[GRAPHIC OMMITTED]
THE
HARTFORD
INVESTOR FINANCIAL SUPPLEMENT
DECEMBER 31, 2002
- OFC -
The Hartford
Hartford Plaza, HO-2-80
Hartford, Connecticut 06115
Hans Miller
Senior Vice President
Planning, Development and Investor Relations
Phone (860) 547-2751
This report is for information purposes only. It should be read in
conjunction with documents filed by The Hartford Financial Services Group,
Inc. with the Securities and Exchange Commission, including the most recent
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
- IFC -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
INVESTOR FINANCIAL SUPPLEMENT
CONTENTS
Basis of Presentation ................................. i-ii
CONSOLIDATED Consolidated Financial Results ........................ 1
Consolidating Income Statements and Financial Data
Fourth Quarter Ended December 31, 2002 and 2001 .... 2
Year Ended December 31, 2002 and 2001 .............. 3
Consolidating Balance Sheets
As of December 31, 2002 and 2001 ................... 4
Capital Structure ..................................... 5
Accumulated Other Comprehensive Income, net of tax .... 6
LIFE Operating Results ..................................... 8
Financial Highlights .................................. 9
Supplemental Data ..................................... 10
Investment Products
Income Statements
Individual Annuity ............................. 11
Other .......................................... 12
Supplemental Data
Sales/Other Deposits ........................... 13
Assets Under Management ........................ 14
Individual Annuity - Account Value Rollforward . 15
Other - Account Value and Asset Rollforward .... 16
Guaranteed Minimum Death Benefits .............. 17
Individual Life
Income Statements .................................. 18
LIFE Supplemental Data .................................. 19
(continued) Account Value Rollforward .......................... 20
Group Benefits
Income Statements .................................. 21
Supplemental Data .................................. 22
PROPERTY & Operating Results ..................................... 26
CASUALTY North American Underwriting Results
North American Underwriting Results and
Selected Financial Data ........................ 27
Business Insurance ................................. 28
Personal Lines ..................................... 29
Specialty Commercial ............................... 30
Reinsurance ........................................ 31
Other Operations ...................................... 32
INVESTMENTS General Account
Investment Earnings Before-tax
Fourth Quarter Ended December 31, 2002 and 2001 35
Year Ended December 31, 2002 and 2001 .......... 36
Composition of Invested Assets ..................... 37
Fixed Maturities by Type at Fair Value ............. 38
Fixed Maturities Asset Quality ..................... 39
Life General and Guaranteed Separate Account
Composition of Invested Assets ..................... 40
Fixed Maturities by Type at Fair Value ............. 41
Fixed Maturities Asset Quality ..................... 42
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
BASIS OF PRESENTATION
DEFINITIONS AND PRESENTATION
- ----------------------------
o All amounts are in millions, except for per share and ratio information.
o Operating income represents after-tax operational results excluding, as
applicable, net realized capital gains or losses, restructuring charges,
losses from early retirement of debt, the cumulative effect of accounting
changes and certain other items. Operating income is an internal
performance measure used by the Company in the management of its
operations. Management believes that this performance measure delineates
the results of operations of the Company's ongoing businesses in a manner
that allows for a better understanding of the underlying trends in the
Company's current business.
o Net income and net realized capital losses for the fourth quarter ended
December 31, 2002 include impairments on securities of $83, after-tax,
partially offset by net realized capital gains of $40, after-tax. Net
income and net realized capital losses for the year ended December 31,
2002 include impairments on securities of $373, after-tax, partially
offset by net realized capital gains of $123, after-tax.
o Restructuring charges of $11, after-tax, for the fourth quarter ended
December 31, 2001 are primarily related to the restructuring of HartRe's
international operations.
o Life debt as of December 31, 2002 reflects proceeds of $75 of previously
issued debt formerly allocated to Corporate.
o Trust preferred securities represent company obligated mandatorily
redeemable preferred securities of subsidiary trusts holding solely junior
subordinated debentures.
o Accumulated other comprehensive income ("AOCI") represents unrealized gain
(loss) on securities, net gain on cash-flow hedging instruments,
cumulative translation adjustments and minimum pension liability
adjustment, net of tax.
o Assets under management is an internal performance measure used by the
Company since a significant portion of the Company's revenue is based upon
asset values. Revenues increase or decrease with a rise or fall,
respectively, in the level of assets under management.
o Investment yield is calculated by dividing after-tax net investment income
by average invested assets at amortized cost.
o Property & Casualty includes North American and Other Operations. Other
Operations includes certain property and casualty insurance operations
which have discontinued writing new business, claims related to asbestos
and environmental exposures and Property & Casualty's International
businesses up until their dates of sale.
o Corporate includes primarily proceeds from third quarter 2002 debt and
equity issuances as well as amounts related to the June 2000 acquisition
of the minority interest in Hartford Life, Inc. ("HLI").
o Certain operating and statistical measures have been incorporated herein
to provide supplemental data that indicate trends in The Hartford's
current business. These measures include sales, account value rollforward,
inforce and written premium.
o The Hartford, along with others in the industry, uses underwriting ratios
as measures of performance. The loss ratio is the ratio of claims expense
(exclusive of claim adjustment expenses) to earned premiums. The loss
adjustment expense ratio represents the ratio of claim adjustment expenses
to earned premiums. The expense ratio is the ratio of underwriting
expenses (commissions; taxes, licenses and fees; as well as other
underwriting expenses) to written premiums. The policyholder dividend
ratio is the ratio of policyholder dividends to earned premiums. The
combined ratio is the sum of the loss ratio, the loss adjustment expense
ratio, the expense ratio and the policyholder dividend ratio. These ratios
are relative measurements that describe for every $100 of net premiums
earned or written, the cost of losses and statutory expenses,
respectively. The combined ratio presents the total cost per $100 of
premium production. A combined ratio below 100 demonstrates underwriting
profit; a combined ratio above 100 demonstrates underwriting loss. GAAP
combined ratios differ from statutory combined ratios primarily due to the
deferral and amortization of certain expenses for GAAP reporting purposes
and the use of written premiums in the expense ratio rather than earned
premiums.
o Certain reclassifications have been made to the prior periods to conform
to the December 31, 2002 presentation.
o NM - Not meaningful
- i -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
BASIS OF PRESENTATION
(continued)
ACQUISITIONS AND DISPOSITIONS
- -----------------------------
o On April 2, 2001, The Hartford completed the purchase of the individual
life insurance, annuity and mutual fund businesses of Fortis, Inc. for
$1.12 billion in cash. The acquisition was accounted for as a purchase
transaction and, as such, the revenues and expenses generated by this
business are included in the Company's operating results from April 2,
2001 forward.
ACCOUNTING CHANGES
- ------------------
o In the fourth quarter of 2002, The Hartford early adopted Statement of
Financial Accounting Standards ("SFAS") No. 145 "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of No. 13 and Technical
Corrections", retroactively and reclassified the 2001 extraordinary loss
from early retirement of debt of $13, before-tax, to other expenses.
However, the loss of $8 after-tax has been excluded from operating income.
o Effective January 1, 2002, The Hartford adopted SFAS No. 142, "Goodwill
and Other Intangible Assets," which eliminated the amortization of
goodwill and other intangibles with indefinite useful lives.
o In the second quarter of 2001, The Hartford adopted Emerging Issues Task
Force ("EITF") Issue 99-20, "Recognition of Interest Income and Impairment
on Purchased and Retained Beneficial Interests in Securitized Financial
Assets" and recorded an $(11) cumulative effect impact.
o In the first quarter of 2001, The Hartford adopted SFAS No. 133, as
amended, "Accounting for Derivative Instruments and Hedging Activities"
and recorded a $(23) cumulative effect impact. Included in The Hartford's
unrealized gain or loss on securities is the net deferred gain or loss on
derivative instruments qualifying as cash-flow hedges.
