net		31		11		Other reserve re-estimates, net		26		22
Prior accident year development before change in deferred gain	Prior accident year development before change in deferred gain		223		(6)		Prior accident year development before change in deferred gain		97		(417)
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	Change in deferred gain on retroactive reinsurance included in other liabilities [1]		6		29		Change in deferred gain on retroactive reinsurance included in other liabilities [1]		73		97
Total prior accident year development	Total prior accident year development		$	229	$	23	Total prior accident year development		$	170	$	(320)

[1]The change in deferred gain for the ~~three~~nine months ended ~~March 31,~~September 30, 2021 and 2020 included $6$73 and ~~$29,~~$97, respectively, of adverse development on Navigators 2018 and prior accident year reserves, primarily driven by ~~marine for both periods~~professional liability and ~~due to commercial automobile~~wholesale construction within general liability in the 2021 period and marine, professional liability, general liability, assumed reinsurance and prior accident year catastrophes in the 2020 period.

Re-estimates of prior accident year reserves for the ~~three~~nine months ended ~~March 31,~~September 30, 2021

Workers’ compensation reserves were decreased ~~primarily~~ within small commercial and ~~national accounts~~middle & large commercial for the ~~2014~~2013 through ~~2017~~2018 accident years driven by lower than previously estimated claim severity.

General liability reserves were increased including an increase for sexual molestation and sexual abuse claims above the amount of reserves previously recorded for this exposure, primarily to reflect an ~~agreement to settle~~increase in reserves for claims made against the Boy Scouts of America ("BSA") as discussed further below, partially offset by reserve decreases for other mass torts and extra contractual liability claims. In addition, the Company recognized reserve increases on Navigators’ wholesale construction business for 2018 and prior accident years included in the change in deferred gain on retroactive reinsurance in the above table.

Package business reserves decreased largely due to lower estimated loss adjustment expenses for accident years

in reserves on primary layer construction account business within global specialty, mainly related to accident years 2015-2017, which is included as a component of the change in deferred gain under retroactive reinsurance in the above table.

In addition, the Company recorded an increase in reserves for sexual molestation and abuse claims related to cases brought against religious and other institutions that were insureds of the Company which was partly offset by reserve decreases for other mass torts and extra contractual liability claims.

The Company increased reserves for sexual molestation claims by $129 considering the impact of recent bankruptcy filings and an expected increase in claim incidence largely driven by legislation passed in a number of states that provides an opportunity for claimants to file claims for a period of time despite the fact that the original statute of limitations had expired.

Marine reserves were increased principally due to an increase in domestic marine liability, mostly in accident years 2017 and 2018 due to a higher number of large losses. The increase in marine reserves is included as a component of the change in deferred gain under retroactive reinsurance in the above table.

Package business reservesdecreased for accident years 2014 to 2017 largely due to lower estimates of allocated loss adjustment expenses.

Commercial property reserves were decreased for

accident year 2019 due to favorable developments on marine and middle market property claims.

Professional liability reserveswere decreased primarily due to lower estimated severity on non-security class action D&O claims and fewer than expected E&O claims with financial institutions for the 2011 to 2018 accident years, partially offset by an increase in D&O reserves for the 2019 accident year driven by higher frequency of class action lawsuits and an increase in large Syndicate D&O losses for the 2016 and 2017 accident years. These Syndicate reserve increases within Global Specialty are included as a component of the change in deferred gain under retroactive reinsurance in the above table.

Assumed reinsurance reserveswere increased for accident year 2018 mostly due to higher accident and health reserve estimates for medical professionals on assumed casualty business. These reserve increases are included as a component of the change in deferred gain under retroactive reinsurance in the above table.

Automobile liability reserves were decreased in

Personal Lines principally due to lower than previously expected AARP Direct automobile liability claim severity for the 2017 and 2018 accident ~~year.~~years. Automobile liability reserves were increased in Commercial Lines primarily due to higher than expected large losses on national accounts in the first quarter of 2020 related to accident years 2015 to ~~2017.~~2017 and due to large losses within middle & large commercial, primarily within the 2018 and 2019 accident years.

Catastrophes reserves were reduced, primarily due to a reduction in estimated ~~catastrophes~~reserves for ~~the 2019 accident year~~2017 and 2018 California wildfires and a reduction in estimated ~~reserves~~catastrophes for ~~2017 California wildfires,~~wind and hail events in the 2018 and 2019 accident years, partially offset

by an increase in reserves for 2019 typhoons Hagibis and Faxai in Asia.

~~Other reserve re-estimates, net,~~ ~~primarily included~~

~~an increase~~ The reduction in reserves ~~on pool participations.~~for the 2017 and 2018 wildfires was largely due to recognizing a $289 subrogation benefit in the second quarter of 2020 from PG&E Corporation and Pacific Gas and Electric Company (together, “PG&E”).

for claims handling and other administrative services, subject to certain conditions. The A&E ADC covers substantially all the Company’s A&E reserve development up to the reinsurance limit.

Under retroactive reinsurance accounting, net adverse A&E reserve development after December 31, 2016 will result in an offsetting reinsurance recoverable up to the $1.5 billion limit. Cumulative ceded losses up to the $650 reinsurance premium paid have been recognized as a dollar-for-dollar offset to direct losses incurred. Cumulative ceded losses exceeding the $650 reinsurance premium paid result in a deferred gain. As of ~~March 31,~~September 30, 2021, the Company has incurred $860 in cumulative adverse development on asbestos and environmental reserves that have been ceded under the A&E ADC treaty with NICO with $640 of available limit remaining under the A&E ADC. As a result, the Company has recorded a $210 deferred gain within other liabilities, representing the difference between the reinsurance recoverable of $860 and ceded premium paid of $650. The deferred gain is recognized over the claim settlement period in the proportion of the amount of cumulative ceded losses collected from the reinsurer to the estimated ultimate reinsurance recoveries. Consequently, until periods when the deferred gain is recognized as a benefit to earnings, cumulative adverse development of asbestos and environmental claims will result in charges against earnings which may be significant.

Immediately after closing on the acquisition of Navigators Group, effective May 23, 2019, the Company purchased the Navigators ADC, an aggregate excess of loss reinsurance agreement covering adverse reserve development, from NICO, on behalf of Navigators Insurers. Under the Navigators ADC, the Navigators Insurers paid NICO a reinsurance premium of $91 in exchange for reinsurance coverage of $300 of adverse net loss reserve development that attaches $100 above the Navigators Insurers' existing net loss and allocated loss adjustment reserves as of December 31, 2018 subject to the treaty of $1.816 billion for accidents and losses prior to December 31, 2018.

As of ~~March 31,~~September 30, 2021, the Company has recorded a reinsurance recoverable under the Navigators ADC of ~~$215,~~$282, as estimated cumulative loss development on the 2018 and prior accident year reserves of ~~$315~~$382 exceed the $100 deductible. While the reinsurance recoverable is ~~$215,~~$282, the Company has also recorded a ~~$124~~$191 cumulative deferred gain within other liabilities since, under retroactive reinsurance accounting, ceded losses in excess of the $91 of ceded premium paid must be recognized as a deferred gain. Of the ~~$124~~$191 of cumulative ceded losses in ~~excess~~excess of ceded premium paid, $6$73 was recognized as a deferred gain in ~~first quarter~~ 2021 and ~~$29~~$97 was recognized as a deferred gain in ~~first quarter~~ 2020. As the Company has ceded ~~$215~~$282 of the $300 available limit, there is ~~$85~~$18 of remaining limit available as of ~~March 31,~~September 30, 2021.

Re-estimates of prior incurral years reserves for the ~~three~~nine months ended ~~March 31,~~September 30, 2021

Group ~~disability-~~ disability- Prior period reserve estimates decreased by approximately ~~$125~~$320 largely driven by group long-term disability claim incidence lower than prior assumptions together with strong recoveries on prior incurral year ~~claims;~~claims, and ~~by group short-term disability non-COVID-19 claim incidence lower than previously expected.~~

~~Group life and accident (including group life premium waiver)-~~ Prior period reserve estimates decreased by approximately $20 largely driven by lower-than-previously expected claim incidence in both group life premium waiver and group accidental death & dismemberment, partially offset by higher than previously estimated 2020 incurral year excess mortality claims on group term life.

~~Re-estimates of prior incurral years reserves for the three months ended March 31, 2020~~

~~Group disability-~~ Prior period reserve estimates decreased by approximately $100 largely driven by group long-term disability claim incidence lower than prior assumptions and strong recoveries on prior incurral year claims.a New York Paid Family Leave refund.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $50 largely driven by lower-than-previously expected claim incidence in both Group Life Premium Waiver and Group Accidental Death & Dismemberment.

Supplemental Accident & Health- Prior period reserve estimates decreased by approximately $10 driven by lower-than-previously expected claim incidence during the pandemic.

Re-estimates of prior incurral years reserves for the nine months ended September 30, 2020

Group disability- Prior period reserve estimates decreased by approximately $293 largely driven by group long-term

disability lower claim incidence and higher recoveries on prior incurral year ~~mortality than prior assumptions in~~claims, and a refund on the New York Paid Family Leave program.

Group life and accident (including group life ~~and lower than previously~~premium waiver)- Prior period reserve estimates decreased by approximately $50 largely driven by lower-than-previously expected claim incidence in group life premium waiver.

~~11.~~

Senior Notes

On September 21, 2021, The Hartford issued $600 of 2.9% senior notes (“2.9% Notes”) due September 15, 2051 for net proceeds of approximately $588, after deducting underwriting discounts and expenses from the offering. Interest is payable semi-annually in arrears on March 15 and September 15, commencing March 15, 2022. The Hartford, at its option, can redeem the 2.9% Notes at any time, in whole or part, at a redemption price equal to the greater of 100% of the principal amount being redeemed or a make-whole amount based on a comparable maturity US Treasury plus 20 basis points, plus any accrued and unpaid interest, except the 2.9% Notes may be redeemed at par within six months of maturity.

Revolving Credit Facility

In 2018, The Hartford entered into a $750 senior unsecured five-year revolving credit facility (the "Credit Facility"). As of September 30, 2021, no borrowings were outstanding, no letters of credit were issued under the Credit Facility and The Hartford was in compliance with all financial covenants.

On October 27, 2021, The Hartford amended and restated the Credit Facility (as amended, the “2021 Credit Facility”) which, among other changes, extends the term of the facility through October 27, 2026, includes provisions for determining LIBOR successor rates, and resets the level of The Hartford’s minimum consolidated net worth financial covenant to $11.25 billion, excluding AOCI. The 2021 Credit Facility provides up to $750 of

unsecured credit, including $100 available to support letters of credit. Under the 2021 Credit Facility:

•Revolving loans may be in multiple currencies.

•U.S. dollar loans will bear interest at a floating rate equivalent to an indexed rate that varies depending on the type of borrowing plus a basis point spread based on The Hartford's credit rating and will mature no later than October 27, 2026.

•Letters of credit bear a fee based on The Hartford's credit rating and expire no later than October 27, 2027.

The 2021 Credit Facility limits the ratio of senior debt to capitalization, excluding AOCI, at 35% and includes other customary covenants. The 2021 Credit Facility is for general corporate purposes.

For further information regarding the Credit Facility, see Note 14 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2020 Form 10-K Annual Report.

12. INCOME TAXES

~~Income Tax Expense~~INCOME TAX EXPENSE

																	Income Tax Rate Reconciliation
		Three Months Ended March 31,				Three Months Ended September 30,						Nine Months Ended September 30,
		2021		2020				2021		2020			2021		2020
Tax provision at U.S. federal statutory rate	Tax provision at U.S. federal statutory rate	$	63	$	72		Tax provision at U.S. federal statutory rate	$	122	$	111		$	419	$	308
Tax-exempt interest	Tax-exempt interest	(11)		(12)			Tax-exempt interest	(10)		(12)			(31)		(36)

Executive compensation		5		5

Increase in deferred tax valuation allowance	Increase in deferred tax valuation allowance	1		6			Increase in deferred tax valuation allowance	(1)		6			6		19

Sale of business							Sale of business	—		(8)			(5)		(8)
Earnings on corporate owned life insurance							Earnings on corporate owned life insurance	(5)		(6)			(16)		(3)
Carryback benefit							Carryback benefit	—		(5)			—		(5)
Tax credits							Tax credits	(8)		(4)			(9)		(4)
Tax law change							Tax law change	1		(6)			(6)		(6)
Other	Other	(4)		0			Other	2		(3)			2		3
Provision for income taxes	Provision for income taxes	$	54	$	71		Provision for income taxes	$	101	$	73		$	360	$	268

~~Other Tax Matters~~

~~Unrecognized tax benefits were $15 and $14 at the beginning and end of the periods ended March 31, 2021 and 2020, respectively.~~

As of September 30, 2021, the Company has foreign net operating losses of ~~$11~~$23 for which a valuation allowance of $3$4 has been established. While the foreign ~~NOLs~~net operating losses ("NOLs") do not expire, this assessment reflects uncertainty in the Company's ability to generate sufficient taxable income in the near term in those specific jurisdictions.

Management has assessed the need for a valuation allowance against its deferred tax assets based on tax character and jurisdiction. In making the assessment, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryovers, taxable income in open carry back years and other

tax planning strategies which management views as prudent and feasible.

The federal income tax audits for the Company have been completed through 2013, and the Company is not currently under federal income tax examination for any open years. The statute of limitations is closed through the ~~2016~~2017 tax year with the exception of NOL carryforwards utilized in open tax years. Management believes that adequate provision has been made in the Company's Condensed Consolidated Financial Statements for any potential adjustments that may result from tax examinations and other tax-related matters for all open tax years.

Management evaluates each contingent matter separately. A loss is recorded if probable and reasonably estimable. Management establishes liabilities for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more probable than any other, the Company records an estimated liability at the low end of the range of losses.

~~Litigation~~LITIGATION

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it. The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense

immediate vicinity of the insured premises and did not prohibit access to the insured premises, as required by the terms of the insurance policies. In addition, the vast majority of the policies at issue expressly exclude from coverage any loss caused directly or indirectly by the presence, growth, proliferation, spread or activity of a virus, subject to a narrow set of exceptions not applicable in connection with this pandemic, and contain a pollution and contamination exclusion that, among other things, expressly excludes from coverage any loss caused by material that threatens human health or welfare.

In addition to the inherent difficulty in predicting litigation outcomes, the COVID-19 pandemic business income coverage lawsuits present numerous uncertainties and contingencies that are not yet known, including how many policyholders will ultimately file claims, the number of lawsuits that will be filed, the extent to which any state or nationwide classes will be certified, and the size and scope of any such classes. The legal theories advocated by plaintiffs vary significantly by case as do the state laws that govern the policy interpretation. These lawsuits are at various stages of litigation; some are in the earliest stages of litigation, many complaints are in the process of being amended, some have been dismissed voluntarily and may be refiled, while others have been dismissed through rulings in favor of the Hartford Writing Companies. Discovery is underway in certain single plaintiff cases and class actions. More than ~~a dozen~~40 policyholders have appealed dismissals in favor of the Hartford Writing Companies. While these appeals are at various stages of the ~~briefing~~ process, ~~none~~no decisions have been ~~fully briefed~~issued at this time. In addition, business income calculations depend upon a wide range of factors that are particular to the circumstances of each individual policyholder and, here, ~~virtually~~almost none of the plaintiffs have submitted proofs of loss or otherwise quantified or factually supported any allegedly covered loss, and, in any event, the Company’s experience shows that demands for damages often bear little relation to a reasonable estimate of potential loss. Accordingly, management cannot now reasonably estimate the possible loss or range of loss, if any. Nonetheless, given the large number of claims and potential claims, the indeterminate amounts sought, and the inherent unpredictability of litigation, it is possible that adverse outcomes, if any, in the aggregate, could have a material adverse effect on the Company’s consolidated operating results.

Run-off Asbestos and Environmental Claims

The Company continues to receive A&E claims. Asbestos claims relate primarily to bodily injuries asserted by people who came in contact with asbestos or products containing asbestos. Environmental claims relate primarily to pollution and related clean-up costs.

or characteristics suggested by the aggregate paid and reported activity.

While the Company believes that its current A&E reserves are appropriate, significant uncertainties limit the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses. The ultimate liabilities, thus, could exceed the currently recorded reserves, and any such additional liability, while not estimable now, could be material to The Hartford’s consolidated operating results and liquidity.

For its Run-off A&E, as of ~~March 31,~~September 30, 2021, the Company reported ~~$676~~$621 of net asbestos reserves and ~~$79~~$25 of net environmental reserves. ~~In addition, the Company has recorded a $210 deferred gain within other liabilities for losses economically ceded to NICO but for which the benefit is not recognized in earnings until later periods.~~ While the Company believes that its current Run-off A&E reserves are appropriate, significant uncertainties limit our ability to estimate the ultimate reserves necessary for unpaid losses and related expenses. The ultimate liabilities, thus, could exceed the currently recorded reserves, and any such additional liability, while not reasonably estimable now, could be material to The Hartford's consolidated operating results and liquidity.

The Company’s A&E ADC reinsurance agreement with NICO reinsures substantially all A&E reserve development for 2016 and prior accident years, including Run-off A&E and A&E reserves included in Commercial Lines and Personal Lines. The A&E ADC has a coverage limit of $1.5 billion above the Company’s existing net A&E reserves as of December 31, 2016 of approximately $1.7 billion. As of ~~March 31,~~September 30, 2021, the Company has incurred $860 in cumulative adverse development on A&E reserves that have been ceded under the A&E ADC treaty with NICO, leaving $640 of coverage available for future adverse net reserve development, if any. The Company has recorded a $210 deferred gain within other liabilities for losses economically ceded to NICO but for which the benefit is not recognized in earnings until later periods. Cumulative adverse development of A&E claims for accident years 2016 and prior could ultimately exceed the $1.5 billion treaty limit in which case any adverse development in excess of the treaty limit would be absorbed as a charge to earnings by the Company. In these scenarios, the effect of these charges could be material to the Company’s consolidated operating results and liquidity. For more information on the A&E ADC, refer to Note 12, Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements included in the Company's 2020 Form 10-K Annual Report.

~~Derivative Commitments~~DERIVATIVE COMMITMENTS

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings, as set by nationally recognized statistical agencies, of the individual legal entity that entered into the derivative agreement. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could, ~~demand immediate and ongoing full collateralization and,~~ in certain

The Company’s employee benefit plans are described in Note 19 - Employee Benefit Plans of Notes to Consolidated Financial Statements included in The Hartford’s 2020 Annual Report on Form 10-K. Net periodic cost (benefit) is recognized in insurance

operating costs and other expenses in the condensed consolidated statement of operations.

Based on the funded status of the U.S. qualified defined benefit

Net Periodic Cost (Benefit)
Pension Benefits Other Postretirement Benefits
Three Months Ended March 31, Three Months Ended March 31,
2021 2020 2021 2020
Service cost $ 1 $ 1 $ 0 $ 0
Interest cost 24 32 1 2
Expected return on plan assets (51) (54) (1) (1)
Amortization of prior service credit 0 0 (2) (2)
Amortization of actuarial loss 17 15 2 2
Net periodic cost (benefit) $ (9) $ (6) $ 0 $ 1

~~16.~~

pension plan, the Company does not anticipate making a contribution to the plan in 2021.

Sale of Continental Europe Operations

On September 30, 2020, the Company entered into a definitive agreement to sell its Continental Europe Operations consisting of multiple arrangements designed as a single transaction. The Continental Europe Operations are included in the Commercial Lines reporting segment. Revenues and earnings are not material to the Company's consolidated results of operations for the three and nine months ended ~~March 31,~~September 30, 2021 and 2020. The pending sale

resulted in an estimated loss on the

sale of approximately ~~$47,~~ $68, before tax, including $20, before tax, in the nine months ended September 30, 2021, which was recorded within net realized ~~capital~~ gains (losses). The accrual for the estimated before tax loss is included as a reduction of the carrying value of assets held for sale in the Company's Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2021. The transaction is expected to close in the ~~second or third~~fourth quarter of 2021, subject to customary closing conditions, including regulatory approvals.

In recognition of the need to become more cost efficient and competitive along with enhancing the experience we provide to agents and customers, on July 30, 2020 the Company announced an operational transformation and cost reduction plan it refers to as Hartford Next. Hartford Next is intended to reduce annual insurance operating costs and other expenses through reduction of the Company's headcount, investment in information technology ("IT") to further enhance our capabilities, and other activities. The activities are expected to be substantially complete by the end of 2022.

Termination benefits related to workforce reductions and professional fees are included within restructuring and other

costs in the Condensed Consolidated Statement of Operations and unpaid restructuring costs are included in other liabilities in

the ~~March 31,~~September 30, 2021 Condensed Consolidated Balance Sheet. In the nine months ended September 30, 2021, the severance benefits accrual was reduced $24 due to more recent experience of higher than expected voluntary attrition. Subsequent to ~~March 31,~~September 30, 2021, the Company expects to incur additional costs including amortization of right of use assets and other lease exit costs, other IT costs to retire applications, professional fees and other expenses. Total restructuring and other costs are expected to be approximately ~~$164,~~$133, before tax, and are being recognized in Corporate for segment reporting. The estimated restructuring and other costs for future periods do not include all costs associated with the real estate consolidation plan as those plans are still being finalized.