- ii -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
CONSOLIDATED FINANCIAL RESULTS
FOURTH QUARTER ENDED
DECEMBER 31,
---------------------------------------
2002 2001 CHANGE
----------- ---------- ---------
HIGHLIGHTS Net income [1] [2] $ 258 $ 144 79%
Operating income [1] [2] $ 301 $ 261 15%
Total revenues [3] $ 4,161 $ 3,856 8%
Total assets
Total assets under management [4]
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE Basic earnings per share [1] [2]
AND SHARES DATA Net income $ 1.01 $ 0.59 71%
Operating income $ 1.18 $ 1.07 10%
Diluted earnings per share [1] [2]
Net income $ 1.01 $ 0.58 74%
Operating income $ 1.17 $ 1.06 10%
Weighted average common shares outstanding 255.2 244.1 11.1
Weighted average common shares outstanding
and dilutive potential common shares 256.3 247.1 9.2
Common shares outstanding
Book value (including AOCI)
Book value (excluding AOCI)
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL RATIOS ROE (net income last 12 months-equity including AOCI) [1]
ROE (operating income last 12 months-equity excluding AOCI) [1]
Investment yield, after-tax
Debt (incl. Trust Preferred Securities) to capitalization incl. AOCI
North American Property & Casualty combined ratio [5] 99.4 104.6 5.2
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31,
-----------------------------------------
2002 2001 CHANGE
------------- ------------ ----------
HIGHLIGHTS Net income [1] [2] $ 1,000 $ 507 97%
Operating income [1] [2] $ 1,250 $ 724 73%
Total revenues [3] $ 15,907 $ 15,147 5%
Total assets $ 182,043 $ 181,593 -
Total assets under management [4] $ 198,676 $ 198,914 -
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE Basic earnings per share [1] [2]
AND SHARES DATA Net income $ 4.01 $ 2.13 88%
Operating income $ 5.01 $ 3.05 64%
Diluted earnings per share [1] [2]
Net income $ 3.97 $ 2.10 89%
Operating income $ 4.96 $ 3.00 65%
Weighted average common shares outstanding 249.4 237.7 11.7
Weighted average common shares outstanding
and dilutive potential common shares 251.8 241.4 10.4
Common shares outstanding 255.2 245.5 9.7
Book value (including AOCI) $ 42.06 $ 36.71 15%
Book value (excluding AOCI) $ 37.77 $ 34.54 9%
- --------------------------------------------------------------------------------------------------------------------------
FINANCIAL RATIOS ROE (net income last 12 months-equity including AOCI) [1] 10.1% 6.2% 3.9
ROE (operating income last 12 months-equity excluding AOCI) [1] 13.8% 9.3% 4.5
Investment yield, after-tax 4.3% 4.7% (0.4)
Debt (incl. Trust Preferred Securities) to capitalization incl. AOCI 29.0% 30.6% (1.7)
North American Property & Casualty combined ratio [5] 99.2 112.4 13.2
- ------------------------------------------------------------------------------------------------------------------------------
<FN>
[1] 2002 includes the earnings impacts of the $76 tax benefit in Life, the $11
after-tax expense in Life related to Bancorp Services, LLC litigation and
the $8 after-tax benefit in Life's September 11 Terrorist Attack exposure.
2001 includes $440 of after-tax losses related to the September 11
Terrorist Attack and the $130 tax benefit in Life.
[2] The fourth quarter and year ended December 31, 2001 includes after-tax
goodwill amortization of $14 and $52, respectively.
[3] Included in the quarter ended December 31, 2001 is additional premium of
$23, an adjustment for reinsurance cessions related to the September 11
Terrorist Attack. The year ended December 31, 2001 is net of $91 of
reinsurance cessions related to the September 11 Terrorist Attack.
[4] Includes $15,321 and $16,809 of mutual fund assets and $1,312 and $512 of
third party assets managed by HIMCO as of December 31, 2002 and 2001,
respectively.
[5] 2001 includes the impact of the September 11 Terrorist Attack. Excluding
the September 11 Terrorist Attack, NAP&C combined ratio was 103.4 for the
year ended December 31, 2001.
</FN>
- 1 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
CONSOLIDATING INCOME STATEMENTS AND FINANCIAL DATA
FOURTH QUARTER ENDED DECEMBER 31, 2002 AND 2001
LIFE PROPERTY & CASUALTY
-------------------------- --------------------------
2002 2001 CHANGE 2002 2001 CHANGE
---- ---- ------ ---- ---- ------
Earned premiums [1] $ 538 $ 543 (1%) $ 2,154 $ 1,912 13%
Fee income 616 691 (11%) - - -
Net investment income 498 459 8% 288 262 10%
Other revenues 29 32 (9%) 99 97 2%
Net realized capital losses (64) (66) 3% (3) (79) 96%
- -------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 1,617 1,659 (3%) 2,538 2,192 16%
Benefits, claims and claim adjustment expenses [2] 904 883 2% 1,555 1,444 8%
Amortization of deferred policy acquisition costs and
present value of future profits 142 170 (16%) 403 414 (3%)
Insurance operating costs and expenses 388 389 - 268 187 43%
Goodwill amortization - 8 (100%) - 1 (100%)
Other expenses 30 30 - 147 154 (5%)
- -------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 1,464 1,480 (1%) 2,373 2,200 8%
INCOME BEFORE INCOME TAXES 153 179 (15%) 165 (8) NM
Income tax expense (benefit) 28 44 (36%) 24 (33) NM
- -------------------------------------------------------------------------------------------------------------------
NET INCOME [3] 125 135 (7%) 141 25 NM
Restructuring charges, net of tax [4] - - - - (10) 100%
Loss from early retirement of debt, net of tax - - - - (8) 100%
Net realized capital losses, after-tax (42) (46) 9% (1) (52) 98%
- -------------------------------------------------------------------------------------------------------------------
OPERATING INCOME $ 167 $ 181 (8%) $ 142 $ 95 49%
- -------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Basic earnings per share
Net income
Operating income
Diluted earnings per share
Net income
Operating income
- -------------------------------------------------------------------------------------------------------------------
CORPORATE CONSOLIDATED
------------------------ --------------------------
2002 2001 CHANGE 2002 2001 CHANGE
---- ---- ------ ---- ---- ------
Earned premiums [1] $ - $ - - $ 2,692 $ 2,455 10%
Fee income - - - 616 691 (11%)
Net investment income 6 5 20% 792 726 9%
Other revenues - - - 128 129 (1%)
Net realized capital losses - - - (67) (145) 54%
- ----------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 6 5 20% 4,161 3,856 8%
Benefits, claims and claim adjustment expenses [2] 1 2 (50%) 2,460 2,329 6%
Amortization of deferred policy acquisition costs and
present value of future profits - - - 545 584 (7%)
Insurance operating costs and expenses - - - 656 576 14%
Goodwill amortization - 8 (100%) - 17 (100%)
Other expenses 17 15 13% 194 199 (3%)
- ----------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 18 25 (28%) 3,855 3,705 4%
INCOME BEFORE INCOME TAXES (12) (20) 40% 306 151 103%
Income tax expense (benefit) (4) (4) - 48 7 NM
- ----------------------------------------------------------------------------------------------------------------
NET INCOME [3] (8) (16) 50% 258 144 79%
Restructuring charges, net of tax [4] - (1) 100% - (11) 100%
Loss from early retirement of debt, net of tax - - - - (8) 100%
Net realized capital losses, after-tax - - - (43) (98) 56%
- ----------------------------------------------------------------------------------------------------------------
OPERATING INCOME $ (8) $ (15) 47% $ 301 $ 261 15%
- ----------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Basic earnings per share
Net income $ 1.01 $ 0.59 71%
Operating income $ 1.18 $ 1.07 10%
Diluted earnings per share
Net income $ 1.01 $ 0.58 74%
Operating income $ 1.17 $ 1.06 10%
- ----------------------------------------------------------------------------------------------------------------
<FN>
[1] For 2001, Property & Casualty includes additional premium of $23, which
was offset in benefits expense, representing an adjustment for reinsurance
cessions related to the September 11 Terrorist Attack.