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

The Hartford provides projections and other forward-looking information in the following discussions, which contain many forward-looking statements, particularly relating to the Company’s future financial performance. These forward-looking statements are estimates based on information currently available to the Company, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to the cautionary statements set forth on pages 4 and 5 of this Form 10-Q. Actual results are likely to differ, and in the past have differed, materially from those forecast by the Company, depending on the outcome of various factors, including, but not limited to, those set forth in the following discussion; Part I, Item 1A, Risk Factors in The Hartford’s 2020 Form 10-K Annual Report; and our other filings with the Securities and Exchange Commission. The Hartford undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

On September 30, 2020, the Company entered into a definitive agreement to sell all of the issued and outstanding equity of Navigators Holdings (Europe) N.V., a Belgium holding company, and its subsidiaries, Bracht, Deckers & Mackelbert N.V. (“BDM”) and Assurances Contintales Contintale Verzekeringen N.V. (“ASCO”), (collectively referred to as "Continental Europe Operations"). For discussion of this transaction, see Note 1617 - Business Disposition of Notes to Condensed Consolidated Financial Statements.

Certain reclassifications have been made to historical financial information presented in Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") to conform to the current period presentation.

The Hartford defines increases or decreases greater than or equal to 200% as “NM” or not meaningful.

INDEX

Throughout the MD&A, we use certain terms and abbreviations, the more commonly used are summarized in the Acronyms section.

KEY PERFORMANCE MEASURES AND RATIOS

The Company considers the measures and ratios in the following discussion to be key performance indicators for its businesses. Management believes that these ratios and measures are useful in understanding the underlying trends in The Hartford’s businesses. However, these key performance indicators should only be used in conjunction with, and not in lieu of, the results presented in the segment discussions that follow in this MD&A. These ratios and measures may not be comparable to other performance measures used by the Company’s competitors.

~~Definitions of Non-GAAP and Other Measures and Ratios~~DEFINITIONS OF NON-GAAP AND OTHER MEASURES AND RATIOS

Assets Under Management ("AUM")- Include mutual fund and exchange-traded products ("ETP") assets. AUM is a measure used by the Company's Hartford Funds segment because a significant portion of the Company’s mutual fund and ETP revenues are based upon asset values. These revenues increase or decrease with a rise or fall in AUM whether caused by changes in the market or through net flows.

Book Value per Diluted Share excluding accumulated other comprehensive income ("AOCI")- This is a non-GAAP per share measure that is calculated by dividing (a) common stockholders' equity, excluding AOCI, after tax, by (b) common shares outstanding and dilutive potential common shares. The Company provides this measure to enable investors to analyze the amount of the Company's net worth that is primarily attributable to the Company's business operations. The Company believes that excluding AOCI from the numerator is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates. Book value per diluted share is the most directly comparable U.S. GAAP measure.

Combined Ratio- The sum of the loss and loss adjustment expense ratio, the expense ratio and the policyholder dividend ratio. This ratio is a relative measurement that describes the related cost of losses and expenses for every $100 of earned premiums. A combined ratio below 100 demonstrates underwriting profit; a combined ratio above 100 demonstrates underwriting losses.

Core Earnings- The Hartford uses the non-GAAP measure core earnings as an important measure of the Company’s operating performance. The Hartford believes that core earnings provides investors with a valuable measure of the performance of the Company’s ongoing businesses because it reveals trends in our insurance and financial services businesses that may be obscured by including the net effect of certain items. Therefore, the following items are excluded from core earnings:

•Certain realized ~~capital~~ gains and losses - 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 that tend to be highly variable from period to period based on capital market conditions. The Hartford 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.

•Restructuring and other costs - Costs incurred as part of a restructuring plan are not a recurring operating expense of the business.

•Loss on extinguishment of debt - Largely consisting of make-whole payments or tender premiums upon paying debt off before maturity, these losses are not a recurring operating expense of the business.

•Gains and losses on reinsurance transactions - Gains or losses on reinsurance, such as those entered into upon sale of a business or to reinsure loss reserves, are not a recurring operating expense of the business.

•Integration and other non-recurring M&A costs - These costs, including transaction costs incurred in connection with an acquired business, ~~- As transaction costs~~ are incurred ~~upon acquisition of a business and integration costs are completed within~~over a short period ~~after an acquisition, they~~of time and do not represent an ongoing ~~costs~~operating expense of the business.

•Change in loss reserves upon acquisition of a business - These changes in loss reserves are excluded from core earnings because such changes could obscure the ability to compare results in periods after the acquisition to results of periods prior to the acquisition.

•Deferred gain resulting from retroactive reinsurance and subsequent changes in the deferred gain - Retroactive reinsurance agreements economically transfer risk to the reinsurers and including the full benefit from retroactive reinsurance in core earnings provides greater insight into the economics of the business.

•Change in valuation allowance on deferred taxes related to non-core components of pre-tax income - These changes in valuation allowances are excluded from core earnings because they relate to non-core components of pre-tax income, such as tax attributes like capital loss carryforwards.

•Results of discontinued operations - These results are excluded from core earnings for businesses sold or held for sale because such results could obscure the ability to compare period over period results for our ongoing businesses.

In addition to the above components of net income available to common stockholders that are excluded from core earnings, preferred stock dividends declared, which are excluded from net income available to common stockholders, are included in the determination of core earnings. Preferred stock dividends are a cost of financing more akin to interest expense on debt and are expected to be a recurring expense as long as the preferred stock is outstanding.

Net income (loss) and net income (loss) available to common stockholders are the most directly comparable U.S. GAAP measures to core earnings. Core earnings should not be considered as a substitute for net income (loss) or net income (loss) available to common stockholders and does not reflect the overall profitability of the Company’s business. Therefore, The Hartford believes that it is useful for investors to evaluate net income (loss), net income (loss) available to common stockholders, and core earnings when reviewing the Company’s performance.

Core Earnings Margin- The Hartford uses the non-GAAP measure core earnings margin to evaluate, and believes it 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, calculated by dividing net income by revenues, 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) as well as other items excluded in the calculation of core earnings. 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. A reconciliation of net income margin to core earnings margin is set forth in the Results of Operations section within MD&A - Group Benefits.

Current Accident Year Catastrophe Ratio- A component of the loss and loss adjustment expense ratio, represents the ratio of catastrophe losses incurred in the current accident year (net of reinsurance) to earned premiums. For U.S. events, a catastrophe is an event that causes $25 or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers, as defined by the Property Claim ~~Service~~Services office of Verisk. For international events, the Company's approach is similar, informed, in part, by how Lloyd's of London defines catastrophes. Lloyd's of London is an insurance market-place operating worldwide ("Lloyd's"). Lloyd's does not underwrite risks. The Company accepts risks as the sole member of Lloyd's Syndicate 1221 ("Lloyd's Syndicate"). The current accident year catastrophe ratio includes the effect of catastrophe losses, but does not include the effect of reinstatement premiums.

Expense Ratio- For the underwriting segments of Commercial Lines and Personal Lines is the ratio of underwriting expenses less fee income, to earned premiums. Underwriting expenses include the amortization of deferred policy acquisition costs ("DAC") and insurance operating costs

and expenses, including certain centralized services costs and bad debt expense. DAC include commissions, taxes, licenses and fees and other

incremental direct underwriting expenses and are amortized over the policy term.

The expense ratio for Group Benefits is expressed as the ratio of insurance operating costs and other expenses including amortization of intangibles and amortization of DAC, to premiums and other considerations, excluding buyout premiums.

The expense ratio for Commercial Lines, Personal Lines and Group Benefits does not include integration and other transaction costs associated with an acquired business.

Fee Income- Is largely driven from amounts earned as a result of contractually defined percentages of assets under management in our Hartford Funds business. These fees are generally earned on a daily basis. Therefore, the growth in assets under management either through positive net flows or favorable market performance will have a favorable impact on fee income. Conversely, either negative net flows or unfavorable market performance will reduce fee income.

Gross New Business Premium- Represents the amount of premiums charged, before ceded reinsurance, for policies issued to customers who were not insured with the Company in the previous policy term. Gross new business premium plus gross renewal written premium less ceded reinsurance equals total written premium.

Loss and Loss Adjustment Expense Ratio- A measure of the cost of claims incurred in the calendar year divided by earned premium and includes losses and loss adjustment expenses incurred for both the current and prior accident years. Among other factors, the loss and loss adjustment expense ratio needed for the Company to achieve its targeted return on equity ("ROE") fluctuates from year to year based on changes in the expected investment yield over the claim settlement period, the timing of expected claim settlements and the targeted returns set by management based on the competitive environment.

The loss and loss adjustment expense ratio is affected by claim frequency and claim severity, particularly for shorter-tail property

lines of business, where the emergence of claim frequency and severity is credible and likely indicative of ultimate losses. Claim frequency represents the percentage change in the average number of reported claims per unit of exposure in the

a particular line of business when insurance carriers have incurred significant losses in that line of business in the recent past or the industry as a whole commits less of its capital to writing exposures in that line of business. Prices tend to decrease when recent loss experience has been favorable or when competition among insurance carriers increases. Renewal written price statistics are subject to change from period to period, based on a number of factors, including changes in actuarial estimates and the effect of subsequent cancellations and non-renewals, and modifications made to better reflect ultimate pricing achieved.

Return on Assets (“ROA”), Core Earnings-The Company uses this non-GAAP financial measure to evaluate, and

Written and Earned Premiums- Written premium represents the amount of premiums charged for policies issued, net of reinsurance, during a fiscal period. Premiums are considered earned and are included in the financial results on a pro rata basis over the policy period. Management believes that written premium is a performance measure that is useful to investors as it reflects current trends in the Company’s sale of property and casualty insurance products. Written and earned premium are recorded net of ceded reinsurance premium.

Traditional life and disability insurance type products, such as those sold by Group Benefits, collect premiums from policyholders in exchange for financial protection for the policyholder from a specified insurable loss, such as death or disability. These premiums together with net investment income earned are used to pay the contractual obligations under these insurance contracts. Two major factors, new sales and persistency, impact premium growth. Sales can increase or decrease in a given year based on a number of factors, including but not limited to, customer demand for the Company’s product offerings, pricing competition, distribution channels and the Company’s reputation and ratings. Persistency refers to the percentage of premium remaining in-force from year-to-year.

THE HARTFORD’S OPERATIONS

The Hartford conducts business principally in five reporting segments including Commercial Lines, Personal Lines, Property & Casualty Other Operations, Group Benefits and Hartford Funds, as well as a Corporate category. The Company includes in the Corporate category reserves for run-off structured settlement and terminal funding agreement liabilities, restructuring costs, capital raising activities (including equity financing, debt financing and related interest expense), transaction expenses incurred in connection with an acquisition, certain M&A costs, purchase accounting adjustments related to goodwill and other expenses not allocated to the reporting segments. Corporate also includes investment management fees and expenses related to managing third party business, including management of the invested assets of Talcott Resolution Life, Inc. and its ~~subsidiaries ("Talcott Resolution"). Talcott Resolution is the holding company of the life and annuity business that was sold in May 2018.~~subsidiaries. In addition, up until June 30, 2021, Corporate ~~includes~~included a 9.7% ownership interest in Hopmeadow Holdings LP, the legal entity that acquired ~~the life~~Talcott Resolution in May 2018 (Hopmeadow Holdings, LP, Talcott Resolution Life Inc., and ~~annuity business sold.~~its subsidiaries are collectively referred to as "Talcott Resolution"). The sale of Talcott Resolution ~~to a new group of investors is expected to close by~~

risk and interest rate sensitivity of invested assets, while generating sufficient net of tax income to meet policyholder and corporate obligations. Investment strategies are developed based on a variety of factors including business needs, regulatory requirements and tax considerations.

~~Impact of~~IMPACT OF COVID-19 ~~on our financial condition, results of operations and liquidity~~ON OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS AND LIQUIDITY

Impact to ~~revenues~~

~~Written~~written and ~~Earned~~earned premiums

~~While we are beginning~~Despite the rollout of vaccines and states largely lifting restrictions allowing business to ~~emerge from the pandemic with economic stimulus measures being passed in the U.S. and other jurisdictions and progress being made to vaccinate the public from the COVID-19 virus,~~re-open, the COVID-19 pandemic continues to ~~cause significant disruption~~pose a threat to the ~~economy~~economic recovery of the U.S. and other countries in which we operate. As one of the largest providers of small business insurance in the U.S., we were negatively affected by economic effects of the pandemic on small businesses beginning in March of 2020. ~~In 2021,~~An improvement in economic conditions ~~have improved and~~ in the ~~first quarter~~three and nine months ended September 30, 2021 has contributed to an increase of ~~2021, we experienced a 4% year over year increase~~14% and 10% respectively, in our small commercial written ~~premium.~~premiums. Our middle ~~and~~& large commercial business was also negatively affected by COVID-19 and written premium in that line has ~~been slower to rebound~~rebounded with ~~written premium in middle & large commercial down 3% year over year~~an increase of 18% and 11%,

respectively, in the ~~first quarter.~~three and nine month period. Overall,

Excess mortality in the group life business includes both claims where COVID-19 is specifically listed as the cause of death and indirect impacts of the pandemic such as causes of death due to patients deferring regular treatments of chronic conditions. The incidence of excess mortality claims is subject to significant uncertainty as it is dependent on a number of factors difficult to predict including, among others, the ultimate vaccination rate of the population, the effectiveness of the vaccines, how long the Delta variant surge will last, the potential spread of new COVID-19 variants, the percentage of those infected who are of working age and the strain on the health care system preventing timely treatment of chronic illnesses.

Within P&C, ~~property~~direct COVID-19 incurred losses in the nine months ended September 30, 2021 were predominantly on workers' compensation claims incurred in the three months ended March 31, 2021 or 2020. Nearly all of our property insurance policies require direct physical loss or damage to property and contain standard exclusions that we believe preclude coverage for COVID-19 related claims, and the vast majority of such policies contain exclusions for virus-related losses. Within Property & Casualty, wefirst quarter. We incur COVID-19 workers’ compensation losses when it is determined that workers were exposed to COVID-19 out of and in the course of their employment and in other cases where states have passed laws providing for the presumption of coverage for certain industry classes, including health care and other essential workers.

~~Within Group Benefits,~~

Apart from COVID-19 workers' compensation claims, net of favorable frequency, and incurred losses within financial lines, P&C COVID-19 incurred losses in the ~~Company experienced excess mortality~~nine months ended September 30, 2020 primarily included $141 for property claims. There were no COVID-19 P&C property losses incurred in ~~its group life business, including those~~the three or nine months ended September 30, 2021. Nearly all of our property insurance policies require direct physical loss or damage to property and contain standard exclusions that we believe preclude coverage for COVID-19 related claims, ~~where COVID-19 is specifically listed as~~and the ~~cause~~vast majority of ~~death.~~such policies contain exclusions for virus-related losses.

Other impacts from COVID-19

In Personal Lines automobile, miles driven and average claim severity have begun to increase again as we emerge from the pandemic which ~~we expect will increase~~has increased automobile loss costs in 2021. In addition, as the effects of favorable claim frequency from lower miles driven during the pandemic are factored into rates, we expect lower earned pricing increases resulting in a higher

expected automobile loss ratio in 2021 than in 2020. Refer to Personal Lines Results of Operations for discussion of pricing and loss cost trends for the three and nine months ended September 30, 2021.

As we emerge from the pandemic, inflationary pressures in ~~first quarter 2021.~~the economy have resulted in increased claim severity in 2021 in automobile and property lines of business in both Commercial Lines and Personal Lines. As expectations of inflationary pressures have increased, interest rates have risen in 2021 and higher interest rates reduce the fair value of our investments in fixed maturity securities, AFS.

Aided by some improvement in the economy and the effect of the government’s economic stimulus payments to our customers, in ~~first quarter~~the three and nine months ended September 30, 2021, we recorded ~~a $8 decrease~~decreases of $10 and $28, respectively, in the ACL on premiums receivable, reflecting a lower expectation of credit losses, though there remains an elevated risk of uncollectible premiums receivable relative to historical trends if economic conditions do not improve further.

As we emerge from the pandemic, we expect travel costs and certain employee benefits costs will increase relative to the lower level of those costs we incurred when shelter-in-place orders were ~~more broadly~~ in effect.

For information about resources the Company has to manage capital and liquidity, refer to the Capital Resources & Liquidity section of MD&A.

For additional information about the potential economic impacts to the Company of the COVID-19 pandemic, see the risk factor "The pandemic caused by the spread of COVID-19 has disrupted


Hartford Next Costs and Expense Savings
	Nine months ended September 30, 2021		Estimate for 2021		Estimate for 2022
Employee severance	$	(24)	$	(24)	$	—
IT costs to retire applications	6		9		12
Professional fees and other expenses	17		20		10

Estimated restructuring costs	(1)		5		22

Non-capitalized IT costs	38		41		24
Other costs	13		18		16
Amortization of capitalized IT development costs [1]	—		—		5
Amortization of capitalized real estate [2]	—		—		1
Estimated costs within core earnings	51		59		46
Total Hartford Next program costs	$	50	$	64	$	68

Cumulative savings for the period relative to 2019	$	(306)	$	(400)	$	(540)


Net expense (savings) before tax:	$	(256)	$	(336)	$	(472)

Net expense (savings) before tax:
Accounted for within core earnings	$	(255)	$	(341)	$	(494)
Restructuring costs recognized outside of core earnings	(1)		5		22
Net expense (savings) before tax	$	(256)	$	(336)	$	(472)

~~March 31,~~September 30, 2021 compared to December 31, 2020

Total investments increased primarily due to an increase in limited partnerships and other alternative investments as well as mortgage loans, largely offset by a decrease in fixed maturities, AFS.

Limited partnerships and other alternative investments increased primarily driven by increased valuations and additional investments in real estate joint ventures.

Mortgage loans increased largely due to funding of industrial, retail, and multifamily commercial whole loans.

Fixed maturities, AFS decreased primarily due to a decrease in valuations due to higher interest rates, partially offset by tighter credit spreads.

Three months ended ~~March 31,~~September 30, 2021 compared to the three months ended ~~March 31,~~September 30, 2020

Total net investment income increased primarily due to:

•Greater income from limited partnerships and other alternative investments primarily driven by higher valuations and cash distributions within private equity funds and sales of underlying investments within ~~private equity funds~~

•~~A higher return on equity fund investments within Other resulting from the increase in equity market levels~~real estate funds;

•A higher level of invested ~~assets~~assets; and

•~~Partially~~Higher dividend income from equity investments.

These increases were partially offset by a lower yield on fixed maturities resulting from reinvesting at lower rates.

Nine months ended September 30, 2021 compared to the nine months ended September 30, 2020

Total net investment income increased primarily due to:

•Greater income from limited partnerships and other alternative investments primarily driven by higher valuations and cash distributions within private equity funds and sales of underlying investments within real estate funds;

•A higher level of invested assets;

•Greater income from non-routine items, including make-whole payments and yield adjustments on prepayable securities; and

•Higher income from equity investments.

These increases were partially offset by a lower yield on fixed maturities resulting from reinvesting at lower rates and a lower yield on floating rate investments.

Annualized net investment income yield, excluding limited partnerships and other alternative investments and non-routine items on fixed maturities, which ~~primarily~~ include income items such as make-whole payments and ~~prepayment fees,~~yield adjustments on prepayable securities, was down primarily due to lower reinvestment ~~rates, partially offset by higher equity fund investment returns.~~rates.

Average reinvestment ~~rate,~~rates, on fixed maturities and mortgage loans, excluding certain U.S. Treasury securities, for the ~~first quarter of~~three and nine months ended September 30, 2021, ~~was 2.3%~~were 2.6% and 2.5%, respectively, which ~~was~~were below the average yield of sales and maturities of ~~2.9%~~3.1% and 3.0%, respectively. Average reinvestment rates for the ~~same period. The average reinvestment rate for the~~three and nine months ended September 30, 2020, ~~three month period was 2.9%~~were 2.1% and 2.5%, respectively, which ~~was~~were below the average yield of sales and maturities of ~~3.3%.~~3.5% for the same periods.

For the 2021 calendar year, we expect the annualized net investment income yield, excluding limited partnerships and other alternative investments and non-routine items on fixed maturities, to be lower than the portfolio yield earned in 2020, due to lower reinvestment rates and a lower yield on short-term ~~investments and lower reinvestment rates.~~investments. The estimated impact on net investment income yield is subject to change due to evolving market conditions and active portfolio management.

Three and nine months ended ~~March 31,~~September 30, 2021

Gross gains and losses on sales were primarily ~~driven by issuer-specific sales of~~due to an overall reduction to corporate securities ~~a reduction of exposure~~and tax-exempt municipals, in ~~the foreign government sector, and~~addition to sales of U.S. ~~treasury securities~~treasuries for duration and risk management.