[2] Before-tax catastrophes for Property & Casualty were $16 for 2002 and $10
for 2001.
[3] Includes after-tax catastrophes of $10 and $6 for the fourth quarter ended
December 31, 2002 and 2001, respectively. 2001 includes after-tax goodwill
amortization of $14 ($5, $1 and $8 for Life, Property & Casualty and
Corporate, respectively).
[4] Restructuring charges are primarily related to the restructuring of
HartRe's international operations.
</FN>
- 2 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
CONSOLIDATING INCOME STATEMENTS AND FINANCIAL DATA
YEAR ENDED DECEMBER 31, 2002 AND 2001
LIFE PROPERTY & CASUALTY
--------------------- ---------------------
2002 2001 CHANGE 2002 2001 CHANGE
---- ---- ------ ---- ---- ------
Earned premiums [1] $ 2,187 $ 2,142 2% $ 8,114 $7,267 12%
Fee income 2,577 2,633 (2%) - - -
Net investment income 1,858 1,779 4% 1,075 1,053 2%
Other revenues 120 128 (6%) 356 363 (2%)
Net realized capital losses (317) (133)(138%) (83) (103) 19%
- ----------------------------------------------------------------------------------------------------------
TOTAL REVENUES 6,425 6,549 (2%) 9,462 8,580 10%
Benefits, claims and claim adjustment expenses [2] [3] 3,648 3,611 1% 5,870 6,146 (4%)
Amortization of deferred policy acquisition costs and
present value of future profits 628 642 (2%) 1,613 1,572 3%
Insurance operating costs and expenses 1,438 1,390 3% 879 647 36%
Goodwill amortization - 24 (100%) - 3 (100%)
Other expenses 144 117 23% 559 560 -
- ----------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 5,858 5,784 1% 8,921 8,928 -
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 567 765 (26%) 541 (348) NM
Income tax expense (benefit) [4] 10 54 (81%) 72 (241) NM
- ----------------------------------------------------------------------------------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 557 711 (22%) 469 (107) NM
Cumulative effect of accounting change, net of tax - (26) 100% - (8) 100%
- ----------------------------------------------------------------------------------------------------------
NET INCOME [5] 557 685 (19%) 469 (115) NM
Restructuring charges, net of tax [6] - - - - (10) 100%
Loss from early retirement of debt, net of tax - - - - (8) 100%
Cumulative effect of accounting change, net of tax [7] - (26) 100% - (8) 100%
Net realized capital losses, after-tax (196) (89)(120%) (54) (75) 28%
- ----------------------------------------------------------------------------------------------------------
OPERATING INCOME $ 753 $ 800 (6%) $ 523 $ (14) NM
- ----------------------------------------------------------------------------------------------------------
PER SHARE DATA
Basic earnings per share
Net Income
Operating income
Diluted earnings per share
Net Income
Operating income
- ----------------------------------------------------------------------------------------------------------
CORPORATE CONSOLIDATED
---------------------- ----------------------
2002 2001 CHANGE 2002 2001 CHANGE
---- ---- ------ ---- ---- ------
Earned premiums [1] $ - $ - - $10,301 $9,409 9%
Fee income - - - 2,577 2,633 (2%)
Net investment income 20 18 11% 2,953 2,850 4%
Other revenues - - - 476 491 (3%)
Net realized capital losses - - - (400) (236) (69%)
- -------------------------------------------------------------------------------------------------------
TOTAL REVENUES 20 18 11% 15,907 15,147 5%
Benefits, claims and claim adjustment expenses [2] [3] 6 7 (14%) 9,524 9,764 (2%)
Amortization of deferred policy acquisition costs and
present value of future profits - - - 2,241 2,214 1%
Insurance operating costs and expenses - - - 2,317 2,037 14%
Goodwill amortization - 33 (100%) - 60 (100%)
Other expenses 54 54 - 757 731 4%
- -------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 60 94 (36%) 14,839 14,806 -
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (40) (76) 47% 1,068 341 NM
Income tax expense (benefit) [4] (14) (13) (8%) 68 (200) NM
- -------------------------------------------------------------------------------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (26) (63) 59% 1,000 541 85%
Cumulative effect of accounting change, net of tax - - - - (34) 100%
- -------------------------------------------------------------------------------------------------------
NET INCOME [5] (26) (63) 59% 1,000 507 97%
Restructuring charges, net of tax [6] - (1) 100% - (11) 100%
Loss from early retirement of debt, net of tax - - - - (8) 100%
Cumulative effect of accounting change, net of tax [7] - - - - (34) 100%
Net realized capital losses, after-tax - - - (250) (164) (52%)
- -------------------------------------------------------------------------------------------------------
OPERATING INCOME $ (26) $ (62) 58% $1,250 $ 724 73%
- -------------------------------------------------------------------------------------------------------
PER SHARE DATA
Basic earnings per share
Net Income $ 4.01 $ 2.13 88%
Operating income $ 5.01 $ 3.05 64%
Diluted earnings per share
Net Income $ 3.97 $ 2.10 89%
Operating income $ 4.96 $ 3.00 65%
- -------------------------------------------------------------------------------------------------------
<FN>
[1] For 2001, Property & Casualty is net of $91 of reinsurance cessions
related to the September 11 Terrorist Attack.
[2] Before-tax catastrophes for Property & Casualty were $108 for 2002 and
$124, excluding the September 11 Terrorist Attack, for 2001.
[3] For 2001, Life includes $31 and Property & Casualty includes $556 related
to the September 11 Terrorist Attack.
[4] For the years ended December 31, 2002 and 2001, Life includes $76 and
$130, respectively, of tax benefits primarily related to the favorable
treatment of certain tax matters arising during the 1996-2002 tax years.
[5] Includes after-tax catastrophes in Property & Casualty of $70 and $501
(including $420 related to the September 11 Terrorist Attack) for the year
ended December 31, 2002 and 2001, respectively. For 2002, includes $11
after-tax expense reflected in Life related to Bancorp Services LLC
litigation and $8 after-tax benefit related to favorable development on
Life's September 11 Terrorist Attack exposure. For 2001, includes
after-tax goodwill amortization of $52 ($16, $3 and $33 for Life, Property
& Casualty and Corporate, respectively).
[6] Restructuring charges are primarily related to the restructuring of
HartRe's international operations.
[7] For the year ended December 31, 2001, represents the cumulative impact of
the Company's adoption of EITF Issue 99-20 of $(11) and SFAS No. 133 of
$(23).