Equity securities net gains for the nine months ended September 30, 2021 were primarily driven by appreciation in value due to higher equity market levels.

Other, net~~gains~~ gains and losses for the nine month period ended September 30, 2021, included a gain of $46 on the sale of the Company's 9.7% retained interest in Talcott Resolution, and a loss of $20 related to the pending sale of the Company's Continental Europe Operations, which the Company agreed to sell in September of 2020. Also included for the three and nine month periods ended September 30, 2021 were ~~primarily due to $32~~gains of ~~gains~~$9 on interest rate ~~derivative trades,~~derivatives driven by an increase in interest rates.

Three and nine months ended ~~March 31,~~September 30, 2020

Gross gains and losses on sales were primarily driven by ~~issuer-specific selling of corporate securities and RMBS as well as~~ sales of U.S. treasury securities for duration ~~management.~~and/or liquidity management and issuer-specific sales of corporate securities and tax-exempt municipal bonds.

Equity securities net gains for the three month period ended September 30, 2020 were primarily driven by mark-to-market gains due to an increase in equity market levels. For the nine month period ended September 30, 2020, net losses were ~~primarily~~ driven by mark-to-market losses due to athe decline in equity market levels in the first quarter and losses incurred on sales across multiple issuers as the Company reduced its exposure to equity ~~securities during the quarter.~~securities.

Other, net gains for the three month period were primarily due to a loss of $51, before tax, on the sale of the Company's

Continental Europe Operations which the Company agreed to sell in September of 2020, while the nine month period also included $75 of realized gains on terminated derivatives used to hedge against a decline in equity market levels and ~~$20~~$21 of gains on interest rate derivatives due to a decline in interest rates.

CRITICAL ACCOUNTING ESTIMATES

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

The Company has identified the following estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability:

•property and casualty insurance product reserves, net of reinsurance;

•group benefit long-term disability ("LTD") reserves, net of reinsurance;

•evaluation of goodwill for impairment;

•valuation of investments and derivative instruments including evaluation of credit losses on fixed maturities, AFS and ACL on mortgage loans; and

•contingencies relating to corporate litigation and regulatory matters.

Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the

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

The Company’s critical accounting estimates are discussed in Part II, Item 7 MD&A in the Company’s 2020 Form 10-K Annual

Report. In addition, Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in the Company's 2020 Form 10-K Annual Report should be read in conjunction with this section to assist with obtaining an understanding of the underlying accounting policies related to these estimates. The following discussion updates certain of the Company’s critical accounting estimates as of ~~March 31,~~September 30, 2021.

Net Income

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Net income for the three months ended September 30, 2021 increased, ~~in 2021~~ primarily due to an increase in net investment income and a change from net realized ~~capital~~ losses ~~in 2020~~ to net realized ~~capital~~ gains, ~~in 2021, as well as higher net investment income, largely~~partially offset by a change from an underwriting gain to an underwriting loss.

Net income for the nine months ended September 30, 2021 increased primarily due to higher net investment income, a change from an underwriting loss to an underwriting gain and a change from net realized losses to net realized gains. For further discussion of investment results, see MD&A - Investment Results.

Underwriting Gain (Loss)

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Underwriting loss infor the three month period ended September 30, 2021 ~~changed from~~compared to an underwriting gain ~~in 2020,~~for the prior year three month period with the deterioration primarily driven by ~~an increase in~~a change to net unfavorable prior accident year development in the 2021 period, principally driven by the new agreement-in-principle to settle BSA claims in third quarter 2021, higher current accident year ~~catastrophe losses~~catastrophes, driven by hurricane Ida, and ~~$24 before-tax of COVID-19 incurred losses in workers’ compensation and financial and other lines in~~

~~first quarter 2021,~~increased underwriting expenses, partially offset by ~~lower underwriting expenses~~the impact of higher earned premiums and a lower current accident year ~~loss and LAE ratio~~losses before catastrophes, ~~and~~including a reduction in direct COVID-19 incurred losses. Underwriting expenses ~~declined due to lower staffing~~increased in 2021 as higher commissions, incentive compensation and technology costs ~~and other expense~~were partially offset by cost savings tofrom Hartford Next and ~~lower travel costs as well as~~ a decrease in the allowance for credit losses on premiums receivable in the 2021 period compared to an increase in the 2020 ~~due to the economic impacts of COVID-19.~~period.

~~Earned Premiums~~

~~[1] Other of $11 and $11~~ Underwriting gain for the ~~three months~~nine month period ended ~~March 31, 2020, and 2021, respectively, is included in the total.~~

~~Three months ended March 31,~~September 30, 2021 compared to an underwriting loss for the ~~three months ended March 31, 2020~~

~~Earned premiums~~ ~~decreased in 2021~~prior year nine month period with the improvement primarily due to ~~written premium declines in 2020 in small commercial as well as in middle & large commercial that were~~lower current accident year losses before catastrophes, driven by ~~the economic impacts~~$250 before tax of COVID-19 ~~including lower new business across most lines as well as reductions~~incurred losses in ~~premiums~~the first nine months of 2020 compared with $30 before tax of COVID-19 incurred losses in the first nine months of 2021, and the impact of higher earned premium, partially offset by higher net unfavorable prior accident year development and higher current accident year catastrophes in the current year period. Amortization of deferred policy acquisition costs decreased from ~~endorsements, principally in workers’ compensation~~the prior year period primarily due to ~~a declining exposure~~lower average base ~~from lower payrolls.~~

~~Written premiums~~commissions despite higher earned premiums. Underwriting expenses increased ~~in 2021 driven by growth in global specialty~~due to higher contingent and ~~small commercial,~~supplemental commissions, incentive compensation and technology costs, partially offset by a ~~decline~~decrease in ~~middle~~the allowance for credit losses on premiums receivable in the 2021 period compared to an increase in the 2020 period and ~~large commercial.~~savings from Hartford Next initiatives.

The Company recognized renewal written pricing increases in all lines except workers’ compensation. In global specialty, our U.S. wholesale book achieved an approximate 22% renewal written price increase, led by excess casualty, property and automobile.

Earned Premiums

[1]Other earned premiums of $12 and $10, for the three months ended September 30, 2020, and 2021, respectively, and $33 and $32 for the nine months ended September 30, 2020 and 2021, respectively, is included in the total.

Written Premiums

[1]Other written premiums of $10 and $11, for the three months ended September 30, 2020, and 2021, respectively, and $31 and $32 for the nine months ended September 30, 2020 and 2021, respectively, is included in the total.

Three and nine months ended September 30, 2021 compared to the three and nine months ended September 30, 2020

Earned premiums for the three and nine month periods increased in 2021 due to written premium increases over the prior 12 months as well as due to higher premiums from audits and endorsements, principally in workers’ compensation due to an increasing exposure base from higher payrolls as the economy recovers from the pandemic.

Written premiums for the three and nine month periods increased in 2021 driven by growth in small commercial, middle & large commercial and global specialty across most lines of business.

The Company recognized renewal written pricing increases in all lines in third quarter 2021 with moderating price increases in middle market and global specialty. In global specialty, our U.S. wholesale book achieved an approximate 14% renewal written price increase, led by excess casualty and property. Global specialty international lines achieved a ~~28%~~17% price increase, led by D&O. In small commercial, renewal written price increases were ~~slightly lower~~higher in 2021 than 2020, with workers' compensation pricing slightly positive in the third quarter of 2021 due to rising wages, along with mid-single digit ~~to high single-digit rate~~ increases in most ~~lines, partially offset by slight written pricing decreases in workers’ compensation.~~other lines. In middle market, ~~pricing increases have moderated from 2020 levels, with~~the Company recognized high single-digit to low double-digit rate increases in most middle market lines other than workers’ compensation, which experienced low single-digit written pricing increases.

New business premium increased in 2021 in both the three and nine month periods driven by growth in small commercial, led by increases in package business ~~offset by slight declines~~and workers' compensation. In addition, new business growth in middle ~~and~~& large commercial ~~lines.~~was led by construction and general liability in the three month period and nearly all lines grew in the nine month period. Global specialty gross new business premium increased in both the three and nine month periods driven by ~~wholesale~~financial lines and ~~financial lines.~~wholesale.

•Small commercial written premium increased in 2021 ~~driven by~~in all lines in the three month period and in all lines except automobile in the nine month period, with the most growth in package business and ~~excess and surplus lines, partially offset by a decline in~~ workers’ compensation.

•Middle & large commercial written premium ~~decreased~~increased in 2021 ~~driven by declines~~ in ~~workers’ compensation, industry verticals~~both the three and ~~national accounts, partially offset~~nine month periods driven by growth in ~~specialty~~most lines of business, with the most significant growth in general industries, large and ~~commercial excess lines.~~complex solutions and industry verticals.

•Global specialty written premium increased in 2021 in both the three and nine month periods driven by growth in U.S. wholesale, global reinsurance ~~U.S.~~and financial ~~lines~~lines.

Current Accident Year Loss and LAE Ratio before Catastrophes

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Current accident year loss and LAE ratio before catastrophesdecreased in 2021 in the three month period primarily due to lower loss ratios in global specialty, ~~and in middle market~~ workers’ compensation, ~~excluding~~general liability and non-catastrophe property losses written as part of small commercial package business. Current accident year loss and LAE ratio before catastrophes decreased in 2021 in the ~~impact of~~nine month period primarily due to lower COVID-19 ~~claims.~~incurred losses in 2021 as well as due to lower loss ratios in global specialty, workers’ compensation, and general liability. The lower loss ratios in global specialty for both periods were largely the result of rate and underwriting actions to improve profitability in those lines

and was driven by international, global reinsurance, U.S. wholesale ~~global reinsurance~~ and U.S. financial lines.

~~First quarter~~The three months ended September 30, 2021 included $3 before tax of COVID-19 incurred losses, all within financial and other lines. The nine months ended September 30, 2021 included COVID-19 incurred losses of ~~$24~~$30 before tax, including losses of $20 in workers’ compensation and $4$10 in financial and other lines.

The three month period in 2020 included COVID-19 incurred losses of $37 before tax, including $17 of losses in workers' compensation, net of favorable frequency on other workers' compensation claims, and $20 of losses in financial and other lines. The nine month period in 2020 included COVID-19 incurred losses of $250 before tax, including losses of $141 in property, $52 in workers’ compensation, net of favorable frequency on other workers' compensation claims, and $57 in financial and other lines.

Included in the $141 of COVID-19 property incurred losses and loss adjustment expenses in the nine months ended September 30, 2020 were $101 of losses arising from a small number of property policies that do not require direct physical loss or damage and from policies intended to cover specific business needs, including crisis management and performance disruption as well as a reserve of $40 for legal defense costs. Workers’ compensation COVID-19 incurred losses include claims in both states with presumptive coverage and in other states where the claimant must prove their COVID-19 illness was contracted at

work. Financial lines COVID-19 claims include exposures in D&O, E&O and employment practices liability and the recessionary impacts on the surety book of business.

Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Current accident year catastrophe losses ~~net of reinsurance~~ for the three months ended ~~March 31,~~September 30, 2021 included ~~$154 of~~ losses from hurricane Ida and, to a lesser extent, losses from tropical storms and wind and hail events in the Midwest and Mountain West.

Current accident year catastrophe losses for the three months ended September 30, 2020 included losses from hurricane Laura, Pacific Coast wildfires, tropical storm Isaias, a Midwest derecho, and other wind and hail events mostly in the Central Plains.

Current accident year catastrophe lossesfor the nine months ended September 30, 2021 included losses from hurricane Ida, tropical storms and February winter storms primarily in the South, with the remaining losses largely from tornado, wind and hail events, mostly concentrated in Texas, the ~~South~~Southeast and ~~along the Pacific coast.~~ Midwest.

Current accident year catastrophe losses infor the nine months ended September 30, 2020 were primarily from civil unrest, hurricane Laura, Pacific Coast wildfires, tropical storm Isaias and from tornado, wind and hail events in the South, Midwest and ~~Southeast.~~Central Plains.

Prior accident year development was a net unfavorable ~~$238~~for the three and nine months ended September 30, 2021. Reserve development in both 2021 ~~primarily due to~~periods included an increase in general liability that included a reserve increase related to the settlement with Boy Scouts of America on sexual molestation and sexual abuse claims, partially offset by reserve decreases ~~in workers’~~for workers' compensation, package business, bond and, ~~commercial property. Net unfavorable reserve development in 2020 primarily included reserve increases~~ for ~~marine, general liability and workers' compensation pool participations, partially offset by~~the nine month period, reserve decreases for ~~workers' compensation~~catastrophes and ~~catastrophes.~~commercial property.

Net favorable reserve development for the three month period in 2020 included reserve decreases for workers' compensation, package business and professional liability. Net unfavorable reserve development for the nine months ended September 30, 2020 included reserve increases for general liability driven primarily by increases in reserves for sexual molestation and abuse claims, and increases in commercial automobile liability reserves, partially offset by reserve decreases for workers' compensation, catastrophes and package business. Favorable development on prior year catastrophe reserves in the nine month period in 2020 was due to recognizing a $29 before tax

subrogation benefit from a settlement with PG&E over certain of the 2017 and 2018 California wildfires and a reduction in estimated catastrophe losses from a number of wind and hail events that occurred in 2018 and 2019.

Prior accident year development in the three and nine month periods of both 2021 and 2020 included reserve increases related to Navigators Group on 2018 and prior accident years that was economically ceded to NICO but for which the benefit was not recognized in earnings as it has been recorded as a deferred gain on retroactive reinsurance.

Net Income

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Net income ~~increased $37 from first quarter 2020,~~decreased in both the three and nine month periods, largely driven by a ~~change from net realized capital losses in first quarter 2020 to net realized gains in first quarter 2021 and an increase~~decrease in underwriting gain, partially offset by ~~a decrease~~an increase in net investment income and, for the nine month period, a change from net realized losses to net realized gains and an increase in net servicing income.

Underwriting Gain

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Underwriting gain decreased in ~~2021 increased~~both the three and nine month periods, primarily due to ~~lower~~higher personal automobile ~~claim frequency from fewer miles driven~~loss costs, an increase in underwriting expenses, the effect of a decrease in earned premiums and, for the nine month period, higher ~~net~~current accident year non-catastrophe property losses and less favorable prior accident year reserve development, partially offset by ~~higher~~lower current accident year catastrophe ~~losses.~~losses in both the three and nine-month periods. Contributing to the increase in underwriting expenses in both the three and nine

86

|


Table of Contents						Index to MD&A

Part I - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

month periods was higher costs for AARP direct marketing, incentive compensation, and technology, partially offset by cost savings from the Hartford Next initiative.

Earned Premiums

Written Premiums

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Earned premiums decreased in both the ~~2021 period reflecting~~three and nine month periods due to the effect of a decline in written premium over the prior twelve months in both Agency channels and in AARP Direct. For the nine month period, the decrease was partially offset by the effect of $81 of premium credits given to

automobile policyholders in the second quarter of 2020 in recognition of shelter-in-place guidelines that reduced miles driven in 2020.

Written premiums decreased in automobile for both the ~~2021 period in AARP Direct~~three and ~~both Agency channels~~nine month periods due to the effect of non-renewed premium exceeding new ~~business. Contributing~~business which, for the nine month period, was partially offset by the effect of the premium credits given in the 2020 period. Written premium declined in homeowners in both the three and nine month periods due to the ~~decline in written~~effect of non-renewed premium ~~were endorsements reducing premiums for fewer miles driven, decreases in surcharges for moving violations and lower~~exceeding new ~~vehicle sales.~~business. Both new business and policy count retention, ~~declined~~net of cancellations, increased in ~~first~~the three month period while decreasing in the nine month period. Policy count retention, net of cancellations, was depressed in third quarter ~~2021 compared~~2020 due to ~~the same period~~processing cancellations for non-payment of premium that had been suspended in second quarter 2020.

Renewal written pricing increases were ~~lower~~relatively flat in automobile ~~compared to~~for the ~~first quarter of 2020 though have stabilized since fourth quarter 2020.~~three months period and modestly lower for the nine month period. Renewal written pricing increases for homeowners were higher infor both the ~~2021 period~~three and nine month periods in response to recent loss cost trends.

~~Policy count retention~~ ~~decreased in both automobile and homeowners driven by both competition and the effect of renewal written price increases.~~

Policies in-force decreased in the 2021 period in both automobile and homeowners driven by not generating enough new business to offset the loss of non-renewed policies.

Current Accident Year Loss and LAE Ratio before Catastrophes

Three and nine months ended September 30, 2021 compared to the three and nine months ended September 30, 2020

Current accident year Loss and LAE ratio before catastrophes increased in automobile and was flat in homeowners for the three month period and increased in both automobile and homeowners for the nine month period. The increase in automobile for both the three and nine month periods was principally due to higher claim frequency with miles driven increasing as we emerge from the pandemic and an increase in average claim severity. For the three month period, the homeowners current accident year loss and LAE ratio before catastrophes was essentially flat to prior year. Earned pricing

7687

|


T ~~able~~Table of Contents						Index to MD&A

Part I - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

~~Current Accident Year Loss~~increases and ~~LAE Ratio before Catastrophes~~

~~Three months ended March 31, 2021 compared to the three months ended March 31, 2020~~

~~Current accident year Loss~~lower weather and ~~LAE ratio before catastrophes~~ ~~decreased in automobile and increased in homeowners. The decrease in automobile was principally due to lower claim~~non-weather frequency ~~as a result of fewer miles driven. The increase in homeowners was due to~~were offset by an increase in both weather and non-weather ~~non-catastrophe~~severity. For the nine month period, the homeowners current accident year loss and LAE ratio before catastrophes increased due to an increase in severity, partially offset by the effect of earned pricing increases. Contributing to the increase in homeowners severity was the effect of higher rebuilding costs and a greater number of large losses.

Current Accident Year Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Current accident year catastrophe losses decreased for ~~first quarter 2021 included losses from February winter storms primarily in~~ the ~~South, as well as losses from wind~~both the three and ~~hail events in the South and Pacific Coast.~~nine month periods. Current accident year catastrophe losses for ~~first~~the third quarter ~~2020 were~~of 2021 primarily included losses from ~~tornado,~~hurricane Ida, California wildfires, tropical storms and wind and hail events in the Midwest and ~~Southeast.~~Mountain West. Current accident year catastrophe losses for the nine months ended September 30, 2021 included losses from hurricane Ida, tropical storms, California wildfires, and February winter storms, primarily in the South, with the remaining losses largely from tornado, wind and hail events, mostly concentrated in Texas, the Southeast, Midwest and Mountain West.

Current accident year catastrophe losses for the three months ended September 30, 2020 were primarily from Pacific Coast wildfires, tropical storm Isaias, hurricane Laura, a Midwest derecho, and other wind and hail events, mostly in the Central Plains. Current accident year catastrophe losses for the nine months ended September 30, 2020 were primarily from Pacific Coast wildfires, tropical storm Isaias, hurricane Laura, and various tornado, wind and hail events in the South, Midwest and Central Plains.

Prior accident year development was relatively flat in the three month period and less favorable in the nine month period, with the decrease in the nine month period largely due to lower reserve reductions for prior year catastrophes. Prior accident year development was favorable for both the three and nine months ended September 30, 2021, ~~period, driven mostly by a~~with reserve ~~reduction~~reductions in personal automobile liability and, for the ~~2017 to 2019 accident years and~~nine month period, a reduction in ~~prior accident year catastrophes driven by an~~catastrophe reserves including the benefit of higher expected subrogation ~~recovery~~recoveries related to athe 2017 and 2018 California ~~wildfire.~~wildfires. Prior accident year development was favorable in both the three and nine month periods ended September 30, 2020 ~~period primarily due to a decrease~~with reserve reductions in personal automobile liability and, for the nine month period, a reduction in catastrophe reserves. The reduction in catastrophe reserves for the ~~2018 accident year and a decrease in catastrophe reserves, principally~~nine months ended September 30, 2020 was driven by lower estimated losses for the 2017 and 2018 California ~~wildfires.~~wildfires, including a $260 subrogation benefit from PG&E, as well as a reduction in losses for various 2018 and 2019 wind and hail events.