</FN>
- 3 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
CONSOLIDATING BALANCE SHEETS
LIFE PROPERTY & CASUALTY
------------------------------ ----------------------------
DEC. 31, DEC. 31,
---------------------- --------------------
2002 2001 CHANGE 2002 2001 CHANGE
---------- ---------- ------- --------- ---------- -------
Investments
Fixed maturities, available for sale, at fair value $ 29,377 $ 23,301 26% $19,446 $16,742 16%
Equity securities, available for sale, at fair value 458 428 7% 459 921 (50%)
Policy loans, at outstanding balance 2,934 3,317 (12%) - - -
Other investments 1,122 1,331 (16%) 668 646 3%
- -------------------------------------------------------------------------------------------------------------------------
Total investments 33,891 28,377 19% 20,573 18,309 12%
Cash 179 167 7% 198 186 6%
Premiums receivable and agents' balances 208 229 (9%) 2,403 2,561 (6%)
Reinsurance recoverables 796 648 23% 4,299 4,514 (5%)
Deferred policy acquisition costs and present
value of future profits 5,758 5,572 3% 930 847 10%
Deferred income tax (274) (16) NM 610 689 (11%)
Goodwill 796 796 - 153 153 -
Other assets 1,362 1,116 22% 2,031 1,928 5%
Separate account assets 107,078 114,720 (7%) - - -
- -------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 149,794 $151,609 (1%) $31,197 $29,187 7%
- -------------------------------------------------------------------------------------------------------------------------
Future policy benefits, unpaid claims and
claim adjustment expenses $ 9,521 $ 8,842 8% $17,159 $17,036 1%
Other policy funds and benefits payable 23,019 19,357 19% - - -
Unearned premiums 54 45 20% 3,942 3,399 16%
Debt 1,125 1,050 7% 1,164 999 17%
Trust preferred securities 450 450 - 1,023 968 6%
Other liabilities 2,858 2,535 13% 2,939 2,734 7%
Separate account liabilities 107,078 114,720 (7%) - - -
- -------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 144,105 146,999 (2%) 26,227 25,136 4%
- -------------------------------------------------------------------------------------------------------------------------
Equity x-AOCI, net of tax 4,980 4,414 13% 4,262 3,753 14%
AOCI, net of tax 709 196 NM 708 298 138%
- -------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 5,689 4,610 23% 4,970 4,051 23%
- -------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 149,794 $151,609 (1%) $31,197 $29,187 7%
- -------------------------------------------------------------------------------------------------------------------------
CORPORATE CONSOLIDATED
-------------------------- ------------------------------
DEC. 31, DEC. 31,
------------------ ---------------------
2002 2001 CHANGE 2002 2001 CHANGE
-------- --------- ------- ---------- ---------- -------
Investments
Fixed maturities, available for sale, at fair value $ 66 $ 3 NM $ 48,889 $ 40,046 22%
Equity securities, available for sale, at fair value - - - 917 1,349 (32%)
Policy loans, at outstanding balance - - - 2,934 3,317 (12%)
Other investments - - - 1,790 1,977 (9%)
- ----------------------------------------------------------------------------------------------------------------------
Total investments 66 3 NM 54,530 46,689 17%
Cash - - - 377 353 7%
Premiums receivable and agents' balances - - - 2,611 2,790 (6%)
Reinsurance recoverables - - - 5,095 5,162 (1%)
Deferred policy acquisition costs and present
value of future profits 1 1 - 6,689 6,420 4%
Deferred income tax 209 20 NM 545 693 (21%)
Goodwill 772 772 - 1,721 1,721 -
Other assets 4 1 NM 3,397 3,045 12%
Separate account assets - - - 107,078 114,720 (7%)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 1,052 $ 797 32% $182,043 $181,593 -
- ----------------------------------------------------------------------------------------------------------------------
Future policy benefits, unpaid claims and
claim adjustment expenses $ (16) $ (23) 30% $ 26,664 $ 25,855 3%
Other policy funds and benefits payable (1) (2) 50% 23,018 19,355 19%
Unearned premiums (7) (8) 13% 3,989 3,436 16%
Debt 622 515 21% 2,911 2,564 14%
Trust preferred securities (5) (6) 17% 1,468 1,412 4%
Other liabilities 384 (31) NM 6,181 5,238 18%
Separate account liabilities - - - 107,078 114,720 (7%)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 977 445 120% 171,309 172,580 (1%)
- ----------------------------------------------------------------------------------------------------------------------
Equity x-AOCI, net of tax 398 312 28% 9,640 8,479 14%
AOCI, net of tax (323) 40 NM 1,094 534 105%
- ----------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 75 352 (79%) 10,734 9,013 19%
- ----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,052 $ 797 32% $182,043 $181,593 -
- ----------------------------------------------------------------------------------------------------------------------
- 4 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
CAPITAL STRUCTURE
DECEMBER 31,
---------------------
2002 2001 CHANGE
---------- ---------- --------
DEBT Short-term debt $ 315 $ 599 (47%)
Long-term debt 2,596 1,965 32%
------------------------------------------------------------------------------------------------------------
TOTAL DEBT 2,911 2,564 14%
Trust preferred securities 1,468 1,412 4%
------------------------------------------------------------------------------------------------------------
TOTAL DEBT INCLUDING TRUST PREFERRED SECURITIES $ 4,379 $ 3,976 10%
- ------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' Equity excluding AOCI $ 9,640 $ 8,479 14%
EQUITY AOCI 1,094 534 108%
------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY $ 10,734 $ 9,013 19%
- ------------------------------------------------------------------------------------------------------------------------------
CAPITALIZATION TOTAL CAPITALIZATION INCLUDING AOCI $ 15,113 $ 12,989 16%
TOTAL CAPITALIZATION EXCLUDING AOCI $ 14,019 $ 12,455 13%
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL RATIOS DEBT (INCLUDING TRUST PREFERRED SECURITIES) TO EQUITY INCLUDING AOCI 40.8% 44.1% (3.4)
Debt (excluding Trust Preferred Securities) to equity excluding AOCI 30.2% 30.2% (0.0)
DEBT (INCLUDING TRUST PREFERRED SECURITIES) TO CAPITALIZATION INCLUDING AOCI 29.0% 30.6% (1.7)
Debt (excluding Trust Preferred Securities) to capitalization excluding AOCI 20.8% 20.6% 0.2
- ------------------------------------------------------------------------------------------------------------------------------
- 5 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX
PROPERTY &
LIFE CASUALTY CORPORATE CONSOLIDATED
------------- ------------------- ----------------- ---------------
AS OF DECEMBER 31, 2002
Fixed maturities unrealized gain $ 637 $ 791 $ 29 $ 1,457
Equities unrealized gain (loss) (16) 3 - (13)
Net deferred gain on cash flow hedging instruments 126 2 - 128
--------------------------------------------------------------------------------------------------------------------------
Total unrealized gain 747 796 29 1,572
Cumulative translation adjustments (38) (57) - (95)
Minimum pension liability adjustment - (31) (352) (383)
--------------------------------------------------------------------------------------------------------------------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME $ 709 $ 708 $ (323) $ 1,094
AS OF DECEMBER 31, 2001
Fixed maturities unrealized gain $ 176 $ 349 $ 40 $ 565
Equities unrealized gain (loss) (13) 54 - 41
Net deferred gain on cash flow hedging instruments 62 1 - 63
--------------------------------------------------------------------------------------------------------------------------
Total unrealized gain $ 225 $ 404 $ 40 $ 669
Cumulative translation adjustments (29) (87) - (116)
Minimum pension liability adjustment - (19) - (19)
--------------------------------------------------------------------------------------------------------------------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME $ 196 $ 298 $ 40 $ 534
- 6 -
LIFE
- 7 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
OPERATING RESULTS
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------------------- ---------------------------------
2002 2001 CHANGE 2002 2001 CHANGE
--------- ---------- ---------- --------- --------- -----------
REVENUES Fee income $ 616 $ 691 (11%) $ 2,577 $ 2,633 (2%)
Earned premiums 538 543 (1%) 2,187 2,142 2%
Net investment income 498 459 8% 1,858 1,779 4%
Other revenue 29 32 (9%) 120 128 (6%)
Net realized capital losses (64) (66) 3% (317) (133) (138%)
------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 1,617 1,659 (3%) 6,425 6,549 (2%)
- --------------------------------------------------------------------------------------------------------------------------------
BENEFITS AND Benefits, claims, and claim adjustment
EXPENSES expenses 904 883 2% 3,648 3,611 1%
Insurance operating costs and expenses [1] 388 389 - 1,438 1,390 3%
Amortization of deferred policy acquisition
costs and present value of future profits 142 170 (16%) 628 642 (2%)
Goodwill amortization [2] - 8 (100%) - 24 (100%)
Other expenses 30 30 - 144 117 23%
------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 1,464 1,480 (1%) 5,858 5,784 1%
- --------------------------------------------------------------------------------------------------------------------------------
NET INCOME INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 153 179 (15%) 567 765 (26%)
Income tax expense (benefit) [3] 28 44 (36%) 10 54 (81%)
Cumulative effect of accounting change,
net of tax [4] - - - - (26) 100%
------------------------------------------------------------------------------------------------------------------
Net income [3] [5] 125 135 (7%) 557 685 (19%)
Cumulative effect of accounting change,
net of tax [4] - - - - (26) 100%
Net realized capital losses, after-tax (42) (46) 9% (196) (89) (120%)
------------------------------------------------------------------------------------------------------------------
OPERATING INCOME [3] [5] $ 167 $ 181 (8%) $ 753 $ 800 (6%)
- --------------------------------------------------------------------------------------------------------------------------------
<FN>
[1] Includes commissions, general insurance expenses, taxes, licenses and fees
and dividends to policyholders, net of deferral.
[2] Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets,"
which eliminated the amortization of goodwill and other intangibles with
indefinite useful lives.
[3] For the years ended December 31, 2002 and 2001, includes $76 and $130,
respectively, of tax benefits primarily related to the expected favorable
treatment of certain tax matters arising during the 1996-2002 tax years.
[4] For 2001, represents the cumulative impact of the Company's adoption of
EITF Issue 99-20 of $(3) and SFAS No. 133 of $(23).
[5] For 2002, includes $11 after-tax expense related to Bancorp Services LLC
Litigation and $8 after-tax benefit due to favorable development related
to the September 11 Terrorist Attack exposure. Included in the year ended
December 31, 2001 are after-tax losses of $20 related to the September 11
Terrorist Attack.
</FN>
- 8 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
FINANCIAL HIGHLIGHTS
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------- ----------------------------------
2002 2001 CHANGE 2002 2001 CHANGE
----------- ----------- ---------- ----------- ---------- ---------
REVENUES Investment Products
Individual Annuity $ 365 $ 369 (1%) $ 1,452 $ 1,492 (3%)
Other Investment Products [1] 286 268 7% 1,145 1,014 13%
-----------------------------------------------------------------------------------------------------------------------
Total Investment Products 651 637 2% 2,597 2,506 4%
Individual Life 238 251 (5%) 958 890 8%
Group Benefits 639 636 - 2,582 2,507 3%
Corporate Owned Life Insurance 141 183 (23%) 592 719 (18%)
Other (52) (48) (8%) (304) (73) NM
-----------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES $ 1,617 $ 1,659 (3%) $ 6,425 $ 6,549 (2%)
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCOME Investment Products
Individual Annuity $ 78 $ 96 (19%) $ 333 $ 378 (12%)
Other Investment Products [1] 19 23 (17%) 99 85 16%
-----------------------------------------------------------------------------------------------------------------------
Total Investment Products 97 119 (18%) 432 463 (7%)
Individual Life 34 35 (3%) 133 121 10%
Group Benefits 36 30 20% 128 106 21%
Corporate Owned Life Insurance [2] 12 10 20% 32 37 (14%)
Other [3] (54) (59) 8% (168) (42) NM
-----------------------------------------------------------------------------------------------------------------------
NET INCOME [2] [3] [4] 125 135 (7%) 557 685 (19%)
Net realized capital losses, after-tax (42) (46) 9% (196) (89) (120%)
Cumulative effect of accounting change, net of tax [5] - - - - (26) 100%
-----------------------------------------------------------------------------------------------------------------------
OPERATING INCOME [2] [3] [4] $ 167 $ 181 (8%) $ 753 $ 800 (6%)
- ---------------------------------------------------------------------------------------------------------------------------------
<FN>
[1] Includes Mutual Funds, Corporate, Governmental and Institutional.
[2] For the year ended December 31, 2002 includes $11 after tax expense
related to Bancorp Services, LLC litigation.
[3] For the years ended December 31, 2002 and 2001, includes $76 and $130,
respectively, of tax benefits primarily related to the expected favorable
treatment of certain tax matters arising during the 1996-2002 tax years.
[4] The year ended December 31, 2002 includes $8 after-tax benefit due to
favorable development related to the September 11 Terrorist Attack
exposure. Included in the year ended December 31, 2001 are after-tax
losses of $20 related to the September 11 Terrorist Attack.
[5] For the year ended December 31, 2001, represents the cumulative impact of
the Company's adoption of EITF Issue 99-20 of $(3) and SFAS No. 133 of
$(23).
</FN>
- 9 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
SUPPLEMENTAL DATA
DECEMBER 31,
------------------------------
2002 2001 CHANGE
-------------- ------------- ------------
TOTAL ASSETS Assets
UNDER MANAGEMENT General account $ 42,716 $ 36,889 16%
Separate account 107,078 114,720 (7%)
---------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 149,794 151,609 (1%)
Mutual fund assets 15,321 16,809 (9%)
---------------------------------------------------------------------------------------------------------------
TOTAL ASSETS UNDER MANAGEMENT $ 165,115 $ 168,418 (2%)
- ----------------------------------------------------------------------------------------------------------------------------------
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------------- ---------------------------------------------
2002 2001 CHANGE 2002 2001 CHANGE
------------- ------------- ------------ -------------- ------------- ------------
JAPAN SALES
Yen(Y) (Y) 92,153 (Y) 18,261 NM (Y) 176,485 (Y) 56,374 NM
U.S.$ $ 757 $ 148 NM $ 1,433 $ 462 NM
------------------------------------------- ---------------------------------------------
ACCOUNT VALUE
Yen(Y) (Y) 204,556 (Y) 52,615 NM
U.S.$ $ 1,722 $ 401 NM
- ----------------------------------------------------------------------------------------------------------------------------------
- 10 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INCOME STATEMENTS
INVESTMENT PRODUCTS - INDIVIDUAL ANNUITY
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- --------------------------
REVENUES 2002 2001 CHANGE 2002 2001 CHANGE
-------------------------- --------------------------
Premiums and other considerations
Variable annuity and life fees $ 233 $ 276 (16%) $ 1,011 $ 1,137 (11%)
Cost of insurance charges - - - - - -
ASO fees - - - - - -
Other fees 40 36 11% 157 143 10%
-------------------------------------------------------------------------------------------------------------------------
TOTAL FEE INCOME 273 312 (13%) 1,168 1,280 (9%)
Gross MVA/MGLI spread income 25 27 (7%) 101 108 (6%)
Investment expenses (2) (1) (100%) (7) (6) (17%)
-------------------------------------------------------------------------------------------------------------------------
NET GUARANTEED SEPARATE ACCOUNT INCOME 23 26 (12%) 94 102 (8%)
Direct premiums - - - - - -
Net reinsurance premiums (28) (29) 3% (113) (104) (9%)
-------------------------------------------------------------------------------------------------------------------------
NET PREMIUMS (28) (29) 3% (113) (104) (9%)
-------------------------------------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS 268 309 (13%) 1,149 1,278 (10%)
NET INVESTMENT INCOME
Gross FAS 97 investment income on G/A assets 116 82 41% 384 311 23%
Gross FAS 60 investment income on G/A assets - - - - - -
-------------------------------------------------------------------------------------------------------------------------
GROSS INVESTMENT INCOME ON G/A ASSETS 116 82 41% 384 311 23%
Investment expenses (1) - NM (3) (2) (50%)
-------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME ON G/A ASSETS 115 82 40% 381 309 23%
Net investment income on assigned capital 14 13 8% 56 56 -
Charge for invested capital (32) (35) 9% (134) (151) 11%
-------------------------------------------------------------------------------------------------------------------------
TOTAL NET INVESTMENT INCOME 97 60 62% 303 214 42%
Realized capital losses - - - - - -
----------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 365 369 (1%) 1,452 1,492 (3%)
BENEFITS AND EXPENSES
BENEFITS AND CLAIMS
Death benefits 16 8 100% 49 18 172%
Other contract benefits 6 2 NM 17 8 113%
Change in reserve - - - - - -
Interest credited on G/A assets 81 66 23% 282 260 8%
-------------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND CLAIMS 103 76 36% 348 286 22%
OTHER INSURANCE EXPENSES
Commissions & wholesaling expenses 232 165 41% 784 709 11%