7788

|


T ~~able~~Table of Contents						Index to MD&A

Part I - Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations


\|PROPERTY & CASUALTY OTHER OPERATIONS - RESULTS OF OPERATIONS

~~Results of Operations~~

Underwriting Summary


		Three Months Ended March 31,						Three Months Ended September 30,						Nine Months Ended September 30,
		2021		2020		Change				2021		2020		Change		2021		2020		Change

Losses and loss adjustment expenses	Losses and loss adjustment expenses								Losses and loss adjustment expenses
Prior accident year development [1]	Prior accident year development [1]	$	33	$	—	NM			Prior accident year development [1]	$	(5)	$	11	(145	%)	$	28	$	15	87	%
Total losses and loss adjustment expenses	Total losses and loss adjustment expenses	33		—		NM			Total losses and loss adjustment expenses	(5)		11		(145	%)	28		15		87	%
Underwriting expenses	Underwriting expenses	2		3		(33	%)		Underwriting expenses	2		2		—	%	6		8		(25	%)
Underwriting loss		(35)		(3)		NM
Underwriting gain (loss)									Underwriting gain (loss)	3		(13)		123	%	(34)		(23)		(48	%)
Net investment income [2]	Net investment income [2]	16		16		—	%		Net investment income [2]	22		14		57	%	58		40		45	%
Net realized capital gains (losses) [2]		2		(7)		129	%
Net realized gains (losses) [2]									Net realized gains (losses) [2]	2		2		—	%	7		(3)		NM

Income (loss) before income taxes		(17)		6		NM
Income tax expense (benefit) [3]		(4)		1		NM
Net income (loss)		$	(13)	$	5	NM
Income before income taxes									Income before income taxes	27		3		NM		31		14		121	%
Income tax expense [3]									Income tax expense [3]	5		1		NM		5		2		150	%
Net income									Net income	$	22	$	2	NM		$	26	$	12	117	%

Net income ~~(loss)~~

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Net income ~~(loss)~~ ~~changed from net income~~increased in the ~~2020 period to a net loss~~three months ended September 30, 2021, primarily from favorable prior accident year reserve development in the 2021 period ~~due~~compared to unfavorable prior accident year reserve development in ~~first quarter~~the 2020 period, as well as higher net investment income.

Net income increased in the nine months ended September 30, 2021, ~~partially offset by~~primarily due to higher net investment income and a change from net realized ~~capital~~ losses ~~in first quarter 2020~~ to net realized ~~capital~~ gains, ~~in first quarter 2021.~~partially offset by higher unfavorable prior accident year reserve development.

Underwriting ~~(loss)~~gain ~~increased~~ in the three months ended September 30, 2021 compared to an underwriting loss in the prior year period primarily due to favorable prior accident year development in the current year period compared to unfavorable prior accident year development in ~~first quarter~~the prior year period that was primarily driven by reserve increases for runoff assumed reinsurance business.

Underwriting loss increased in the nine months ended September 30, 2021, due to an increase in unfavorable prior accident year development, with unfavorable development in the 2021 period driven by an increase in reserves for sexual molestation and sexual abuse claims, primarily on assumed reinsurance, partially offset by a reduction in the allowance for uncollectible ~~reinsurance.~~reinsurance

Asbestos and environmental reserve comprehensive annual reviews will occur in the fourth quarter of 2021. For information on A&E reserves, see MD&A - Critical Accounting Estimates, Asbestos and Environmental Reserves included in the Company's 2020 Form 10-K Annual Report.

Net Income

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Net incomedecreased ~~in first~~from the third quarter ~~2021,~~of 2020 largely driven by ~~$185 of~~an increase in excess mortality ~~in group life, primarily caused by direct~~losses and ~~indirect impacts of~~short-term disability losses related to COVID-19 and higher operating expenses, partially offset by ~~a change from~~higher net investment income and increased premium volume.

For the nine month period ended September 30, 2021, net income decreased largely driven by higher excess mortality and short-term disability losses and higher operating expenses, partially offset by an increase in net investment income, an increase in net realized ~~capital losses in first quarter 2020 to net realized capital~~ gains ~~in first quarter 2021.~~and increased premium volume.

Insurance operating costs and other expenses for both the three and nine month periods were ~~flat~~higher year over year as ~~a reduction~~an increase in ~~integration~~incentive compensation, technology costs and claim costs to handle elevated claim levels resulting from the pandemic was partially offset by lower staffing and other costs due to the Hartford Next operational transformation and cost reduction program ~~was offset~~and a decrease in integration costs.

In the three month period, expenses were also unfavorably impacted by a lower decrease in the allowance for credit losses on premiums receivable. In the nine month period, a decrease in the allowance for credit losses on premiums receivable in the current year compared to an increase in ~~commissions driven,~~the allowance in ~~part, by growth in premiums and other considerations.~~the prior year.

Fully Insured Ongoing Premiums

[1] Other of ~~$58~~$70 and ~~$77~~$79 is included in the three months ended ~~March 31,~~September 30, 2020, and 2021, respectively, and $200 and $235 for the nine months ended September 30, 2020 and 2021, respectively, which includes other group coverages such as retiree health insurance, critical illness, accident, hospital indemnity and participant accident coverages.

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Fully insured ongoing premiums increased primarily due to ~~higher in-force employer group disability premiums~~an increase in exposure on existing accounts as our customers emerge from the pandemic, as well as strong persistency and ~~higher supplemental health product premiums.~~sales.

Fully insured ongoing sales, excluding buyouts decreased for the three month period, as the prior year included two large national account sales. For the nine month period, fully insured ongoing sales, excluding buyouts, increased ~~in all product lines, though most significantly~~with increases in group ~~disability.~~

~~Ratios~~

disability and other partially offset by a decrease in group life.

Ratios

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Total loss ratio increased ~~12.4~~10.9 points for the three month period reflecting a higher loss ratio in both group life and group disability. The group life loss ratio increased 23.4 points compared to prior year due to increased excess mortality, partially offset by reserve strengthening related to late reported death claims in the third quarter of 2020. Excess mortality recognized in the three months ended September 30, 2021 was $212, or 35.9 points, compared to $42, or 7.1 points, in the same prior year period. Included in the excess mortality estimate for the three months ended September 30, 2021 were estimated losses of $233, or 39.4 points, for claims with dates of loss in the third quarter, partially offset by favorable

development of $21, or 3.6 points, on excess mortality estimates related to prior quarters, the majority of which relates to favorable development on second quarter 2021 claims. The disability loss ratio increased 3.1 points due to an increase in short-term disability claim incidence as the prior year period was more favorably impacted by fewer elective procedures during the early stages of the pandemic. The increased short-term disability claim incidence is partially offset by lower long-term disability claim incidence and stronger recoveries related to prior incurral year reserves.

Total loss ratio increased 7.5 points for the nine month period reflecting a ~~lower~~higher group life loss ratio and a slightly higher group disability loss ratio. The group life loss ratio increased ~~33.7~~18.3 points ~~primarily~~ driven by ~~higher mortality, including $185 of~~a 18.7 point increase in excess mortality claims ~~in first quarter 2021 due~~compared to the ~~direct~~nine month period ended September 30, 2020. For the nine month period ended September 30, 2021 and ~~indirect effects of COVID-19.~~2020, excess mortality losses were $422 and $87, respectively. The group disability loss ratio ~~decreased 3.1~~increased 0.6 points ~~primarily~~ due to ~~more~~

~~favorable prior incurral year development driven by higher claim recoveries and continued improving claim incidence. The three months period ending March 2021 included $13 of losses on~~an increase in short-term disability ~~and~~claim incidence as the prior year period was more favorably impacted by fewer elective procedures during the early stages of the pandemic. The increased short-term disability claim incidence was partially offset by a higher New York Paid Family Leave ~~claims related to COVID-19 as compared to $16 for~~risk adjustment recognized in the ~~three months ended March 2020.~~2021 period.

Expense ratio ~~decreased 0.9 points due~~increased for the three month period and was relatively flat for the nine month period. Both the three and nine month periods included an increase in incentive compensation, technology costs and claim costs to handle elevated claim levels resulting from the pandemic, offset by lower staffing and other costs as a result of the Hartford Next operational transformation and cost reduction program, and higher earned premiums. The three month period included a lower decrease in the ~~effect of higher premiums.~~allowance for credit losses on premium receivables. The nine month period included a decrease in the allowance for credit losses on premiums receivable compared to an increase in the allowance in the prior year period.

Net Income

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Net incomeincreased for the three month period primarily due to higher fee income as a result of an increase in daily average assets under management, partially offset by higher variable ~~costs. The effect of~~costs and a change from net realized gains to net realized ~~capital~~losses. Realized gains (losses) consist of changes in ~~first quarter 2021 from~~the market value of Company assets invested in certain funds, which was driven by changes in equity markets. For the nine month period, net ~~realized capital losses in first quarter 2020 was~~income increased primarily due to higher fee income, partially offset by higher variable costs and the effect of

a $12 reduction in contingent consideration payable associated with the acquisition of Lattice that was recognized in first quarter 2020. ~~Realized gains (losses) consist of changes in the market~~

~~value of Company assets invested in some of the funds which was driven by changes in equity markets.~~

Hartford Funds AUM

~~March 31,~~September 30, 2021 compared to ~~March 31,~~September 30, 2020

Hartford Funds AUMincreased primarily due to net inflows and an increase in market values ~~partially offset by the effect of net outflows~~ over the ~~prior~~previous twelve months. ~~The~~For the nine months ended September 30, 2021, the Company recognized net inflows on mutual fund and ETP of ~~$774 for the first quarter of 2021~~$3.5 billion, compared to net outflows of ~~$1.4~~$3.4 billion ~~in first quarter~~for the nine months ended September 30, 2020.

Net Loss

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Net loss available to common stockholders for the third quarter of 2021 decreased from the third quarter of 2020 primarily due to a decrease in restructuring and other costs and the effect of a loss from the Company’s previously owned equity interest in Talcott Resolution in the 2020 period, partially offset by a decrease in net realized gains. Net loss available to common stockholders decreased in the nine month period as a decrease in restructuring and other costs and a change from net realized ~~capital~~ losses ~~in the first quarter 2020~~ to net realized

~~capital~~ gains was partially offset by a change from income to loss from the Company’s previously owned equity interest in ~~the first quarter 2021, a decrease~~Talcott Resolution, an increase in ~~insurance~~ operating costs and other expenses and ~~a decrease in interest expense, partially offset by restructuring costs in the first quarter of 2021, a decrease in~~lower net investment ~~income and a larger loss on~~income.

Income (loss) from the ~~Company's retained~~Company’s previously owned equity interest in ~~the former life and annuity operations. The loss on the retained equity interest, recognized within other revenues,~~Talcott Resolution was ~~($8) and ($4)~~$(21) for the three months ended ~~March 31,~~September 30, 2020 and was $(11) and $43, respectively, for the nine months ended September 30, 2021 and ~~2020 respectively.~~2020. The increase in operating costs and other expenses for the nine month period was primarily driven by legal and consulting costs associated with the unsolicited proposals from Chubb Limited to acquire the Company, partially offset by lower consulting fees. Net realized gains for the nine months ended September 30, 2021 included a $46 gain on sale of the Company’s 9.7% retained equity interest in Talcott Resolution.

~~Interest Expense~~

Interest Expense

Three and nine months ended ~~March 31,~~September 30, 2021 compared to the three and nine months ended ~~March 31,~~September 30, 2020

Interest expense was flat year over year for the three month period and decreased ~~as a result~~for the nine month period primarily due to the repayment of ~~the Company repaying at maturity the $500 principal amount of its~~our 5.5% senior notes in ~~the first quarter~~March of 2020.

ENTERPRISE RISK MANAGEMENT

The Company’s Board of Directors has ultimate responsibility for risk oversight, as described more fully in our Proxy Statement, while management is tasked with the day-to-day management of the Company’s risks.

The Company manages and monitors risk through risk policies, controls and limits. At the senior management level, an Enterprise Risk and Capital Committee (“ERCC”) oversees the risk profile and risk management practices of the Company.

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

•risk identification and assessment;

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

•risk monitoring; and

•internal and external risk reporting.

The Company categorizes its main risks as insurance risk, operational risk and financial risk. Insurance risk and financial risk are described in more detail below. Operational risk, including cybersecurity and business resiliency response to COVID-19, and specific risk tolerances for natural catastrophes and pandemic risk are described in the ERM section of the MD&A in The Hartford’s 2020 Form 10-K Annual Report.

~~Insurance Risk~~|INSURANCE RISK

Insurance risk is the risk of losses of both a catastrophic and non-catastrophic nature on the P&C and Group Benefits products the Company has sold. Catastrophe insurance risk is the exposure arising from both natural (e.g., weather, earthquakes, wildfires, pandemics) and man-made catastrophes (e.g., terrorism, cyber-attacks) that create a concentration or aggregation of loss across the Company's insurance or asset portfolios.

Sources of Insurance Risk Non-catastrophe insurance risks exist within each of the Company's segments except Hartford Funds and include:

•Property- Risk of loss to personal or commercial property from automobile related accidents, weather, explosions, smoke, shaking, fire, theft, vandalism, inadequate installation, faulty equipment, collisions and falling objects, and/or machinery mechanical breakdown resulting in physical damage and other covered perils.

•Liability- Risk of loss from automobile related accidents, uninsured and underinsured drivers, lawsuits from accidents, defective products, breach of warranty, negligent acts by

professional practitioners, environmental claims, latent exposures, fraud, coercion, forgery, failure to fulfill obligations per contract surety, liability from errors and omissions, losses from political and credit coverages, losses from derivative lawsuits, and other securities actions and covered perils.

•Mortality- Risk of loss from unexpected trends in insured deaths impacting timing of payouts from group life insurance, personal or commercial automobile related accidents, and death of employees or executives during the course of employment, while on disability, or while collecting workers compensation benefits.

•Morbidity- Risk of loss to an insured from illness incurred during the course of employment or illness from other covered perils.

•Disability- Risk of loss incurred from personal or commercial automobile related losses, accidents arising outside of the workplace, injuries or accidents incurred during the course of employment, or from equipment, with each loss resulting in short term or long-term disability payments.

•Longevity- Risk of loss from increased life expectancy trends among policyholders receiving long-term benefit payments.

•Cyber Insurance- Risk of loss to property, breach of data and business interruption from various types of cyber-attacks.

Catastrophe risk primarily arises in the property, automobile, workers' compensation, casualty, group life, and group disability lines of business.

Impact Non-catastrophe insurance risk can arise from unexpected loss experience, underpriced business and/or underestimation of loss reserves and can have significant effects on the Company’s earnings. Catastrophe insurance risk can arise from various unpredictable events and can have significant effects on the Company's earnings and may result in losses that could constrain its liquidity.

Management The Company's policies and procedures for managing these risks include disciplined underwriting protocols, exposure controls, sophisticated risk-based pricing, risk modeling, risk transfer, and capital management strategies. The Company has established underwriting guidelines for both individual risks, including individual policy limits, and risks in the aggregate, including aggregate exposure limits by geographic zone and peril. The Company uses both internal and third-party models to estimate the potential loss resulting from various catastrophe events and the potential financial impact those events would have on the Company's financial position and results of operations across its businesses.

In addition, certain insurance products offered by The Hartford provide coverage for losses incurred due to cyber events and the

In addition to the property catastrophe reinsurance coverage described in the above table, the Company has other reinsurance agreements that cover property catastrophe losses. The Per Occurrence Property Catastrophe Treaty, and Workers' Compensation Catastrophe Treaty include a provision to reinstate one limit in the event that a catastrophe loss exhausts limits on one or more layers under the treaties.

Reinsurance for Terrorism- For the risk of terrorism, private sector catastrophe reinsurance capacity is generally limited and largely unavailable for terrorism losses caused by nuclear, biological, chemical or radiological attacks. As such, the Company's principal reinsurance protection against large-scale terrorist attacks is the coverage currently provided through TRIPRA to the end of 2027.

TRIPRA provides a backstop for insurance-related losses resulting from any “act of terrorism”, which is certified by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Attorney General, for losses that exceed a threshold of industry losses of $200. Under the program, in any one calendar year, the federal government will pay a percentage of losses incurred from a certified act of terrorism after an insurer's losses exceed 20% of the Company's eligible direct commercial earned premiums of the prior calendar year up to a combined annual aggregate limit for the federal government and all insurers of $100 billion. The

percentage of losses paid by the federal government is 80%. The Company's estimated deductible under the program is $1.6 billion for 2021. If an act of terrorism or acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, Congress would be responsible for determining how additional losses in excess of $100 billion will be paid.

Reinsurance for A&E and Navigators Group Reserve Development - The Company has two adverse development cover (“ADC”) reinsurance agreements in place, both of which are accounted for as retroactive reinsurance. One agreement covers substantially all A&E reserve development for 2016 and prior accident years (the “A&E ADC”) and the other covers substantially all reserve development of Navigators Insurance Company and certain of its affiliates for 2018 and prior accident years (“Navigators ADC”). For more information on the A&E ADC and the Navigators ADC, see Note 1 - 1, Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements, included in The Hartford's 2020 Form 10-K Annual Report and Note ~~-9,~~9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

|FINANCIAL RISK

Financial risks include direct and indirect risks to the Company's financial objectives from events that impact financial market conditions and the value of financial assets. Some events may cause correlated movement in multiple risk factors. The primary sources of financial risks are the Company's invested assets.

Consistent with its risk appetite, the Company establishes financial risk limits to control potential loss on a U.S. GAAP, statutory, and economic basis. Exposures are actively monitored and managed, with risks mitigated where appropriate. The Company uses various risk management strategies, including limiting aggregation of risk, portfolio re-balancing and hedging with over-the-counter and exchange-traded derivatives with

counterparties meeting the appropriate regulatory and due diligence requirements. Derivatives are utilized to achieve the following Company-approved objectives: hedging risk arising from interest rate, equity market, commodity market, credit spread and issuer default, price or currency exchange rate risk or volatility; managing liquidity; controlling transaction costs; and engaging in income generation covered call transactions and synthetic replication transactions. Derivative activities are monitored and evaluated by the Company’s compliance and risk management teams and reviewed by senior management. The Company identifies different categories of financial risk, including liquidity, credit, interest rate, equity, and foreign currency exchange.

Liquidity Risk

Liquidity risk is the risk to current or prospective earnings or capital arising from the Company's inability or perceived inability to meet its contractual funding obligations as they come due.

Sources of Liquidity Risk Sources of liquidity risk include funding risk, company-specific liquidity risk and market liquidity risk resulting from differences in the amount and timing of sources and uses of cash as well as company-specific and general market conditions. Stressed market conditions may impact the ability to sell assets or otherwise transact business and may result in a significant loss in value.

Impact Inadequate capital resources and liquidity could negatively affect the Company’s overall financial strength and its ability to generate cash flows from its businesses, borrow funds at competitive rates, and raise new capital to meet operating and growth needs.

Management The Company has defined ongoing monitoring and reporting requirements to assess liquidity across the enterprise under both current and stressed market conditions. The Company measures and manages liquidity risk exposures and funding needs within prescribed limits across legal entities, taking into account legal, regulatory and operational limitations to the transferability of liquid assets among legal entities. The Company also monitors internal and external conditions, and identifies material risk changes and emerging risks that may impact operating cash flows or liquid assets. The liquidity requirements of ~~the~~The Hartford Financial Services Group, Inc. ("HFSG Holding ~~Company~~Company") have been and will continue to be met by the HFSG Holding Company's fixed maturities, short-term investments and cash, and dividends

from its subsidiaries, principally its insurance operations, as well as the issuance of common stock, debt or other capital securities and borrowings from its credit facilities as needed. The Company maintains multiple sources of contingent liquidity including a revolving credit facility, an intercompany liquidity agreement that allows for short-term advances of funds among the HFSG Holding Company and certain affiliates, and access to collateralized advances from the Federal Home Loan Bank of Boston ("FHLBB") for certain affiliates. The Company's CFO has primary responsibility for liquidity risk.

Refer to the Capital Resources & Liquidity section of MD&A for the discussion of what the Company is doing to manage liquidity during the COVID-19 pandemic.

Credit Risk and Counterparty Risk

Credit risk is the risk to earnings or capital due to uncertainty of an obligor’s or counterparty’s ability or willingness to meet its

reviews and private securities are subject to management approval. Mitigation strategies vary across the three sources of credit risk, but may include:

•Investing in a portfolio of high-quality and diverse securities;

•Selling investments subject to credit risk;

•Hedging through use of credit default swaps;

•Clearing derivative transactions through central clearing houses that require daily variation margin;

•Entering into derivative and reinsurance contracts only with strong creditworthy institutions;

•Requiring collateral; and

•Non-renewing policies/contracts or reinsurance treaties.

The Company has developed credit exposure thresholds which are based upon counterparty ratings. Aggregate counterparty credit quality and exposure are monitored on a daily basis

utilizing an enterprise-wide credit exposure information system that contains data on issuers, ratings, exposures, and credit limits. Exposures are tracked on a current and potential basis and aggregated by ultimate parent of the counterparty across investments, reinsurance receivables, insurance products with credit risk, and derivatives.

As of ~~March 31,~~September 30, 2021, the Company had no investment exposure to any credit concentration risk of a single issuer or counterparty greater than 10% of the Company’s stockholders' equity, other than the U.S. government and certain U.S. government agencies. For further discussion of concentration of credit risk in the investment portfolio, see the Concentration of Credit Risk section in Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

Credit Risk of Derivatives

The Company uses various derivative counterparties in executing its derivative transactions. The use of counterparties creates credit risk that the counterparty may not perform in accordance with the terms of the derivative transaction.