Operating expenses 50 46 9% 195 190 3%
Premium taxes, licenses and fees 3 2 50% 11 10 10%
Dividends to policyholders - - - - - -
Goodwill amortization - 2 (100%) - 7 (100%)
Other miscellaneous expenses 2 - NM 9 8 13%
-------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - EXPENSES BEFORE DEFERRAL 287 215 33% 999 924 8%
Deferred acquisition costs (205) (143) (43%) (682) (618) (10%)
-------------------------------------------------------------------------------------------------------------------------
TOTAL OTHER INSURANCE EXPENSE 82 72 14% 317 306 4%
Amortization of deferred acquisition costs and present value
of future profits 84 95 (12%) 370 404 (8%)
-------------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 269 243 11% 1,035 996 4%
INCOME BEFORE INCOME TAX EXPENSE 96 126 (24%) 417 496 (16%)
Income tax expense 18 30 (40%) 84 118 (29%)
-------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 78 $ 96 (19%) $ 333 $ 378 (12%)
-------------------------------------------------------------------------------------------------------------------------
- 11 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INCOME STATEMENTS
INVESTMENT PRODUCTS - OTHER
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------------------------------
REVENUES 2002 2001 CHANGE 2002 2001 CHANGE
---------------------------------------------------------
PREMIUMS AND OTHER CONSIDERATIONS
Variable annuity and life fees $ 15 $ 17 (12%) $ 65 $ 68 (4%)
Cost of insurance charges - - - - - -
ASO fees - - - - - -
Other fees 67 71 (6%) 304 274 11%
----------------------------------------------------------------------------------------------------------------------
TOTAL FEE INCOME 82 88 (7%) 369 342 8%
Gross MVA/MGLI spread income - - - - - -
Investment expenses - - - - - -
----------------------------------------------------------------------------------------------------------------------
NET GUARANTEED SEPARATE ACCOUNT INCOME - - - - - -
Direct premiums - - - - - -
Net reinsurance premiums - - - - - -
----------------------------------------------------------------------------------------------------------------------
NET PREMIUMS - - - - - -
----------------------------------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS 82 88 (7%) 369 342 8%
NET INVESTMENT INCOME
Gross FAS 97 investment income on G/A assets 201 178 13% 768 666 15%
Gross FAS 60 investment income on G/A assets 1 - NM 1 - NM
----------------------------------------------------------------------------------------------------------------------
GROSS INVESTMENT INCOME ON G/A ASSETS 202 178 13% 769 666 15%
Investment expenses (3) (2) (50%) (11) (8) (38%)
----------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME ON G/A ASSETS 199 176 13% 758 658 15%
Net investment income on assigned capital 5 5 - 20 17 18%
Charge for invested capital - (1) 100% (2) (3) 33%
----------------------------------------------------------------------------------------------------------------------
TOTAL NET INVESTMENT INCOME 204 180 13% 776 672 15%
Realized capital losses - - - - - -
-------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 286 268 7% 1,145 1,014 13%
BENEFITS AND EXPENSES
BENEFITS AND CLAIMS
Death benefits - - - - - -
Other contract benefits - - - 2 1 100%
Change in reserve - - - - - -
Interest credited on G/A assets 164 141 16% 594 532 12%
----------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND CLAIMS 164 141 16% 596 533 12%
OTHER INSURANCE EXPENSES
Commissions & wholesaling expenses 51 65 (22%) 243 257 (5%)
Operating expenses 53 48 10% 199 162 23%
Premium taxes, licenses and fees - - - - - -
Dividends to policyholders - - - - - -
Goodwill amortization - - - - - -
Other miscellaneous expenses 1 2 (50%) 7 4 75%
----------------------------------------------------------------------------------------------------------------------
SUBTOTAL - EXPENSES BEFORE DEFERRAL 105 115 (9%) 449 423 6%
Deferred acquisition costs (28) (36) 22% (118) (121) 2%
----------------------------------------------------------------------------------------------------------------------
TOTAL OTHER INSURANCE EXPENSE 77 79 (3%) 331 302 10%
Amortization of deferred acquisition costs and present value
of future profits 18 15 20% 74 57 30%
----------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 259 235 10% 1,001 892 12%
INCOME BEFORE INCOME TAX EXPENSE 27 33 (18%) 144 122 18%
Income tax expense 8 10 (20%) 45 37 22%
----------------------------------------------------------------------------------------------------------------------
NET INCOME $ 19 $ 23 (17%) $ 99 $ 85 16%
----------------------------------------------------------------------------------------------------------------------
- 12 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INVESTMENT PRODUCTS
SUPPLEMENTAL DATA - SALES/OTHER DEPOSITS
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- ---------------------------
2002 2001 CHANGE 2002 2001 CHANGE
--------- -------- -------- --------- -------- --------
SALES INDIVIDUAL ANNUITY
Broker-dealer $ 2,544 $ 1,594 60% $ 7,734 $ 6,643 16%
Banks 1,030 787 31% 3,902 3,342 17%
-------------------------------------------------------------------------------------------------
TOTAL SALES BY DISTRIBUTION $ 3,574 $ 2,381 50% $ 11,636 $ 9,985 17%
-------------------------------------------------------------------------------------------------
Variable $ 3,479 $ 2,045 70% $ 10,348 $ 8,980 15%
Fixed MVA/other 95 336 (72%) 1,288 1,005 28%
-------------------------------------------------------------------------------------------------
TOTAL SALES BY PRODUCT $ 3,574 $ 2,381 50% $ 11,636 $ 9,985 17%
-------------------------------------------------------------------------------------------------
RETAIL MUTUAL FUNDS $ 843 $ 1,467 (43%) $ 4,825 $ 5,729 (16%)
CORPORATE
Annuity $ 346 $ 341 1% $ 1,001 $ 801 25%
Mutual funds 1 18 (94%) 4 48 (92%)
-------------------------------------------------------------------------------------------------
TOTAL CORPORATE $ 347 $ 359 (3%) $ 1,005 $ 849 18%
-------------------------------------------------------------------------------------------------
GOVERNMENTAL
Annuity $ 51 $ 494 (90%) $ 338 $ 770 (56%)
Mutual funds - - - - - -
-------------------------------------------------------------------------------------------------
TOTAL GOVERNMENTAL $ 51 $ 494 (90%) $ 338 $ 770 (56%)
-------------------------------------------------------------------------------------------------
INSTITUTIONAL
Structured settlements $ 183 $ 137 34% $ 516 $ 554 (7%)
Terminal funding 39 232 (83%) 144 444 (68%)
GIC/other 166 376 (56%) 1,282 1,619 (21%)
-------------------------------------------------------------------------------------------------
TOTAL INSTITUTIONAL $ 388 $ 745 (48%) $ 1,942 $ 2,617 (26%)
-------------------------------------------------------------------------------------------------
529 COLLEGE SAVINGS PLANS $ 30 $ - NM $ 94 $ - NM
- ----------------------------------------------------------------------------------------------------------------------------
SALES & OTHER DEPOSITS INDIVIDUAL ANNUITY
Variable $ 3,479 $ 2,045 70% $ 10,348 $ 8,980 15%
Fixed MVA/other 150 367 (59%) 1,445 1,134 27%
-------------------------------------------------------------------------------------------------
TOTAL INDIVIDUAL ANNUITY 3,629 2,412 50% 11,793 10,114 17%
-------------------------------------------------------------------------------------------------
RETAIL MUTUAL FUNDS 843 1,467 (43%) 4,825 5,729 (16%)
CORPORATE
Annuity 295 204 45% 1,244 853 46%
Mutual funds 5 8 (38%) 68 39 74%
-------------------------------------------------------------------------------------------------