Downgrades to the credit ratings of the Company’s insurance operating companies may have adverse implications for its use of derivatives. In some cases, downgrades may give derivative counterparties for over-the-counter ("OTC") derivatives and clearing brokers for OTC-cleared derivatives the right to cancel and settle outstanding derivative trades or require additional collateral to be posted. In addition, downgrades may result in counterparties and clearing brokers becoming unwilling to engage in or clear additional derivatives or may require additional collateralization before entering into any new trades.

The Company also has derivative counterparty exposure policies which limit the Company’s exposure to credit risk. Credit exposures are generally quantified based on the prior business day’s net fair value, including income accruals, of all derivative positions transacted with a single counterparty for each separate legal entity. The Company enters into collateral arrangements in connection with its derivatives positions and collateral is pledged to or held by, or on behalf of, the Company to the extent the exposure is greater than zero, subject to minimum transfer thresholds. For the ~~three~~nine months ended ~~March 31,~~September 30, 2021, the Company incurred no losses on derivative instruments due to counterparty default. For further

discussion, see the Derivative Commitments section of Note 1213 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.

Use of Credit Derivatives

The Company may also use credit default swaps to manage credit exposure or to assume credit risk to enhance yield.

Credit Risk Reduced Through Credit Derivatives

The Company uses credit derivatives to purchase credit protection with respect to a single entity or referenced index. The Company purchases credit protection through credit default swaps to economically hedge and manage credit risk of certain fixed maturity investments across multiple sectors of the investment portfolio.

Credit Risk Assumed Through Credit Derivatives

The Company also enters into credit default swaps that assume credit risk as part of replication transactions. Replication transactions are used as an economical means to synthetically

Condition, Results of Operations and Liquidity section of this MD&A.

Management The Company manages its exposure to interest rate risk by constructing investment portfolios that seek to protect the ~~firm~~Company from the economic impact associated with changes in interest rates by setting portfolio duration targets that are aligned with the duration of the liabilities that they support. The Company analyzes interest rate risk using various models including parametric models and cash flow simulation under various market scenarios of the liabilities and their supporting investment portfolios. Key metrics that the Company uses to quantify its exposure to interest rate risk inherent in its invested assets and the associated liabilities include duration, convexity and key rate duration.

The Company utilizes a variety of derivative instruments to mitigate interest rate risk associated with its investment portfolio or to hedge liabilities. Interest rate caps, floors, swaps, swaptions, and futures may be used to manage portfolio duration.

Equity Risk

Equity risk is the risk of financial loss due to changes in the value of global equities or equity indices.

Sources of Equity Risk The Company has exposure to equity risk from invested assets, assets that support the Company’s pension and other post-retirement benefit plans, and fee income derived from Hartford Funds assets under management. In addition, up until June 30, 2021, the Company ~~has~~had equity exposure through a 9.7% ownership interest in Talcott Resolution. The sale of Talcott Resolution was completed on June 30, 2021, and the Company received a total of $217 in connection with the sale of its 9.7% ownership interest, resulting in ~~the limited partnership, Hopmeadow Holdings LP, that owns the life and annuity business sold in 2018.~~a realized gain of $46.

Impact The investment portfolio is exposed to losses from market declines affecting equity securities and derivatives, which could negatively impact the Company's reported earnings. In addition, investments in limited partnerships and other alternative investments generally have a level of correlation to domestic equity market levels and can expose the Company to losses in earnings if valuations decline; however, earnings impacts are recognized on a lag as results from private equity investments and other funds are generally reported on a three-month delay. For assets supporting pension and other post-retirement benefit plans, the Company may be required to make additional plan contributions if equity investments in the plan portfolios decline in value. Hartford Funds earnings are also significantly influenced by the U.S. and other equity markets. Generally, declines in equity markets will reduce the value of average daily assets under management and the amount of fee income generated from those assets. Increases in equity markets will generally have the inverse impact.

For a discussion of impacts resulting from the COVID-19 pandemic, refer to the Impact of COVID-19 on ~~our financial condition, results~~Our Financial Condition, Results of ~~operations~~Operations and ~~liquidity~~Liquidity section of this MD&A.

Management The Company uses various approaches in managing its equity exposure, including limits on the proportion of assets invested in equities, diversification of the equity portfolio, and, at times, hedging of changes in equity indices. For assets supporting pension and other post-retirement benefit plans, the asset allocation mix is reviewed on a periodic basis. In order to minimize risk, the pension plans maintain a listing of permissible and prohibited investments and impose concentration limits and investment quality requirements on permissible investment options.

Foreign Currency Exchange Risk

Foreign currency exchange risk is the risk of financial loss due to changes in the relative value between currencies.

Sources of Currency Risk The Company has foreign currency exchange risk in non-U.S. dollar denominated cash, fixed maturities, equities, and derivative instruments. In addition, the Company has non-U.S. subsidiaries, some with functional currencies other than U.S. dollar, and which transact business in multiple currencies resulting in assets and liabilities denominated in foreign currencies.

Impact Changes in relative values between currencies can create variability in cash flows and realized or unrealized gains and losses on changes in the fair value of assets and liabilities.

The fair value of fixed maturities, AFS decreased as compared to December 31, 2020, primarily due to a decrease in valuations due to higher interest rates, partially offset by tighter credit spreads. Fixed maturities, FVO, included within other investments on the Condensed Consolidated Balance Sheets, are not included in the preceding table. For further discussion on FVO securities, see Note 4 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.

The fair value of fixed maturities, AFS decreased as compared with December 31, 2020, primarily due to a decrease in valuations due to higher interest rates, partially offset by tighter credit spreads. ~~Furthermore, the~~The Company decreased holdings inof corporate bonds, RMBS, consumer loans, agency CMBS, ~~ABS,~~ and tax-exempt municipal bonds, while increasing holdings in U.S. treasuries and CLOs.

Commercial & Residential Real Estate

The following table presents the Company’s exposure to CMBS and RMBS by current credit quality included in the preceding Fixed Maturities, AFS by Type table.

Exposure to CMBS & RMBS Bonds as of March 31, 2021
AAA AA A BBB BB and Below Total
Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value
CMBS
   Agency [1] $ 1,573 $ 1,647 $ 4 $ 4 $ — $ — $ — $ — $ — $ — $ 1,577 $ 1,651
   Bonds 934 994 588 620 413 427 181 187 17 14 2,133 2,242
   Interest Only 165 169 89 91 7 7 6 6 2 1 269 274
Total CMBS 2,672 2,810 681 715 420 434 187 193 19 15 3,979 4,167
RMBS
   Agency 1,744 1,808 22 24 — — — — — — 1,766 1,832
   Non-Agency 1,008 1,027 406 411 367 368 52 52 — — 1,833 1,858
   Alt-A 2 2 — — — — 1 1 16 18 19 21
   Sub-Prime 14 14 45 46 95 97 56 58 96 99 306 314
Total RMBS 2,768 2,851 473 481 462 465 109 111 112 117 3,924 4,025
Total CMBS & RMBS $ 5,440 $ 5,661 $ 1,154 $ 1,196 $ 882 $ 899 $ 296 $ 304 $ 131 $ 132 $ 7,903 $ 8,192


Exposure to CMBS & RMBS Bonds as of September 30, 2021
	AAA				AA				A				BBB				BB and Below				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
CMBS
Agency [1]	$	1,485	$	1,572	$	4	$	4	$	—	$	—	$	—	$	—	$	—	$	—	$	1,489	$	1,576
Bonds	951		1,011		576		609		440		462		183		190		88		87		2,238		2,359
Interest Only	143		152		90		94		—		—		8		9		1		1		242		256
Total CMBS	2,579		2,735		670		707		440		462		191		199		89		88		3,969		4,191
RMBS
Agency	1,433		1,486		22		23		—		—		—		—		—		—		1,455		1,509
Non-Agency	576		589		458		461		376		374		114		113		14		14		1,538		1,551
Alt-A	1		1		—		—		—		—		—		—		14		15		15		16
Sub-Prime	8		8		34		35		71		73		28		29		63		65		204		210
Total RMBS	2,018		2,084		514		519		447		447		142		142		91		94		3,212		3,286
Total CMBS & RMBS	$	4,597	$	4,819	$	1,184	$	1,226	$	887	$	909	$	333	$	341	$	180	$	182	$	7,181	$	7,477

The Company also has exposure to commercial mortgage loans. These loans are collateralized by real estate properties that are diversified both geographically throughout the United States and by property type. These commercial loans are originated by the Company as high quality whole loans, and the Company may sell participation interests in one or more loans to third parties. A loan participation interest represents a pro-rata share in interest and principal payments generated by the participated loan, and the relationship between the Company as loan originator, lead participant and servicer and the third party as a participant are governed by a participation agreement.

As of ~~March 31,~~September 30, 2021, mortgage loans had an amortized cost of

~~$4.6~~ $5.1 billion and carrying value of ~~$4.6~~$5.1 billion, with an ACL of ~~$34.~~$26. As of December 31, 2020, mortgage loans had an amortized cost of $4.5 billion and carrying value of $4.5 billion, with an ACL of ~~$38 ACL.~~$38. The decrease in the allowance is primarily attributable to improved economic scenarios, ~~and higher property valuations as compared to the prior quarter.~~partially offset by

an increase driven by net additions of new loans.

The Company funded ~~$161~~$949 of commercial mortgage loans with a weighted average loan-to-value (“LTV”) ratio of ~~59%~~56% and a weighted average yield of ~~3.0%~~2.8% during the ~~three~~nine months ended ~~March 31,~~September 30, 2021. The Company continues to originate commercial mortgage loans in high growth markets across the country focusing primarily on institutional-quality industrial, retail, and ~~multi-~~

As of ~~both March 31,~~September 30, 2021, the largest issuer concentrations were the State of California, the New York City Municipal Water Finance Authority, and the Pennsylvania State Turnpike Commission, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds. As of December 31, 2020, the largest issuer concentrations were the New York State Dormitory Authority, the Commonwealth of Massachusetts, and the New York City Municipal Water Finance Authority, ~~and the Commonwealth of Massachusetts,~~ which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds. In total, municipal bonds make up ~~17%~~15% of the fair value of the Company's investment portfolio. While COVID-19 has had an impact on many municipal issuers, credit fundamentals in this sector have broadly stabilized due to an unprecedented influx of federal relief funds and a strong economic recovery in the ~~average credit quality~~second half of ~~the Company’s holdings is AA-,~~2020 and ~~the Company believes the issuers~~year-to-date in ~~which it invests have multiple levers to maintain the strength of their credit profile.~~2021.

Limited Partnerships and Other Alternative Investments

The following table presents the Company’s investments in limited partnerships and other alternative investments which include hedge funds, real estate funds, and private equity funds. Real estate funds consist of investments primarily in real estate

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

Income or losses on investments in limited partnerships and alternative investments are recognized on a lag as results from

private equity investments and other funds are generally reported on a three-month delay.

Fixed Maturities, AFS — Unrealized Loss Aging

The total gross unrealized losses were ~~$141~~$94 as of ~~March 31,~~September 30, 2021 and have increased ~~$78,~~$31, from December 31, 2020, primarily due to higher interest rates, partially offset by tighter credit spreads. As of ~~March 31,~~September 30, 2021, ~~$136~~$91 of the gross unrealized losses were associated with fixed maturities, AFS depressed less than 20% of amortized cost. The remaining $5$3 of gross unrealized losses were associated with fixed maturities, AFS depressed greater than 20%, primarily ~~relate~~related to commercial real estate securities that were purchased at tighter credit spreads.

As part of the Company’s ongoing investment monitoring process, the Company has reviewed its fixed maturities, AFS in an unrealized loss position and concluded that these fixed maturities are temporarily depressed and are expected to recover in value as the investments approach maturity or as market spreads tighten. For these fixed maturities in an unrealized loss position where an ACL has not been recorded, the Company’s best estimate of expected future cash flows are sufficient to recover the amortized cost basis of the investment. Furthermore, the Company neither has an intention to sell nor does it expect to be required to sell these Investments. For further information regarding the Company’s ACL analysis, see the Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments section below.

Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments

Three and nine months ended ~~March 31,~~September 30, 2021

~~The~~There were no changes to the ACL for the three months ended September 30, 2021. For the nine months ended September 30, 2021, the Company recorded a net ~~reversals of credit losses on fixed maturities, AFS~~decrease in the ACL of $4, ~~including reversals of $6 and additions of $2. The reversals were primarily attributable to~~driven by increases in the fair value of corporate issuers that had an ACL in prior periods, ~~primarily related to a large regional and commercial aircraft lessor. Additions relate to~~partially offset by new expected credit losses on a media/entertainment company. Unrealized losses on securities with an ACL recognized in other comprehensive income were ~~$0.~~less than $1 for both the three and nine months ended September 30, 2021. For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

There were no intent-to-sell impairments in the three and nine months ended ~~March 31,~~September 30, 2021.

The Company incorporates its best estimate of future performance using internal assumptions and judgments that are informed by economic and industry specific trends, as well as our expectations with respect to security specific developments.

Future intent-to-sell impairments or credit losses may develop as the result of changes in our intent to sell specific securities that are in an unrealized loss position or if modeling assumptions, such as macroeconomic factors or security specific developments, change unfavorably from our current modeling assumptions, resulting in lower cash flow expectations. For a discussion of impacts resulting from the COVID-19 pandemic, refer to the Impact of COVID-19 on our financial condition, results of operations and liquidity section of this MD&A.

Three and nine months ended ~~March 31,~~September 30, 2020

The Company recorded net credit losses on fixed maturities, AFS of ~~$12.~~$1 and $33, respectively, for the three and nine months ended September 30, 2020. The losses for the three months ended September 30, 2020, were primarily attributable to one tax-exempt municipal bond impacted by COVID-19, partially offset by increases in the fair value of securities that had an ACL recorded in prior periods. For the nine months ended September 30, 2020, net credit losses primarily include an increase in ACL for corporate fixed maturities, ~~primarily~~mainly one private regional and commercial aircraft lessor and one cruise line ~~issuer and, to a lesser extent, one private bank loan.~~issuer. Unrealized losses on securities with an ACL

recognized in other comprehensive income were ~~$1.~~$0 and $1 for the three and nine months ended September 30, 2020.

Intent-to-sell impairments ofwere $0 and $5 ~~were~~for the three and nine months ended September 30, 2020, respectively, with impairments in the nine month period primarily related to one corporate issuer in the energy sector and one issuer with exposure to India.

ACL on Mortgage Loans

Three and nine months ended ~~March 31,~~September 30, 2021

The Company reviews mortgage loans on a quarterly basis to estimate the ACL with changes in the ACL recorded in net realized ~~capital~~ gains and losses. Apart from an ACL recorded on individual mortgage loans where the borrower is experiencing financial difficulties, the Company records an ACL on the pool of mortgage loans based on lifetime expected credit losses. For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

~~The~~For the three and nine months ended September 30, 2021, the Company recorded ~~a decrease~~an increase (decrease) in the ACL on mortgage loans of ~~$4.~~ $2 and ($12), respectively. The increase in the allowance for the three months ended September 30, 2021, was driven by net additions of new loans. The decrease in the allowance for the nine months ended September 30, 2021, was primarily the result of improved economic scenarios, ~~and higher property valuations as compared to the prior quarter. The Company did not record an ACL on any individual mortgage loans.~~

~~Three months ended March 31, 2020~~

~~The Company recorded~~partially offset by an increase ~~in the ACL on mortgage loans~~driven by net additions of ~~$2. The increase was primarily due to volatility surrounding the COVID-19 pandemic and, to a lesser extent, newly originated mortgage~~new loans. The Company did not record an ACL on any individual mortgage loans.

Three and nine months ended September 30, 2020

For the three and nine months ended September 30, 2020, the Company recorded an increase (decrease) in the ACL on mortgage loans of ($5) and $19, respectively. The decrease in the allowance for the three months ended September 30, 2020, was the result of improved property valuations in certain industry sectors that have been less impacted by the COVID-19 pandemic and modestly improved economic forecasts. The increase in the allowance for the nine months ended September 30, 2020, was due to the effects of the COVID-19 pandemic and its impacts on the economic forecasts, as well as lower estimated property values and operating income. The Company did not record an ACL on any individual mortgage loans.

CAPITAL RESOURCES AND LIQUIDITY

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

funds at the ~~holding company~~Holding Company may be used to repurchase shares under the authorized share repurchase program at the discretion of management.

Under significant economic stress scenarios that could arise due to the COVID-19 pandemic, the Company has the ability to meet short-term cash requirements, if needed, by borrowing under its revolving credit facility or by having its insurance subsidiaries take collateralized advances under a facility with the Federal Home Loan Bank of Boston (“FHLBB”). The Company could also choose to have its insurance subsidiaries sell certain highly liquid, high quality fixed maturities or the Company could issue debt in the public markets under its shelf registration. ~~No borrowings or advances have occurred since the start of the COVID-19 pandemic.~~

During the second quarter, the Company ~~expects to make a contribution of approximately~~contributed €15 million ($18) to Navigators Holdings (Europe) N.V., a Belgium holding company.

~~Dividends~~Debt

On September 21, 2021, The Hartford issued $600 of 2.9% senior notes (“2.9% Notes”) due September 15, 2051 for net proceeds of approximately $588, after deducting underwriting discounts and expenses from the offering. Interest is payable semi-annually in arrears on March 15 and September 15, commencing March 15, 2022. The Hartford, at its option, can redeem the 2.9% Notes at any time, in whole or part, at a redemption price equal to the greater of 100% of the principal amount being redeemed or a make-whole amount based on a comparable maturity US Treasury plus 20 basis points, plus any accrued and unpaid interest, except the 2.9% Notes may be redeemed at par within six months of maturity. The Hartford intends to use the net proceeds along with other available resources to repay The Hartford's $600 7.875% junior subordinated debentures (“7.875% Notes”), which are redeemable at par on or after April 15, 2022. The Hartford expects to recognize a loss on extinguishment of debt of $9, before tax, on redemption.

For additional information on Debt, see Note 11 - Debt of Notes to Condensed Consolidated Financial Statements.

|DIVIDENDS

The Hartford's Board of Directors declared the following quarterly dividends since ~~January~~July 1, 2021:

Insurers domiciled in the United Kingdom may pay dividends to their parent out of their statutory profits subject to restrictions imposed under U.K. Company law and Solvency II. Belgium domiciled insurers may only pay dividends if, at the end of their previous fiscal year, the total amount of their assets, as reduced by its provisions and debts, are in excess of certain minimum capital thresholds calculated under Belgian law.

Through the first ~~three~~nine months of 2021, HFSG Holding Company received ~~$341~~approximately $1.1 billion of net dividends from its subsidiaries, including ~~$70~~$220 from HLA, ~~$41~~$121 from Hartford Funds and ~~$230~~$780 from its U.S. P&C subsidiaries, excluding ~~$50~~$100 of P&C dividends that were subsequently contributed to a P&C subsidiary and ~~$12~~$37 of P&C dividends related to interest payments on an intercompany note owed by Hartford Holdings, Inc. ("HHI") to Hartford Fire Insurance Company.

Over the remainder of 2021, the Company anticipates receiving approximately ~~$670 to $870~~$325 of net dividends from its U.S. P&C subsidiaries, ~~$180 to $225~~approximately $75 of dividends from HLA and ~~$110 to $140~~approximately $45 of dividends from Hartford Funds.

~~Other Sources of Capital for the~~|OTHER SOURCES OF CAPITAL FOR THE HFSG ~~Holding Company~~HOLDING COMPANY

The Hartford endeavors to maintain a capital structure that provides financial and operational flexibility to its insurance subsidiaries, ratings that support its competitive position in the financial services marketplace (see the "Ratings" section below for further discussion), and stockholder returns. As a result, the Company may from time to time raise capital from the issuance of debt, common equity, preferred stock, equity-related debt or other capital securities and is continuously evaluating strategic opportunities. The issuance of debt, common equity, equity-related debt or other capital securities could result in the dilution of stockholder interests or reduced net income to common shareholders due to additional interest ~~expense.~~expense or preferred stock dividends.

Shelf Registrations

The Hartford filed an automatic shelf registration statement with the Securities and Exchange Commission ("the SEC") on May 17, 2019 that permits it to offer and sell debt and equity securities during the three-year life of the registration statement.

For further information regarding Shelf Registrations, see Note 14 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2020 Form 10-K Annual Report.

|PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

The Company does not have a 2021 required minimum funding contribution for the U.S. qualified defined benefit pension plan and the funding requirements for all pension plans are expected to be immaterial. ~~The Company has not determined whether, and to what extent, contributions may be made to the U.S. qualified defined benefit pension plan in 2021. The Company will monitor~~Based on the funded status of the U.S. qualified defined benefit pension plan, ~~during~~the Company does not anticipate making a contribution to the plan in 2021 ~~to make this determination.~~.

~~Derivative Commitments~~|DERIVATIVE COMMITMENTS

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings, as set by nationally recognized statistical rating agencies, of the individual legal entity that entered into the derivative agreement. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could terminate agreements and demand ~~either~~ immediate ~~and ongoing full collateralization or immediate termination and~~ settlement of the outstanding net derivative positions transacted under each agreement. For further information, refer to Note 1213 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.

As of ~~March 31,~~September 30, 2021, no derivative positions would be subject to immediate termination in the event of a downgrade of one level below the current financial strength ratings. This could change as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated.

~~Insurance Operations~~|INSURANCE OPERATIONS

While subject to variability period to period, underwriting and investment cash flows continue to provide sufficient liquidity to meet anticipated demands over the next twelve months. For information about the impact of COVID-19 on the Company's cash flows see the Risk Factors disclosed in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2020. For a discussion and tabular presentation of the Company’s contractual obligations by period, refer to Off-Balance Sheet Arrangements and Aggregate Contractual Obligations within the Capital Resources and Liquidity section of the MD&A included in The Hartford’s 2020 Form 10-K Annual Report.

The principal sources of operating funds are premiums, fees earned from assets under management and investment income, while investing cash flows primarily originate from maturities and sales of invested assets. The primary uses of funds are to pay claims, claim adjustment expenses, commissions and other underwriting and insurance operating costs, to pay taxes, to

purchase new investments and to make dividend payments to the HFSG Holding Company.

The Company’s insurance operations consist of property and casualty insurance products (collectively referred to as “Property & Casualty Operations”) and Group Benefits. The Company's insurance operations hold fixed maturity securities including a significant short-term investment position (securities with maturities of one year or less at the time of purchase) to meet liquidity needs. Liquidity requirements that are unable to be funded by the Company's insurance operations' short-term investments would be satisfied with current operating funds, including premiums or investing cash flows, which includes

Total capitalization decreased ~~$853, or 4%,~~$103 as of ~~March 31,~~September 30, 2021 compared to December 31, 2020 primarily due to anshare repurchases in the period and a decrease in ~~AOCI.~~AOCI, partially offset by net income in excess of stockholder dividends and an increase in long-term debt due to the issuance of the 2.9% Notes.

For additional information on AOCI, net of tax, including unrealized ~~capital~~ gains from securities, see Note 1415 - Changes In and

~~and~~ Reclassifications From Accumulated Other Comprehensive Income (Loss) and Note 5 - Investments of Notes to Condensed Consolidated Financial Statements. For additional information on debt, see Note 14 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2020 Form 10-K Annual Report.

Cash provided by operating activities increased in 2021 as compared to the prior year period primarily driven by ~~a decline in P&C losses and expenses paid, and~~ lower operating expenses paid including lower payroll and employee related ~~expenditures.~~expenditures, greater cash distributions from limited partnerships, a decline in P&C losses and loss adjustment expenses paid, the impact of Personal Lines premium refunds in the 2020 period, and an increase in Commercial Lines premiums received. Positive cash flow impacts were partially offset by an increase in income taxes paid and an increase in Group Benefits ~~claims~~loss and loss adjustment expenses paid ~~due,~~ in ~~large part, to the~~

~~impact~~excess of ~~excess mortality in group life primarily caused by the direct and indirect impacts of COVID-19.~~premiums received.

Cash ~~provided by (used for)~~used for investing activities ~~decreased from net inflows~~increased in ~~2020~~2021 as compared to ~~net outflows in 2021~~the prior year as a result of a decrease from net proceeds to net payments for equity securities, ~~a change from net proceeds to net~~

Company's ability to access financing and its cost of borrowing. There can be no assurance that the Company’s ratings will continue for any given period of time, or that they will not be changed. In the event the Company’s ratings are downgraded, the Company’s competitive position, ability to access financing, and its cost of borrowing, may be adversely impacted.

On July 21, 2021, Moody's upgraded the insurance financial strength rating of HLA to A1 from A2. The upgrade reflects HLA’s leading market position in the group benefits and disability business, its distribution capabilities and consistent profitability, as well as implicit support from The Hartford.


Insurance Financial Strength Ratings as of ~~April 26,~~ October 27, 2021
	A.M. Best	Standard & Poor’s	Moody’s
Hartford Fire Insurance Company	A+	A+	A1
Hartford Life and Accident Insurance Company	A+	A+	A2A1
Navigators Insurance Company	A+	A	Not Rated




Other Ratings:
The Hartford Financial Services Group, Inc.:
Senior debt	a-	BBB+	Baa1

These ratings are not a recommendation to buy, sell or hold any of The Hartford's securities and they may be revised or revoked at any time at the sole discretion of the rating organization. Each agency's rating should be evaluated independently of any other agency's rating. The system and number of rating categories can vary across rating agencies.

Among other factors, rating agencies consider the level of statutory capital and surplus of our U.S. insurance subsidiaries as well as the level of a measure of GAAP capital held by the Company in determining the Company's financial strength and credit ratings. Rating agencies may implement changes to their capital formulas that have the effect of increasing the amount of capital we must hold in order to maintain our current ratings. See Risk Factors disclosed in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

~~Contingencies~~|CONTINGENCIES

Legal Proceedings

For a discussion regarding The Hartford’s legal proceedings, see the information contained in Note 1213 -Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements.

Legislative and Regulatory Developments

COVID-19 Global Pandemic

State and federal retroactive business interruption coverage and other insurance regulatory relief initiatives-

State and federal lawmakers are continuing to consider legislation and regulation

in response to COVID-19. There have been proposals to impose retroactive coverage of COVID-19 claims under existing business interruption coverage provisions. If such proposals were enacted, they could represent a material exposure for the Company. Further, some states have adopted, or are considering incorporating, a presumption that if certain workers become infected with COVID-19, such infection would constitute an occupational disease triggering workers’ compensation coverage. In addition, state insurance regulators, including California, New Jersey and New York, have encouraged (and in some cases required) insurers to offer immediate relief to policyholders including refunding and offering discounts for drivers, incorporating flexible payment solutions for families, individuals, and businesses, providing additional time to make payments, waiving insurance premium late fees, pausing cancellation of coverage for personal and commercial policies due to non-payment and policy expiration, and suspending

personal automobile exclusions for restaurant employees who are transitioning to meal delivery services using their personal automobile policy as coverage. The Hartford offered consumer financial relief including a 15 percent refund on policyholders’ April and May 2020 personal automobile insurance premiums, waived late payments fees for a period of time for business and personal insurance customers and temporarily suspended policy cancellations for policyholders of our Commercial Lines, Personal Lines and Group Benefits segments. As the COVID-19 global pandemic continues, regulators may require us to or we may elect to provide additional consumer and/or business financial relief.

We may also see this manifest in the review and approval of new rate filings, with regulators applying heightened scrutiny even when rate reductions are proposed. The duration and scope of such regulatory/Company actions are uncertain, and the impacts of such actions could adversely affect the Company’s insurance business.

Federal pandemic risk insurance- Congress is considering possible action for future pandemic risk insurance coverage through a risk sharing mechanism between insurers and the federal government. Timing for any Congressional action with respect to these efforts is uncertain at this time. If such a program were to be enacted, it could represent a significant obligation for the ~~company~~Company in terms of deductible and co-share obligations.

American Rescue Plan Act of 2021- On March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan. The comprehensive bill includes provisions on taxes, healthcare, ~~extends~~ unemployment benefits, direct payments, state and local funding and other issues. The American Rescue Plan also directed billions of dollars towards the Paycheck Protection Program ("PPP") and Targeted Economic Injury Disaster Loan Advance payments to support small businesses across the nation. Additionally, ~~the new~~this law directed $28.6 billion for the Restaurant Revitalization Fund for industry-focused grants. On March 30, 2021, President Biden signed the PPP Extension Act of 2021 which ~~sets~~set a new application deadline of May 31, 2021 allowing the Small Business Administration (SBA) to continue processing applications for up to 30 days past the May 31 deadline.

Federal emergency leave legislation- On March 18, 2020, the Families First Coronavirus Response Act ("FFCRA") was signed into law by the President, and was effective from April 1, 2020 to December 31, 2020. This legislation included a number of funding provisions and worker protections including mandated emergency paid sick leave and paid family and medical leave programs. For private employers with fewer than 500 employees, and most public employers, new programs were put in place to guarantee individuals 10 days of paid sick leave, and up to 10 weeks of paid family and medical leave to deal directly with COVID-19. Eligible employers have access to a tax credit to reimburse for costs related to the emergency leave programs. On December 27, 2020, the Consolidated Appropriations Act of 2021 was signed into law and included a bipartisan COVID-19 relief bill. Although the mandatory paid leave provisions from the FFCRA expired on December 31, 2020, the new law extended FFCRA tax credits through March 31, 2021, for covered employers that voluntarily ~~continue~~continued to offer paid leave under the

If enacted, the effect of the ~~plan’s costs,~~provisions of the Biden Administration proposed a series of tax changes including raising the corporate tax rate to 28%, eliminating subsidies and foreign tax credits for fossil fuel companies, championing a new 21% global minimum tax for multinational corporations, enacting a minimum tax on large corporations book income, and other tax changes to prevent U.S. corporations from inverting or claiming tax havens as their residence. The Biden Administration is set to release a second

proposal in the coming weeks to address “social infrastructure,” which could include expanding health insurance, climate change initiatives, education, and paid family and medical leave. The prospects for these proposals remain unclear, even when considering procedural devices that could be used to move the legislation through Congress. While changes to corporate taxation, including a higher corporate income tax rate, would adversely affect the Company, the impact of other provisionsBuild Back Better Agenda on the Company’s operations and ability to attract new business and retain existing customers is unclear.

Patient Protection and Affordable Care Act of 2010 (the "Affordable Care Act")

It is unclear whether the Administration, Congress or the courts will seek to reverse, amend or alter the ongoing operation of the Affordable Care Act ("ACA"). If such actions were to occur, they may have an impact on various aspects of our business, including our insurance businesses. It is unclear what an amended ACA would entail, and to what extent there may be a transition period for the phase out of the ACA. The impact to The Hartford as an employer would be consistent with other large employers. The Hartford’s core business does not involve the issuance of health insurance, and we have not observed any material impacts on the Company’s workers’ compensation business or group benefits business from the enactment of the ACA. We will continue to monitor the impact of the ACA and any reforms on consumer, broker and medical provider behavior for leading indicators of changes in medical costs or loss payments primarily on the Company's workers' compensation and disability liabilities.

US and International Tax Reform

At the end of 2017, the Tax Cuts and Jobs Act of 2017 ("TCJA") was enacted. The TCJA made significant reforms to the U.S. tax code. The major areas of interest to the Company included the reduction of the corporate tax rate from 35% to 21% and the repeal of the corporate alternative minimum tax ~~(AMT)~~("AMT") and the refunding of AMT credits. ~~The U.S. Treasury and IRS continue~~As Congress debates action on various spending initiatives, it is considering a variety of proposals to ~~develop guidance implementing TCJA, and Congress may consider additional technical corrections to~~fund the ~~law. In addition, President Biden has proposed to~~cost of the spending with certain revenue raising measures, including a possible increase in the corporate

tax rate and other changes to ~~28%~~taxes owed on income earned outside of the U.S. These and ~~revisit~~ other ~~aspects of TCJA. Tax~~tax proposals and regulatory initiatives ~~which~~that have been or are being considered by Congress and/or the U.S. Treasury Department could have a material effect on the Company and its insurance businesses. The nature and timing of any Congressional or regulatory action with respect to any such efforts is unclear. For additional information on risks to the Company related to TCJA and other tax proposals, see the risk factor entitled "Changes in federal or state tax laws could adversely affect our business, financial condition, results of operations and liquidity" under "Risk Factors" in Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2020.On October 8th, the Organization for Economic Cooperation and Development ("OECD") announced that 136 of 140 countries in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting had agreed to an updated final agreement to address tax challenges arising from the digitalization of the economy, including the implementation of a global minimum tax. Since this is dependent on each country implementing the convention through domestic legislation, it is unclear at this point how quickly or uniformly such implementation might occur.

IMPACT OF NEW ACCOUNTING STANDARDS

For a discussion of accounting standards, see Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in The Hartford’s 2020 Form 10-K Annual Report.

~~Evaluation of Disclosure Controls and Procedures~~EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The Company’s principal executive officer and its principal financial officer, based on their evaluation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) have concluded that the Company’s disclosure controls and procedures are effective for the purposes set forth in the definition thereof in Exchange Act Rule 13a-15(e) as of ~~March 31,~~September 30, 2021.

~~Changes in Internal Control Over Financial Reporting~~CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company's internal control over financial reporting that occurred during the Company's current fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that most employees of the Company and of our vendors have had to work from home during the COVID-19 pandemic though we will continue to assess the impact on the design and operating effectiveness of our internal controls.

For a discussion regarding The Hartford’s legal proceedings, see the information contained in Note 1213 -Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements.

Investing in The Hartford involves risk. In deciding whether to invest in The Hartford, you should carefully consider the risk factors disclosed in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended December 31, 2020, (collectively the "Company's Risk Factors" or individually, the "Company's Risk Factor"), which is incorporated herein by

reference, any of which could have a significant or material

adverse effect on the business, financial condition, operating results or liquidity of The Hartford. This information should be considered carefully together with the other information contained in this report and the other reports and materials filed by The Hartford with the SEC.

~~Purchases of Equity Securities by the Issuer~~PURCHASES OF EQUITY SECURITIES BY THE ISSUER

InThe most recent share repurchase authorization, effective until December 31, 2022, was approved in December 2020, ~~the Company announced a $1.5 billion share repurchase authorization~~was increased by the Board of Directors ~~which is effective~~ from ~~January 1, 2021 through December 31, 2022. In April 2021, the Company announced an increase in the share repurchase authorization~~$1.5 billion to $2.5 billion ~~that remains effective~~in April 2021 and then increased further to $3.0 billion in

~~until December 31, 2022.~~October 2021. During the period from ~~April~~October 1, 2021 to ~~April 26,~~October 27, 2021, the Company repurchased ~~0.4~~1.5 million shares for ~~$27.~~$108. The timing of any repurchase of shares under the remaining equity repurchase authorization is dependent upon several factors, including the market price of the Company's securities, the Company's capital position, consideration of the effect of any repurchases on the Company's financial strength or credit ratings, the Company's blackout periods, and other considerations.


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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	HIG	The New York Stock Exchange
6.10% Notes due October 1, 2041	HIG 41	The New York Stock Exchange
7.875% Fixed-to-Floating Rate Junior Subordinated Debentures due 2042	HGH	The New York Stock Exchange
Depositary Shares, Each Representing a 1/1,000th Interest in a Share of 6.000% Non-Cumulative Preferred Stock, Series G, par value $0.01 per share	HIG PR G	The New York Stock Exchange


Item	Item	Description	Page	Item	Description	Page
		Part I			Part I
1.	1.	FINANCIAL STATEMENTS		1.	FINANCIAL STATEMENTS
					REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	6
		REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	6		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020	7
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - FOR THE THREE MONTHS ENDED MARCH 31, 2021 & 2020	7		CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020	8
		CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - FOR THE THREE MONTHS ENDED MARCH 31, 2021 & 2020	8		CONDENSED CONSOLIDATED BALANCE SHEETS - AS OF SEPTEMBER 30, 2021 AND DECEMBER 31, 2020	9
		CONDENSED CONSOLIDATED BALANCE SHEETS - AS OF MARCH 31, 2021 AND DECEMBER 31, 2020	9		CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - FOR THE THREE AND NINE MONTHS ENDED SEP TEMBER 30, 2021 AND 2020	10
		CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - FOR THE THREE MONTHS ENDED MARCH 31, 2021 & 2020	10		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - FOR THE NINE MONTHS E N DED SEP TEMBER 30, 2021 AND 2020	11
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - FOR THE THREE MONTHS ENDED MARCH 31, 2021 & 2020	11		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	12
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	12		NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	12
		NOTE 1 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	12		NOTE 2 - EARNINGS PER COMMON SHARE	13
		NOTE 2 - EARNINGS PER SHARE	13		NOTE 3 - SEGMENT INFORMATION	13
		NOTE 3 - SEGMENT INFORMATION	13		NOTE 4 - FAIR VALUE MEASUREMENTS	15
		NOTE 4 - FAIR VALUE MEASUREMENTS	15		NOTE 5 - INVESTMENTS	24
		NOTE 5 - INVESTMENTS	23		NOTE 6 - DERIVATIVES	30
		NOTE 6 - DERIVATIVES	29		NOTE 7 - PREMIUMS RECEIVABLE AND AGENTS' BALANCES	36
		NOTE 7 - PREMIUMS RECEIVABLE AND AGENT S' BALANCES	34		NOTE 8 - REINSURANCE	38
		NOTE 8 - REINSURANCE	35		NOTE 9 - RESERVE FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES	40
		NOTE 9 - RESERVE FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES	38		NOTE 10 - RESERVE FOR FUTURE POLICY BENEFITS	44
		NOTE 10 - RESERVE FOR FUTURE POLICY BENEFITS	42		NOTE 1 1 - DE BT	44
		NOTE 11 - INCOME TAXES	42		NOTE 1 2 - INCOME TAXES	45
		NOTE 12 - COMMITMENTS AND CONTINGENCIES	42		NOTE 1 3 - COMMITMENTS AND CONTINGENCIES	46
		NOTE 13 - EQUITY	45		NOTE 1 4 - EQUITY	49
		NOTE 14 - A CCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	45		NOTE 1 5 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX	49
		NOTE 15 - EMPLOYEE BENEFIT PLANS	47		NOTE 1 6 - EMPLOYEE BENEFIT PLANS	51
		NOTE 16 - BUSINESS DISPOSITION	47		NOTE 1 7 - BUSINESS DISPOSITION	51
		NOTE 17 - RESTRUCTURING AND OTHER COSTS	48		NOTE 1 8 - RESTRUCTURING AND OTHER COSTS	52
2.	2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	49	2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	53
3.	3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	[a]	3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	[a]
4.	4.	CONTROLS AND PROCEDURES	103	4.	CONTROLS AND PROCEDURES	117
		PART II. OTHER INFORMATION			PART II. OTHER INFORMATION
1.	1.	LEGAL PROCEEDINGS	104	1.	LEGAL PROCEEDINGS	118
1A.	1A.	RISK FACTORS	104	1A.	RISK FACTORS	118
2.	2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	104	2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	118
6.	6.	EXHIBITS	104	6.	EXHIBITS	118
		EXHIBITS INDEX	105		EXHIBITS INDEX	119
		SIGNATURE	106		SIGNATURE	120


		Three Months Ended March 31,					Three Months Ended September 30,						Nine Months Ended September 30,
(in millions, except for per share data)	(in millions, except for per share data)	2021		2020				(in millions, except for per share data)	2021		2020			2021		2020
		(Unaudited)				(Unaudited)
Revenues	Revenues							Revenues
Earned premiums	Earned premiums	$	4,343	$	4,391			Earned premiums	$	4,565	$	4,347		$	13,368	$	12,972
Fee income	Fee income	355		320				Fee income	377		323			1,107		941
Net investment income	Net investment income	509		459				Net investment income	650		492			1,740		1,290
Net realized capital gains (losses)		80		(231)
Net realized gains (losses)								Net realized gains (losses)	70		6			297		(116)
Other revenues	Other revenues	12		17				Other revenues	24		3			62		108
Total revenues	Total revenues	5,299		4,956				Total revenues	5,686		5,171			16,574		15,195
Benefits, losses and expenses	Benefits, losses and expenses							Benefits, losses and expenses
Benefits, losses and loss adjustment expenses	Benefits, losses and loss adjustment expenses	3,350		2,916				Benefits, losses and loss adjustment expenses	3,420		2,962			9,556		8,725
Amortization of deferred policy acquisition costs ("DAC")	Amortization of deferred policy acquisition costs ("DAC")	416		437				Amortization of deferred policy acquisition costs ("DAC")	419		421			1,252		1,287
Insurance operating costs and other expenses	Insurance operating costs and other expenses	1,144		1,176				Insurance operating costs and other expenses	1,200		1,093			3,546		3,394

Interest expense	Interest expense	57		64				Interest expense	58		58			172		179
Amortization of other intangible assets	Amortization of other intangible assets	18		19				Amortization of other intangible assets	18		18			53		55
Restructuring and other costs	Restructuring and other costs	11		0				Restructuring and other costs	(12)		87			(1)		87
Total benefits, losses and expenses	Total benefits, losses and expenses	4,996		4,612				Total benefits, losses and expenses	5,103		4,639			14,578		13,727
Income before income taxes	Income before income taxes	303		344				Income before income taxes	583		532			1,996		1,468
Income tax expense	Income tax expense	54		71				Income tax expense	101		73			360		268

Net income	Net income	249		273				Net income	482		459			1,636		1,200
Preferred stock dividends	Preferred stock dividends	5		5				Preferred stock dividends	6		6			16		16
Net income available to common stockholders	Net income available to common stockholders	$	244	$	268			Net income available to common stockholders	$	476	$	453		$	1,620	$	1,184