TOTAL CORPORATE 300 212 42% 1,312 892 47%
-------------------------------------------------------------------------------------------------
GOVERNMENTAL
Annuity 191 608 (69%) 1,005 1,343 (25%)
Mutual funds 2 - NM 45 - NM
-------------------------------------------------------------------------------------------------
TOTAL GOVERNMENTAL 193 608 (68%) 1,050 1,343 (22%)
-------------------------------------------------------------------------------------------------
INSTITUTIONAL
Structured settlements 133 129 3% 498 525 (5%)
Terminal funding 38 225 (83%) 144 436 (67%)
GIC/other 64 327 (80%) 1,047 1,179 (11%)
-------------------------------------------------------------------------------------------------
TOTAL INSTITUTIONAL 235 681 (65%) 1,689 2,140 (21%)
-------------------------------------------------------------------------------------------------
529 COLLEGE SAVINGS PLANS 30 - NM 94 - NM
TOTAL INVESTMENT PRODUCTS $ 5,230 $ 5,380 (3%) $ 20,763 $ 20,218 3%
- ----------------------------------------------------------------------------------------------------------------------------
- 13 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INVESTMENT PRODUCTS
SUPPLEMENTAL DATA - ASSETS UNDER MANAGEMENT
YEAR ENDED
DECEMBER 31,
-------------------------------------
2002 2001 CHANGE
----------- ------------ ----------
INDIVIDUAL ANNUITY General account $ 8,583 $ 5,283 62%
Guaranteed separate account 9,721 8,725 11%
Non-guaranteed separate account 56,604 70,145 (19%)
------------------------------------------------------------------------------------------
TOTAL INDIVIDUAL ANNUITY $ 74,908 $ 84,153 (11%)
- -----------------------------------------------------------------------------------------------------------------------------
OTHER INVESTMENT PRODUCTS General account $ 11,913 $ 10,562 13%
Guaranteed separate account 417 420 (1%)
Non-guaranteed separate account 7,591 8,340 (9%)
------------------------------------------------------------------------------------------
TOTAL OTHER INVESTMENT PRODUCTS $ 19,921 $ 19,322 3%
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PRODUCTS General account $ 20,496 $ 15,845 29%
Guaranteed separate account 10,138 9,145 11%
Non-guaranteed separate account 64,195 78,485 (18%)
------------------------------------------------------------------------------------------
TOTAL INVESTMENT PRODUCTS $ 94,829 $ 103,475 (8%)
- -----------------------------------------------------------------------------------------------------------------------------
BY PRODUCT INDIVIDUAL ANNUITY
Individual Variable Annuities
General account $ 7,702 $ 4,430 74%
Separate account 56,641 70,151 (19%)
----------------------------------------------------------------------------------------
Total individual variable annuities 64,343 74,581 (14%)
Fixed MVA & other individual annuities 10,565 9,572 10%
------------------------------------------------------------------------------------------
TOTAL INDIVIDUAL ANNUITY 74,908 84,153 (11%)
------------------------------------------------------------------------------------------
CORPORATE - ANNUITY 2,972 2,518 18%
GOVERNMENTAL - ANNUITY 7,211 7,735 (7%)
INSTITUTIONAL
Structured settlements 2,686 2,242 20%
Terminal funding 1,978 1,879 5%
Other 1,741 2,023 (14%)
GIC 3,333 2,925 14%
------------------------------------------------------------------------------------------
TOTAL INSTITUTIONAL 9,738 9,069 7%
------------------------------------------------------------------------------------------
TOTAL INVESTMENT PRODUCTS ACCOUNT VALUE 94,829 103,475 (8%)
MUTUAL FUND ASSETS
Retail mutual fund assets 14,199 15,907 (11%)
Corporate mutual fund assets 393 69 NM
Governmental mutual fund assets 642 833 (23%)
529 College Savings Plan assets 87 - NM
------------------------------------------------------------------------------------------
TOTAL MUTUAL FUND ASSETS 15,321 16,809 (9%)
------------------------------------------------------------------------------------------
TOTAL INVESTMENT PRODUCTS ASSETS UNDER MANAGEMENT $ 110,150 $ 120,284 (8%)
- -----------------------------------------------------------------------------------------------------------------------------
- 14 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INVESTMENT PRODUCTS - INDIVIDUAL ANNUITY
SUPPLEMENTAL DATA - ACCOUNT VALUE ROLLFORWARD
4Q01 1Q02 2Q02 3Q02 4Q02
----------- ---------- ---------- ---------- ----------
VARIABLE ANNUITIES BEGINNING BALANCE $ 68,545 $ 74,581 $ 75,044 $ 67,712 $ 59,618
Sales and other deposits 2,045 2,164 2,308 2,397 3,479
Change in market value/interest credited 5,927 121 (7,564) (8,265) 3,343
Surrenders (1,617) (1,522) (1,773) (1,957) (1,859)
Death benefits/annuitizations/other (338) (295) (292) (265) (249)
Net exchanges 19 (5) (11) (4) 11
---------------------------------------------------------------------------------------------------------
ENDING BALANCE $ 74,581 $ 75,044 $ 67,712 $ 59,618 $ 64,343
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED MVA AND OTHER BEGINNING BALANCE $ 9,421 $ 9,572 $ 10,080 $ 10,413 $ 10,513
Sales and other deposits 367 642 467 186 150
Change in market value/interest credited 149 149 139 142 167
Surrenders (282) (196) (188) (142) (163)
Death benefits/annuitizations/other (72) (95) (99) (95) (92)
Net exchanges (11) 8 14 9 (10)
---------------------------------------------------------------------------------------------------------
ENDING BALANCE $ 9,572 $ 10,080 $ 10,413 $ 10,513 $ 10,565
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INDIVIDUAL ANNUITY BEGINNING BALANCE $ 77,966 $ 84,153 $ 85,124 $ 78,125 $ 70,131
Sales and other deposits 2,412 2,806 2,775 2,583 3,629
Change in market value/interest credited 6,076 270 (7,425) (8,123) 3,510
Surrenders (1,899) (1,718) (1,961) (2,099) (2,022)
Death benefits/annuitizations/other (410) (390) (391) (360) (341)
Net exchanges 8 3 3 5 1
---------------------------------------------------------------------------------------------------------
ENDING BALANCE $ 84,153 $ 85,124 $ 78,125 $ 70,131 $ 74,908
- ------------------------------------------------------------------------------------------------------------------------------------
- 15 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INVESTMENT PRODUCTS - OTHER
SUPPLEMENTAL DATA - ACCOUNT VALUE AND ASSET ROLLFORWARD
4Q01 1Q02 2Q02 3Q02 4Q02
---------- ----------- --------- ---------- ---------
OTHER INVESTMENT PRODUCTS ACCOUNT VALUE ROLLFORWARD
(EXCLUDING ALL MUTUAL FUNDS) BEGINNING BALANCE $ 17,638 $ 19,322 $ 19,894 $ 19,511 $ 19,368
Sales and other deposits 1,493 902 1,166 1,149 721
Change in market value/interest credited 843 122 (670) (754) 555
Surrenders (558) (321) (743) (409) (595)
Death benefits/annuitizations/other (94) (131) (136) (129) (128)
------------------------------------------------------------------------------------------------
ENDING BALANCE $ 19,322 $ 19,894 $ 19,511 $ 19,368 $ 19,921
- --------------------------------------------------------------------------------------------------------------------------------
RETAIL MUTUAL FUNDS ASSET ROLLFORWARD
BEGINNING BALANCE $ 13,562 $ 15,907 $ 16,432 $ 15,073 $ 13,074
New sales 1,467 1,606 1,419 957 843
Redemptions (594) (592) (736) (815) (711)
------------------------------------------------------------------------------------------------
Net sales 873 1,014 683 142 132
Change in market value 1,502 (85) (2,042) (2,137) 943
Other (30) (404) - (4) 50
------------------------------------------------------------------------------------------------
ENDING BALANCE $ 15,907 $ 16,432 $ 15,073 $ 13,074 $ 14,199
- --------------------------------------------------------------------------------------------------------------------------------