Net income available to common stockholders per common share	Net income available to common stockholders per common share							Net income available to common stockholders per common share
Basic	Basic	$	0.68	$	0.75			Basic	$	1.38	$	1.26		$	4.60	$	3.30
Diluted	Diluted	$	0.67	$	0.74			Diluted	$	1.36	$	1.26		$	4.54	$	3.29


		Three Months Ended March 31,					Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	(in millions)	2021		2020				(in millions)	2021		2020			2021		2020
		(Unaudited)				(Unaudited)
Net income	Net income	$	249	$	273			Net income	$	482	$	459		$	1,636	$	1,200
Other comprehensive income (loss) ("OCI"):	Other comprehensive income (loss) ("OCI"):							Other comprehensive income (loss) ("OCI"):
Change in net unrealized gain on fixed maturities	Change in net unrealized gain on fixed maturities	(925)		(1,057)				Change in net unrealized gain on fixed maturities	(274)		376			(904)		747
Change in unrealized losses on fixed maturities for which an allowance for credit losses ("ACL") has been recorded	Change in unrealized losses on fixed maturities for which an allowance for credit losses ("ACL") has been recorded	0		1				Change in unrealized losses on fixed maturities for which an allowance for credit losses ("ACL") has been recorded	—		—			—		1

Change in net gain on cash flow hedging instruments	Change in net gain on cash flow hedging instruments	5		44				Change in net gain on cash flow hedging instruments	1		(17)			1		22
Change in foreign currency translation adjustments	Change in foreign currency translation adjustments	1		(8)				Change in foreign currency translation adjustments	(4)		6			(1)		(1)
Changes in pension and other postretirement plan adjustments	Changes in pension and other postretirement plan adjustments	13		11				Changes in pension and other postretirement plan adjustments	14		12			41		35
Other comprehensive loss, net of tax		(906)		(1,009)
Comprehensive loss		$	(657)	$	(736)
Other comprehensive income (loss), net of tax								Other comprehensive income (loss), net of tax	(263)		377			(863)		804
Comprehensive income								Comprehensive income	$	219	$	836		$	773	$	2,004


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


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


(in millions, except for share and per share data)	(in millions, except for share and per share data)	March 31, 2021		December 31, 2020		(in millions, except for share and per share data)	September 30, 2021		December 31, 2020
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Investments:	Investments:					Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost of $41,317 and $41,561, and ACL of $19 and $23)		$	43,607	$	45,035
Fixed maturities, available-for-sale ("AFS"), at fair value (amortized cost of $41,485 and $41,561, and ACL of $4 and $23)						Fixed maturities, available-for-sale ("AFS"), at fair value (amortized cost of $41,485 and $41,561, and ACL of $4 and $23)	$	43,942	$	45,035

Equity securities, at fair value	Equity securities, at fair value	1,632		1,438		Equity securities, at fair value	1,616		1,438
Mortgage loans (net of ACL of $34 and $38)		4,588		4,493
Mortgage loans (net of ACL of $26 and $38)						Mortgage loans (net of ACL of $26 and $38)	5,106		4,493
Limited partnerships and other alternative investments	Limited partnerships and other alternative investments	2,326		2,082		Limited partnerships and other alternative investments	2,961		2,082
Other investments	Other investments	207		201		Other investments	337		201
Short-term investments	Short-term investments	3,367		3,283		Short-term investments	3,612		3,283
Total investments	Total investments	55,727		56,532		Total investments	57,574		56,532
Cash	Cash	176		151		Cash	232		151
Restricted cash	Restricted cash	104		88		Restricted cash	165		88
Premiums receivable and agents' balances (net of ACL of $144 and $152)		4,487		4,268
Reinsurance recoverables (net of allowance for uncollectible reinsurance of $98 and $108)		6,083		6,011
Premiums receivable and agents' balances (net of ACL of $124 and $152)						Premiums receivable and agents' balances (net of ACL of $124 and $152)	4,598		4,268
Reinsurance recoverables (net of allowance for uncollectible reinsurance of $99 and $108)						Reinsurance recoverables (net of allowance for uncollectible reinsurance of $99 and $108)	6,247		6,011
Deferred policy acquisition costs	Deferred policy acquisition costs	827		789		Deferred policy acquisition costs	883		789
Deferred income taxes, net	Deferred income taxes, net	205		46		Deferred income taxes, net	209		46
Goodwill	Goodwill	1,911		1,911		Goodwill	1,911		1,911
Property and equipment, net	Property and equipment, net	1,092		1,122		Property and equipment, net	1,047		1,122
Other intangible assets, net	Other intangible assets, net	927		950		Other intangible assets, net	881		950
Other assets	Other assets	2,497		2,066		Other assets	2,376		2,066
Assets held for sale	Assets held for sale	165		177		Assets held for sale	167		177
Total assets	Total assets	$	74,201	$	74,111	Total assets	$	76,290	$	74,111
Liabilities	Liabilities					Liabilities
Unpaid losses and loss adjustment expenses	Unpaid losses and loss adjustment expenses	$	38,540	$	37,855	Unpaid losses and loss adjustment expenses	$	39,378	$	37,855
Reserve for future policy benefits	Reserve for future policy benefits	641		638		Reserve for future policy benefits	602		638
Other policyholder funds and benefits payable	Other policyholder funds and benefits payable	681		701		Other policyholder funds and benefits payable	685		701
Unearned premiums	Unearned premiums	6,958		6,629		Unearned premiums	7,268		6,629

Long-term debt	Long-term debt	4,353		4,352		Long-term debt	4,943		4,352
Other liabilities	Other liabilities	5,178		5,222		Other liabilities	5,401		5,222
Liabilities held for sale	Liabilities held for sale	148		158		Liabilities held for sale	151		158
Total liabilities	Total liabilities	56,499		55,555		Total liabilities	58,428		55,555
Commitments and Contingencies (Note 12)
Commitments and Contingencies (Note 13)						Commitments and Contingencies (Note 13)
Stockholders’ Equity	Stockholders’ Equity					Stockholders’ Equity
Preferred stock, $0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at March 31, 2021 and December 31, 2020, aggregate liquidation preference of $345		334		334
Common stock, $0.01 par value —1,500,000,000 shares authorized, 384,923,222 shares issued at March 31, 2021 and December 31, 2020		4		4
Preferred stock, $0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at September 30, 2021 and December 31, 2020, aggregate liquidation preference of $345						Preferred stock, $0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at September 30, 2021 and December 31, 2020, aggregate liquidation preference of $345	334		334
Common stock, $0.01 par value —1,500,000,000 shares authorized, 384,923,222 shares issued at September 30, 2021 and December 31, 2020						Common stock, $0.01 par value —1,500,000,000 shares authorized, 384,923,222 shares issued at September 30, 2021 and December 31, 2020	4		4
Additional paid-in capital	Additional paid-in capital	4,310		4,322		Additional paid-in capital	4,339		4,322
Retained earnings	Retained earnings	14,036		13,918		Retained earnings	15,169		13,918
Treasury stock, at cost 27,406,740 and 26,434,682 shares		(1,246)		(1,192)
Treasury stock, at cost 43,138,408 and 26,434,682 shares						Treasury stock, at cost 43,138,408 and 26,434,682 shares	(2,291)		(1,192)
Accumulated other comprehensive income, net of tax	Accumulated other comprehensive income, net of tax	264		1,170		Accumulated other comprehensive income, net of tax	307		1,170
Total stockholders’ equity	Total stockholders’ equity	17,702		18,556		Total stockholders’ equity	17,862		18,556
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	74,201	$	74,111	Total liabilities and stockholders’ equity	$	76,290	$	74,111


Computation of Basic and Diluted Earnings per Common Share	Computation of Basic and Diluted Earnings per Common Share					Computation of Basic and Diluted Earnings per Common Share
		Three Months Ended March 31,					Three Months Ended September 30,						Nine Months Ended September 30,
(In millions, except for per share data)	(In millions, except for per share data)	2021		2020				(In millions, except for per share data)	2021		2020			2021		2020
Earnings	Earnings							Earnings

Net income	Net income	$	249	$	273			Net income	$	482	$	459		$	1,636	$	1,200
Less: Preferred stock dividends	Less: Preferred stock dividends	5		5				Less: Preferred stock dividends	6		6			16		16

Net income available to common stockholders	Net income available to common stockholders	$	244	$	268			Net income available to common stockholders	$	476	$	453		$	1,620	$	1,184

Shares	Shares							Shares
Weighted average common shares outstanding, basic	Weighted average common shares outstanding, basic	358.2		358.5				Weighted average common shares outstanding, basic	345.6		358.3			352.5		358.3

Dilutive effect of stock-based awards under compensation plans	Dilutive effect of stock-based awards under compensation plans	4.0		2.6				Dilutive effect of stock-based awards under compensation plans	5.1		2.2			4.7		2.0
Weighted average common shares outstanding and dilutive potential common shares	Weighted average common shares outstanding and dilutive potential common shares	362.2		361.1				Weighted average common shares outstanding and dilutive potential common shares	350.7		360.5			357.2		360.3
Net income available to common stockholders per common share	Net income available to common stockholders per common share							Net income available to common stockholders per common share

Basic	Basic	$	0.68	$	0.75			Basic	$	1.38	$	1.26		$	4.60	$	3.30

Diluted	Diluted	$	0.67	$	0.74			Diluted	$	1.36	$	1.26		$	4.54	$	3.29


Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of March 31, 2021
Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of September 30, 2021										Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of September 30, 2021
		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets accounted for at fair value on a recurring basis	Assets accounted for at fair value on a recurring basis									Assets accounted for at fair value on a recurring basis
Fixed maturities, AFS	Fixed maturities, AFS									Fixed maturities, AFS
Asset backed securities ("ABS")	Asset backed securities ("ABS")	$	1,435	$	0	$	1,429	$	6	Asset backed securities ("ABS")	$	1,207	$	—	$	1,184	$	23
Collateralized loan obligations ("CLOs")	Collateralized loan obligations ("CLOs")	3,049		0		2,623		426		Collateralized loan obligations ("CLOs")	3,011		—		2,657		354
Commercial mortgage-backed securities ("CMBS")	Commercial mortgage-backed securities ("CMBS")	4,167		0		4,106		61		Commercial mortgage-backed securities ("CMBS")	4,191		—		4,090		101
Corporate	Corporate	19,495		0		18,551		944		Corporate	18,861		—		17,607		1,254
Foreign government/government agencies	Foreign government/government agencies	868		0		868		0		Foreign government/government agencies	953		—		948		5
Municipal	Municipal	9,214		0		9,214		0		Municipal	8,878		—		8,878		—
Residential mortgage-backed securities ("RMBS")	Residential mortgage-backed securities ("RMBS")	4,025		0		3,544		481		Residential mortgage-backed securities ("RMBS")	3,286		—		3,018		268
U.S. Treasuries	U.S. Treasuries	1,354		547		807		0		U.S. Treasuries	3,555		618		2,937		—
Total fixed maturities	Total fixed maturities	43,607		547		41,142		1,918		Total fixed maturities	43,942		618		41,319		2,005

Equity securities, at fair value	Equity securities, at fair value	1,632		1,022		540		70		Equity securities, at fair value	1,616		991		554		71
Derivative assets	Derivative assets									Derivative assets
Credit derivatives	Credit derivatives	21		0		21		0		Credit derivatives	1		—		1		—

Foreign exchange derivatives										Foreign exchange derivatives	1		—		1		—

Interest rate derivatives		1		0		1		0
Total derivative assets [1]	Total derivative assets [1]	22		0		22		0		Total derivative assets [1]	2		—		2		—
Fixed maturities, at fair value using the fair value option ("FVO") [2]										Fixed maturities, at fair value using the fair value option ("FVO") [2]	75		—		—		75
Short-term investments	Short-term investments	3,367		1,754		1,597		16		Short-term investments	3,612		1,941		1,648		23
Total assets accounted for at fair value on a recurring basis	Total assets accounted for at fair value on a recurring basis	$	48,628	$	3,323	$	43,301	$	2,004	Total assets accounted for at fair value on a recurring basis	$	49,247	$	3,550	$	43,523	$	2,174
Liabilities accounted for at fair value on a recurring basis	Liabilities accounted for at fair value on a recurring basis									Liabilities accounted for at fair value on a recurring basis
Derivative liabilities	Derivative liabilities									Derivative liabilities

Credit derivatives										Credit derivatives	$	5	$	—	$	5	$	—

Foreign exchange derivatives	Foreign exchange derivatives	$	(10)	$	0	$	(10)	$	0	Foreign exchange derivatives	2		—		2		—
Interest rate derivatives	Interest rate derivatives	(45)		0		(45)		0		Interest rate derivatives	(45)		—		(45)		—
Total derivative liabilities [2]		(55)		0		(55)		0
Total derivative liabilities [3]										Total derivative liabilities [3]	(38)		—		(38)		—

Total liabilities accounted for at fair value on a recurring basis	Total liabilities accounted for at fair value on a recurring basis	$	(55)	$	0	$	(55)	$	0	Total liabilities accounted for at fair value on a recurring basis	$	(38)	$	—	$	(38)	$	—


Valuation Inputs Used in Levels 2 and 3 Measurements for Securities and Derivatives
Level 2 Primary Observable Inputs		Level 3 Primary Unobservable Inputs
Fixed Maturity Investments
Structured securities (includes ABS, CLOs, CMBS and RMBS)
	• Benchmark yields and spreads • Monthly payment information • Collateral performance, which varies by vintage year and includes delinquency rates, loss severity rates and refinancing assumptions • Credit default swap indices Other inputs for ABS, CLOs and RMBS: • Estimate of future principal prepayments, derived from the characteristics of the underlying structure • Prepayment speeds previously experienced at the interest rate levels projected for the collateral		• Independent broker quotes • Credit spreads beyond observable curve • Interest rates beyond observable curve Other inputs for less liquid securities or those that trade less actively, including subprime RMBS: • Estimated cash flows • Credit spreads, which include illiquidity premium • Constant prepayment rates • Constant default rates • Loss severity
Corporates
	• Benchmark yields and spreads • Reported trades, bids, offers of the same or similar securities • Issuer spreads and credit default swap curves Other inputs for investment grade privately placed securities that utilize internal matrix pricing: • Credit spreads for public securities of similar quality, maturity, and sector, adjusted for non-public nature		• Independent broker quotes • Credit spreads beyond observable curve • Interest rates beyond observable curve Other inputs for below investment grade privately placed securities and private bank loans: • Credit spreads for public securities of similar quality, maturity, and sector, adjusted for non-public nature
U.S. Treasuries, Municipals, and Foreign government/government agencies
	• Benchmark yields and spreads • Issuer credit default swap curves • Political events in emerging market economies • Municipal Securities Rulemaking Board reported trades and material event notices • Issuer financial statements		• Credit spreads beyond observable curve • Interest rates beyond observable curve
Equity Securities
	• Quoted prices in markets that are not active		• For privately traded equity securities, internal discounted cash flow models utilizing earnings multiples or other cash flow assumptions that are not observable
Short-term Investments
	• Benchmark yields and spreads • Reported trades, bids, offers • Issuer spreads and credit default swap curves • Material event notices and new issue money market rates		• Independent broker quotes
Derivatives
Credit derivatives
	• Swap yield curve • Credit default swap curves		Not applicable
Foreign exchange derivatives
	• Swap yield curve • Currency spot and forward rates • Cross currency basis curves		Not applicable
Interest rate derivatives
	• Swap yield curve		Not applicable


Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the Three Months Ended March 31, 2021
				Total realized/unrealized gains (losses)
		Fair value as of January 1, 2021		Included in net income [1]		Included in OCI [2]		Purchases		Settlements		Sales		Transfers into Level 3 [3]		Transfers out of Level 3 [3]		Fair value as of March 31, 2021
Assets
Fixed Maturities, AFS
	ABS	$	0	$	0	$	0	$	6	$	0	$	0	$	0	$	0	$	6
	CLOs	360		0		0		140		(15)		0		0		(59)		426
	CMBS	77		0		0		1		(2)		0		0		(15)		61
	Corporate	881		5		(13)		73		(7)		(7)		48		(36)		944
	Foreign Govt./Govt. Agencies	6		0		0		0		0		(6)		0		0		0

	RMBS	381		0		(1)		151		(46)		(4)		0		0		481
Total Fixed Maturities, AFS		1,705		5		(14)		371		(70)		(17)		48		(110)		1,918
Equity Securities, at fair value		70		0		0		0		0		0		0		0		70
Short-term investments		30		0		0		0		(14)		0		0		0		16
Total Assets		$	1,805	$	5	$	(14)	$	371	$	(84)	$	(17)	$	48	$	(110)	$	2,004


Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the Three Months Ended September 30, 2021
				Total realized/unrealized gains (losses)
		Fair value as of June 30, 2021		Included in net income [1]		Included in OCI [2]		Purchases		Settlements		Sales		Transfers into Level 3 [3]		Transfers out of Level 3 [3]		Fair value as of September 30, 2021
Assets
Fixed maturities, AFS
	ABS	$	14	$	—	$	—	$	23	$	—	$	—	$	—	$	(14)	$	23
	CLOs	375		—		—		132		(34)		—		—		(119)		354
	CMBS	86		—		—		29		—		—		—		(14)		101
	Corporate	1,141		—		(7)		156		(29)		(1)		—		(6)		1,254
	Foreign Govt./Govt. Agencies	—		—		—		5		—		—		—		—		5

	RMBS	302		—		(1)		41		(45)		—		—		(29)		268
Total fixed maturities, AFS		1,918		—		(8)		386		(108)		(1)		—		(182)		2,005
Equity securities, at fair value		74		4		—		2		(9)		—		—		—		71
Fixed maturities, FVO [4]		—		—		—		75		—		—		—		—		75
Short-term investments		18		—		—		8		(3)		—		—		—		23
Total Assets		$	2,010	$	4	$	(8)	$	471	$	(120)	$	(1)	$	—	$	(182)	$	2,174


Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the Three Months Ended September 30, 2020
				Total realized/unrealized gains (losses)
		Fair value as of June 30, 2020		Included in net income [1]		Included in OCI [2]		Purchases		Settlements		Sales		Transfers into Level 3 [3]		Transfers out of Level 3 [3]		Fair value as of September 30, 2020
Assets
Fixed Maturities, AFS
	ABS	$	23	$	—	$	—	$	—	$	—	$	—	$	—	$	(23)	$	—
	CLOs	99		—		1		63		(3)		—		—		(19)		141
	CMBS	20		—		2		66		(1)		—		5		—		92
	Corporate	1,109		1		19		45		(62)		—		22		(138)		996

	Municipal	—		(3)		2		—		—		—		7		—		6
	RMBS	479		—		2		40		(48)		—		—		(22)		451
Total Fixed Maturities, AFS		1,730		(2)		26		214		(114)		—		34		(202)		1,686
Equity Securities, at fair value		66		—		—		3		—		—		—		—		69
Short-term investments		14		—		—		—		—		—		—		—		14




Total Assets		$	1,810	$	(2)	$	26	$	217	$	(114)	$	—	$	34	$	(202)	$	1,769


Changes in Unrealized Gains (Losses) for Financial Instruments Classified as Level 3 Still Held at End of Period	Changes in Unrealized Gains (Losses) for Financial Instruments Classified as Level 3 Still Held at End of Period										Changes in Unrealized Gains (Losses) for Financial Instruments Classified as Level 3 Still Held at End of Period
			Three Months Ended March 31,									Three Months Ended September 30,								Nine Months Ended September 30,
			2021		2020		2021		2020							2021		2020		2021		2020		2021		2020		2021		2020
			Changes in Unrealized Gain/(Loss) included in Net Income [1] [2]				Changes in Unrealized Gain/(Loss) included in OCI [3]						Changes in Unrealized Gain/(Loss) included in Net Income [1] [2]			Changes in Unrealized Gain/(Loss) included in OCI [3]						Changes in Unrealized Gain/(Loss) included in Net Income [1] [2]		Changes in Unrealized Gain/(Loss) included in OCI [3]
Assets	Assets													Assets
Fixed Maturities, AFS	Fixed Maturities, AFS													Fixed Maturities, AFS
		ABS	$	0	$	0	$	0	$	(1)
		CLOs	0		0		0		(6)						CLOs	$	—	$	—	$	—	$	1	$	—	$	—	$	—	$	(1)
															CMBS	—		—		—		2		—		—		2		2
		Corporate	5		0		(13)		(79)						Corporate	—		(1)		(7)		17		—		(21)		(16)		1

															Municipal	—		(3)		—		2		—		(3)		—		2
		RMBS	0		0		(1)		(24)						RMBS	—		—		(1)		2		—		—		(3)		(9)
Total Fixed Maturities, AFS	Total Fixed Maturities, AFS		5		0		(14)		(110)					Total Fixed Maturities, AFS		—		(4)		(8)		24		—		(24)		(17)		(5)
Equity Securities, at fair value	Equity Securities, at fair value		0		(6)		0		0					Equity Securities, at fair value		1		—		—		—		4		(9)		—		—

Total Assets	Total Assets		$	5	$	(6)	$	(14)	$	(110)				Total Assets		$	1	$	(4)	$	(8)	$	24	$	4	$	(33)	$	(17)	$	(5)
Liabilities	Liabilities													Liabilities
Contingent Consideration	Contingent Consideration		$	0	$	12	$	0	$	0				Contingent Consideration		$	—	$	—	$	—	$	—	$	—	$	12	$	—	$	—

Total Liabilities	Total Liabilities		$	0	$	12	$	0	$	0				Total Liabilities		$	—	$	—	$	—	$	—	$	—	$	12	$	—	$	—


ACL on Fixed Maturities, AFS by Type
	Three Months Ended September 30,										Nine Months Ended September 30,
	2021				2020						2021				2020
(Before tax)	Corporate		Total		Corporate		Municipal		Total		Corporate		Total		Corporate		Municipal		Total
Balance as of beginning of period	$	4	$	4	$	32	$	—	$	32	$	23	$	23	$	—	$	—	$	—
Credit losses on fixed maturities where an allowance was not previously recorded	—		—		—		3		3		2		2		35		3		38

Reduction due to sales	—		—		(1)		—		(1)		(15)		(15)		(3)		—		(3)

Net increases (decreases) on fixed maturities where an allowance was previously recorded	—		—		(2)		—		(2)		(6)		(6)		(3)		—		(3)


Balance as of end of period	$	4	$	4	$	29	$	3	$	32	$	4	$	4	$	29	$	3	$	32


ACL on Fixed Maturities, AFS by Type
	Three Months Ended March 31, 2021				Three Months Ended March 31, 2020
(Before tax)	Corporate		Total			Corporate		Total
Balance as of beginning of period	$	23	$	23		$	0	$	0
Credit losses on fixed maturities where an allowance was not previously recorded	2		2			12		12



Net increases (decreases) on fixed maturities where an allowance was previously recorded	(6)		(6)			0		0


Balance as of end of period	$	19	$	19		$	12	$	12


Fixed Maturities, AFS, by Type
	September 30, 2021										December 31, 2020
	Amortized Cost		ACL		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value			Amortized Cost		ACL		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
ABS	$	1,187	$	—	$	20	$	—	$	1,207		$	1,525	$	—	$	39	$	—	$	1,564
CLOs	3,002		—		10		(1)		3,011			2,780		—		7		(7)		2,780
CMBS	3,969		—		231		(9)		4,191			4,219		—		286		(21)		4,484
Corporate	17,597		(4)		1,310		(42)		18,861			18,401		(23)		1,926		(31)		20,273
Foreign govt./govt. agencies	916		—		40		(3)		953			842		—		77		—		919
Municipal	8,113		—		776		(11)		8,878			8,564		—		940		(1)		9,503
RMBS	3,212		—		85		(11)		3,286			3,966		—		144		(3)		4,107
U.S. Treasuries	3,489		—		83		(17)		3,555			1,264		—		141		—		1,405
Total fixed maturities, AFS	$	41,485	$	(4)	$	2,555	$	(94)	$	43,942		$	41,561	$	(23)	$	3,560	$	(63)	$	45,035


Fixed Maturities, AFS, by Contractual Maturity Year	Fixed Maturities, AFS, by Contractual Maturity Year									Fixed Maturities, AFS, by Contractual Maturity Year
		March 31, 2021				December 31, 2020					September 30, 2021				December 31, 2020
		Amortized Cost		Fair Value		Amortized Cost		Fair Value			Amortized Cost		Fair Value		Amortized Cost		Fair Value
One year or less	One year or less	$	1,394	$	1,411	$	1,411	$	1,432	One year or less	$	1,319	$	1,340	$	1,411	$	1,432
Over one year through five years	Over one year through five years	7,706		8,108		7,832		8,286		Over one year through five years	8,214		8,577		7,832		8,286
Over five years through ten years	Over five years through ten years	7,755		8,158		7,622		8,354		Over five years through ten years	9,088		9,520		7,622		8,354
Over ten years	Over ten years	12,114		13,254		12,206		14,028		Over ten years	11,494		12,810		12,206		14,028
Subtotal	Subtotal	28,969		30,931		29,071		32,100		Subtotal	30,115		32,247		29,071		32,100
Mortgage-backed and asset-backed securities	Mortgage-backed and asset-backed securities	12,348		12,676		12,490		12,935		Mortgage-backed and asset-backed securities	11,370		11,695		12,490		12,935
Total fixed maturities, AFS	Total fixed maturities, AFS	$	41,317	$	43,607	$	41,561	$	45,035	Total fixed maturities, AFS	$	41,485	$	43,942	$	41,561	$	45,035


Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of March 31, 2021
Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of September 30, 2021														Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of September 30, 2021
		Less Than 12 Months				12 Months or More				Total					Less Than 12 Months				12 Months or More				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
ABS	ABS	$	99	$	0	$	0	$	0	$	99	$	0	ABS	$	204	$	—	$	—	$	—	$	204	$	—
CLOs	CLOs	278		0		458		(1)		736		(1)		CLOs	842		(1)		159		—		1,001		(1)
CMBS	CMBS	360		(8)		127		(10)		487		(18)		CMBS	298		(3)		87		(6)		385		(9)
Corporate	Corporate	2,451		(72)		300		(15)		2,751		(87)		Corporate	2,229		(34)		208		(8)		2,437		(42)
Foreign govt./govt. agencies	Foreign govt./govt. agencies	173		(4)		0		0		173		(4)		Foreign govt./govt. agencies	265		(3)		—		—		265		(3)
Municipal	Municipal	796		(19)		0		0		796		(19)		Municipal	695		(11)		12		—		707		(11)
RMBS	RMBS	953		(9)		13		0		966		(9)		RMBS	880		(8)		100		(3)		980		(11)
U.S. Treasuries	U.S. Treasuries	560		(3)		0		0		560		(3)		U.S. Treasuries	2,707		(17)		3		—		2,710		(17)
Total fixed maturities, AFS in an unrealized loss position	Total fixed maturities, AFS in an unrealized loss position	$	5,670	$	(115)	$	898	$	(26)	$	6,568	$	(141)	Total fixed maturities, AFS in an unrealized loss position	$	8,120	$	(77)	$	569	$	(17)	$	8,689	$	(94)


Mortgage Loans LTV & DSCR by Origination Year as of March 31, 2021
	2021			2020			2019			2018			2017			2016 & Prior			Total
Loan-to-value	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost		Avg. DSCR	Amortized Cost [1]		Avg. DSCR

65% - 80%	$	26	2.28x	$	57	2.12x	$	223	1.59x	$	210	1.32x	$	45	1.83x	$	166	1.57x	$	727	1.59x
Less than 65%	149		2.62x	637		2.71x	695		2.74x	410		2.16x	423		1.88x	1,581		2.53x	3,895		2.49x
Total mortgage loans	$	175	2.57x	$	694	2.66x	$	918	2.46x	$	620	1.87x	$	468	1.88x	$	1,747	2.44x	$	4,622	2.35x


Mortgage Loans by Property Type
	March 31, 2021				December 31, 2020
	Amortized Cost		Percent of Total		Amortized Cost		Percent of Total
Commercial

Industrial	$	1,472	31.8	%	$	1,339	29.5	%

Multifamily	1,499		32.4	%	1,498		33.1	%
Office	712		15.4	%	774		17.1	%
Retail	807		17.5	%	788		17.4	%
Single Family	92		2.0	%	92		2.0	%
Other	40		0.9	%	40		0.9	%
Total mortgage loans	4,622		100.0	%	4,531		100.0	%
ACL	(34)				(38)
Total mortgage loans, net of ACL	$	4,588			$	4,493


Derivative Balance Sheet Presentation
	Net Derivatives								Asset Derivatives				Liability Derivatives
	Notional Amount				Fair Value				Fair Value				Fair Value
Hedge Designation/ Derivative Type	Mar. 31, 2021		Dec. 31, 2020		Mar. 31, 2021		Dec. 31, 2020		Mar. 31, 2021		Dec. 31, 2020		Mar. 31, 2021		Dec. 31, 2020
Cash flow hedges
Interest rate swaps	$	2,340	$	2,340	$	0	$	0	$	0	$	0	$	0	$	0
Foreign currency swaps	297		286		(10)		(13)		3		3		(13)		(16)
Total cash flow hedges	2,637		2,626		(10)		(13)		3		3		(13)		(16)
Non-qualifying strategies
Interest rate contracts
Interest rate swaps and futures	7,926		8,335		(44)		(69)		4		4		(48)		(73)
Foreign exchange contracts
Foreign currency swaps and forwards	269		269		0		0		0		0		0		0
Credit contracts
Credit derivatives that purchase credit protection	6		6		0		0		0		0		0		0
Credit derivatives that assume credit risk [1]	675		675		21		21		21		21		0		0
Credit derivatives in offsetting positions	216		218		0		0		5		5		(5)		(5)


Total non-qualifying strategies	9,092		9,503		(23)		(48)		30		30		(53)		(78)
Total cash flow hedges and non-qualifying strategies	$	11,729	$	12,129	$	(33)	$	(61)	$	33	$	33	$	(66)	$	(94)
Balance Sheet Location
Fixed maturities, available-for-sale	$	269	$	269	$	0	$	0	$	0	$	0	$	0	$	0
Other investments	9,657		9,585		22		23		24		25		(2)		(2)
Other liabilities	1,803		2,275		(55)		(84)		9		8		(64)		(92)
Total derivatives	$	11,729	$	12,129	$	(33)	$	(61)	$	33	$	33	$	(66)	$	(94)


Offsetting Derivative Assets and Liabilities
	(i)		(ii)		(iii) = (i) - (ii)				(iv)		(v) = (iii) - (iv)
					Net Amounts Presented in the Statement of Financial Position				Collateral Disallowed for Offset in the Statement of Financial Position
	Gross Amounts of Recognized Assets (Liabilities)		Gross Amounts Offset in the Statement of Financial Position		Derivative Assets [1] (Liabilities) [2]		Accrued Interest and Cash Collateral (Received) [3] Pledged [2]		Financial Collateral (Received) Pledged [4]		Net Amount
As of March 31, 2021
Other investments	$	33	$	30	$	22	$	(19)	$	1	$	2
Other liabilities	$	(66)	$	(4)	$	(55)	$	(7)	$	(57)	$	(5)
As of December 31, 2020
Other investments	$	33	$	31	$	23	$	(21)	$	1	$	1
Other liabilities	$	(94)	$	(6)	$	(84)	$	(4)	$	(83)	$	(5)


Gain (Loss) Recognized in OCI	Gain (Loss) Recognized in OCI		Gain (Loss) Recognized in OCI
		Three Months Ended March 31,					Three Months Ended September 30,		Nine Months Ended September 30,
			2021		2020				2021		2020		2021		2020
Interest rate swaps	Interest rate swaps		$	10	$	32		Interest rate swaps	$	2	$	—	$	8	$	36
Foreign currency swaps	Foreign currency swaps		4		28			Foreign currency swaps	8		(12)		19		12
Total	Total		$	14	$	60		Total	$	10	$	(12)	$	27	$	48


Gain (Loss) Reclassified from AOCI into Income
Gain (Loss) Reclassified from AOCI into Income for the Three Months Ended															Gain (Loss) Reclassified from AOCI into Income for the Three Months Ended
		Three Months Ended March 31,
		2021						2020						September 30, 2021		September 30, 2020
		Net Realized Capital Gain/(Loss)		Net Investment Income		Interest Expense		Net Realized Capital Gain/(Loss)		Net Investment Income		Interest Expense				Net Realized Gain/(Loss)		Net Investment Income		Interest Expense		Net Realized Gain/(Loss)		Net Investment Income		Interest Expense
Interest rate swaps	Interest rate swaps	$	0	$	10	$	(2)	$	0	$	3	$	0		Interest rate swaps	$	—	$	11	$	(3)	$	—	$	9	$	(2)
Foreign currency swaps	Foreign currency swaps	0		1		0		0		1		0			Foreign currency swaps	—		1		—		1		1		—
Total	Total	$	0	$	11	$	(2)	$	0	$	4	$	0		Total	$	—	$	12	$	(3)	$	1	$	10	$	(2)

Total amounts presented on the Condensed Consolidated Statement of Operations	Total amounts presented on the Condensed Consolidated Statement of Operations	$	80	$	509	$	57	$	(231)	$	459	$	64		Total amounts presented on the Condensed Consolidated Statement of Operations	$	70	$	650	$	58	$	6	$	492	$	58


Non-Qualifying Strategies Recognized within Net Realized Gains (Losses)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020






Foreign exchange contracts
Foreign currency swaps and forwards	$	1	$	—	$	1	$	3



Interest rate contracts
Interest rate swaps, swaptions, and futures	9		—		9		21
Credit contracts
Credit derivatives that purchase credit protection	—		(1)		—		3
Credit derivatives that assume credit risk	—		(1)		6		(5)
Equity contracts
Equity index swaps and options	—		—		—		75




Total	$	10	$	(2)	$	16	$	97

																									Credit Risk Assumed Derivatives by Type
							Underlying Referenced Credit Obligation(s) [1]												Underlying Referenced Credit Obligation(s) [1]
		Notional Amount [2]		Fair Value		Weighted Average Years to Maturity	Type	Average Credit Rating	Offsetting Notional Amount [3]		Offsetting Fair Value [3]			Notional Amount [2]		Fair Value		Weighted Average Years to Maturity	Type	Average Credit Rating	Offsetting Notional Amount [3]		Offsetting Fair Value [3]
As of March 31, 2021
Single name credit default swaps
Investment grade risk exposure		$	100	$	2	5 years	Corporate Credit	A	$	0	$	0
As of September 30, 2021													As of September 30, 2021

Basket credit default swaps [4]	Basket credit default swaps [4]												Basket credit default swaps [4]
Investment grade risk exposure		500		12		5 years	Corporate Credit	BBB+	0		0

Below investment grade risk exposure	Below investment grade risk exposure	75		7		5 years	Corporate Credit	B+	0		0		Below investment grade risk exposure	$	75	$	7	5 years	Corporate Credit	B+	$	—	$	—
Investment grade risk exposure	Investment grade risk exposure	100		1		7 years	CMBS Credit	AAA	100		(1)		Investment grade risk exposure	100		1		7 years	CMBS Credit	AAA	100		(1)
Below investment grade risk exposure	Below investment grade risk exposure	8		(4)		Less than 1 year	CMBS Credit	CCC+	8		4		Below investment grade risk exposure	6		(3)		Less than 1 year	CMBS Credit	CCC+	6		3
Total [5]		$	783	$	18				$	108	$	3
Total													Total	$	181	$	5				$	106	$	2
As of December 31, 2020	As of December 31, 2020												As of December 31, 2020
Single name credit default swaps	Single name credit default swaps												Single name credit default swaps
Investment grade risk exposure	Investment grade risk exposure	$	175	$	9	5 years	Corporate Credit	A-	$	0	$	0	Investment grade risk exposure	$	175	$	9	5 years	Corporate Credit	A-	$	—	$	—
Basket credit default swaps [4]	Basket credit default swaps [4]												Basket credit default swaps [4]
Investment grade risk exposure	Investment grade risk exposure	500		12		5 years	Corporate Credit	BBB+	0		0		Investment grade risk exposure	500		12		5 years	Corporate Credit	BBB+	—		—

Investment grade risk exposure	Investment grade risk exposure	100		1		8 years	CMBS Credit	AAA	100		(1)		Investment grade risk exposure	100		1		8 years	CMBS Credit	AAA	100		(1)
Below investment grade risk exposure	Below investment grade risk exposure	9		(4)		Less than 1 year	CMBS Credit	CCC+	9		4		Below investment grade risk exposure	9		(4)		Less than 1 year	CMBS Credit	CCC+	9		4
Total [5]		$	784	$	18				$	109	$	3
Total													Total	$	784	$	18				$	109	$	3


~~Table of Contents~~						~~Note 7 - Premiums Receivable and Agents' Balances~~


Rollforward of ACL on Premiums Receivable and Agents' Balances
	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
	Premiums Receivable and Agents' Balances, Excluding Receivables for Loss within a Deductible and Retrospectively-Rated Policy Premiums		Receivables for Loss within a Deductible and Retrospectively-Rated Policy Premiums		Total		Premiums Receivable and Agents' Balances, Excluding Receivables for Loss within a Deductible and Retrospectively-Rated Policy Premiums		Receivables for Loss within a Deductible and Retrospectively-Rated Policy Premiums		Total
Beginning ACL	$	117	$	35	$	152	$	85	$	60	$	145
Cumulative effect of accounting change [1]	0		0		0		(2)		(21)		(23)
Adjusted beginning ACL	117		35		152		83		39		122
Current period provision (release)	4		1		5		28		2		30

Current period gross write-offs	(15)		0		(15)		(15)		0		(15)
Current period gross recoveries	2		0		2		2		0		2
Ending ACL	$	108	$	36	$	144	$	98	$	41	$	139


Reinsurance Recoverables by Credit Quality Indicator	Reinsurance Recoverables by Credit Quality Indicator																	Reinsurance Recoverables by Credit Quality Indicator
		As of March 31, 2021								As of December 31, 2020									As of September 30, 2021								As of December 31, 2020
		Property and Casualty		Group Benefits		Corporate		Total		Property and Casualty		Group Benefits		Corporate		Total			Property and Casualty		Group Benefits		Corporate		Total		Property and Casualty		Group Benefits		Corporate		Total
A.M. Best Financial Strength Rating	A.M. Best Financial Strength Rating																	A.M. Best Financial Strength Rating
A++	A++	$	1,627	$	0	$	0	$	1,627	$	1,598	$	0	$	0	$	1,598	A++	$	1,728	$	—	$	—	$	1,728	$	1,598	$	—	$	—	$	1,598
A+	A+	1,823		240		306		2,369		1,788		230		305		2,323		A+	1,876		236		279		2,391		1,788		230		305		2,323
A	A	565		0		0		565		638		0		0		638		A	696		—		—		696		638		—		—		638
A-	A-	36		9		0		45		37		9		0		46		A-	29		9		—		38		37		9		—		46
B++	B++	658		0		3		661		666		0		3		669		B++	644		—		3		647		666		—		3		669
Below B++	Below B++	21		1		0		22		21		1		0		22		Below B++	21		1		—		22		21		1		—		22
Total Rated by A.M. Best	Total Rated by A.M. Best	4,730		250		309		5,289		4,748		240		308		5,296		Total Rated by A.M. Best	4,994		246		282		5,522		4,748		240		308		5,296
Mandatory (Assigned) and Voluntary Risk Pools	Mandatory (Assigned) and Voluntary Risk Pools	259		0		0		259		259		0		0		259		Mandatory (Assigned) and Voluntary Risk Pools	251		—		—		251		259		—		—		259
Captives	Captives	308		0		0		308		305		0		0		305		Captives	311		—		—		311		305		—		—		305
Other not rated companies	Other not rated companies	318		7		0		325		254		5		0		259		Other not rated companies	255		7		—		262		254		5		—		259
Gross Reinsurance Recoverables	Gross Reinsurance Recoverables	5,615		257		309		6,181		5,566		245		308		6,119		Gross Reinsurance Recoverables	5,811		253		282		6,346		5,566		245		308		6,119
Allowance for uncollectible reinsurance	Allowance for uncollectible reinsurance	(95)		(1)		(2)		(98)		(105)		(1)		(2)		(108)		Allowance for uncollectible reinsurance	(96)		(1)		(2)		(99)		(105)		(1)		(2)		(108)
Net Reinsurance Recoverables	Net Reinsurance Recoverables	$	5,520	$	256	$	307	$	6,083	$	5,461	$	244	$	306	$	6,011	Net Reinsurance Recoverables	$	5,715	$	252	$	280	$	6,247	$	5,461	$	244	$	306	$	6,011


Allowance for Uncollectible Reinsurance for the Three Months Ended
	September 30, 2021								September 30, 2020
	Property and Casualty		Group Benefits		Corporate		Total		Property and Casualty		Group Benefits		Corporate		Total
Beginning allowance for uncollectible reinsurance	$	96	$	1	$	2	$	99	$	108	$	1	$	2	$	111
Beginning allowance for disputed amounts	56		—		—		56		57		—		—		$	57
Beginning ACL	40		1		2		43		51		1		2		54


Current period provision (release)	1		—		—		1		1		—		—		1



Ending ACL	41		1		2		44		52		1		2		55
Ending allowance for disputed amounts	55		—		—		55		54		—		—		54
Ending allowance for uncollectible reinsurance	$	96	$	1	$	2	$	99	$	106	$	1	$	2	$	109


Table of Contents						Note 9 - Reserves for Unpaid Losses and Loss Adjustment Expenses


~~Table of Contents~~						~~Note 9 - Reserves for Unpaid Losses and Loss Adjustment Expenses~~


~~Table of Contents~~						~~Note 10 - Reserve for Future Policy Benefits~~