- 16 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INVESTMENT PRODUCTS
SUPPLEMENTAL DATA - GUARANTEED MINIMUM DEATH BENEFITS [1]
AS OF DECEMBER 31, 2002
--------------------------------------------------------
ACCOUNT NET AMT % OF NAR RETAINED
VALUE AT RISK REINSURED NAR
--------------------------------------------------------
BREAKDOWN OF VARIABLE
ANNUITY ACCOUNT Maximum anniversary value (MAV)
VALUE BY GMDB TYPE MAV only $ 50,098 $ 18,586 93% $ 1,386
with 5% rollup 2,131 716 90% 70
with Earnings Protection Benefit Rider (EPB) 1,603 227 75% 57
with 5% rollup & EPB 998 164 91% 14
----------------------------------------------------------------------------------------------------
Total MAV 54,830 19,693 92% 1,527
Ratchet (5-7 years) 7,381 2,305 1% 2,293
Reset (5-7 years) 1,548 292 23% 224
Return of Premium/Other 584 97 80% 19
----------------------------------------------------------------------------------------------------
TOTAL $ 64,343 $ 22,387 82% $ 4,063
- --------------------------------------------------------------------------------------------------------------------------------
AS OF DECEMBER 31, 2002
-----------------------
OTHER DATA o GMDB net statutory reserve [2] $ 267
o Present value of retained guaranteed death benefits 159
o 95% Confidence interval of present value of retained
guaranteed death benefits (86 - 349)
o Embedded value of variable annuity in-force business [1]
Value of in-force 2,510
Cost of capital (284)
------------------------------------------------------------------------------------
Total embedded value $ 2,226
------------------------------------------------------------------------------------
<FN>
[1] Significant Assumptions
9.25% Cost of capital
9% Separate account appreciation
35% Effective tax rate
Excludes the value of statutory surplus
required to support the in-force business
[2] No equivalent GAAP reserve
</FN>
- 17 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INCOME STATEMENTS
INDIVIDUAL LIFE
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------------------------------------------
REVENUES 2002 2001 CHANGE 2002 2001 CHANGE
------------------------------- -----------------------------
PREMIUMS AND OTHER CONSIDERATIONS
Variable annuity and life fees $ 10 $ 11 (9%) $ 41 $ 47 (13%)
Cost of insurance charges 105 102 3% 415 366 13%
ASO fees - - - - - -
Other fees 60 69 (13%) 239 221 8%
--------------------------------------------------------------------------------------------------------------------------
TOTAL FEE INCOME 175 182 (4%) 695 634 10%
Gross MVA/MGLI spread income 2 2 - 10 9 11%
Investment expenses - - - - - -
--------------------------------------------------------------------------------------------------------------------------
NET GUARANTEED SEPARATE ACCOUNT INCOME 2 2 - 10 9 11%
Direct premiums 15 13 15% 56 52 8%
Net reinsurance premiums (18) (11) (64%) (64) (48) (33%)
--------------------------------------------------------------------------------------------------------------------------
NET PREMIUMS (3) 2 NM (8) 4 NM
--------------------------------------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS 174 186 (6%) 697 647 8%
NET INVESTMENT INCOME
Gross FAS 97 investment income on G/A assets 59 62 (5%) 244 230 6%
Gross FAS 60 investment income on G/A assets 12 9 33% 44 33 33%
--------------------------------------------------------------------------------------------------------------------------
GROSS INVESTMENT INCOME ON G/A ASSETS 71 71 - 288 263 10%
Investment expenses (1) (1) - (3) (2) (50%)
--------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME ON G/A ASSETS 70 70 - 285 261 9%
Net investment income on assigned capital 4 4 - 15 14 7%
Charge for invested capital (10) (9) (11%) (39) (32) (22%)
--------------------------------------------------------------------------------------------------------------------------
TOTAL NET INVESTMENT INCOME 64 65 (2%) 261 243 7%
Realized capital losses - - - - - -
-----------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 238 251 (5%) 958 890 8%
BENEFITS AND EXPENSES
BENEFITS AND CLAIMS
Death benefits 61 50 22% 232 191 21%
Other contract benefits 5 5 - 23 23 -
Change in reserve - (3) 100% (8) (11) 27%
Interest credited on G/A assets 47 48 (2%) 196 182 8%
--------------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND CLAIMS 113 100 13% 443 385 15%
OTHER INSURANCE EXPENSES
Commissions & wholesaling expenses 45 58 (22%) 173 221 (22%)
Operating expenses 48 52 (8%) 185 181 2%
Premium taxes, licenses and fees 7 6 17% 31 28 11%
Dividends to policyholders - 1 (100%) 3 2 50%
Goodwill amortization - - - - - -
Other miscellaneous expenses - - - - 1 (100%)
--------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - EXPENSES BEFORE DEFERRAL 100 117 (15%) 392 433 (9%)
Deferred acquisition costs (57) (74) 23% (233) (274) 15%
--------------------------------------------------------------------------------------------------------------------------
TOTAL OTHER INSURANCE EXPENSE 43 43 - 159 159 -
Amortization of deferred acquisition costs and present value
of future profits 32 56 (43%) 160 168 (5%)
--------------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 188 199 (6%) 762 712 7%
INCOME BEFORE INCOME TAX EXPENSE 50 52 (4%) 196 178 10%
Income tax expense 16 17 (6%) 63 57 11%
--------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 34 $ 35 (3%) $ 133 $ 121 10%
--------------------------------------------------------------------------------------------------------------------------
- 18 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INDIVIDUAL LIFE
SUPPLEMENTAL DATA
FOURTH QUARTER ENDED
DECEMBER 31,
--------------------------------------
2002 2001 CHANGE
------------ ----------- -------------
SALES BY DISTRIBUTION Wirehouse/regional broker-dealer/banks $ 22 $ 35 (37%)
Independent broker-dealer/WFS 12 22 (45%)
Life professional/other 14 19 (26%)
-----------------------------------------------------------------------------------
TOTAL SALES BY DISTRIBUTION $ 48 $ 76 (37%)
- ------------------------------------------------------------------------------------------------------------
SALES BY PRODUCT Variable life $ 36 $ 68 (47%)
Universal life 9 6 50%
Term life/other 3 2 50%
-----------------------------------------------------------------------------------
TOTAL SALES BY PRODUCT $ 48 $ 76 (37%)
- ------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE General account
Separate account
-----------------------------------------------------------------------------------
TOTAL ACCOUNT VALUE
- ------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE BY Variable life
PRODUCT Universal life/interest sensitive whole life
Modified guaranteed life
Other
-----------------------------------------------------------------------------------
TOTAL ACCOUNT VALUE BY PRODUCT
- ------------------------------------------------------------------------------------------------------------
LIFE INSURANCE IN FORCE Variable life
Universal life/interest sensitive whole life
Term life
Modified guaranteed life
Other
-----------------------------------------------------------------------------------
TOTAL LIFE INSURANCE IN FORCE
- ------------------------------------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31,
---------------------------------------
2002 2001 CHANGE
------------- ------------ -----------
SALES BY DISTRIBUTION Wirehouse/regional broker-dealer/banks $ 77 $ 99 (22%)
Independent broker-dealer/WFS 56 63 (11%)
Life professional/other 40 66 (39%)
--------------------------------------------------------------------------------
TOTAL SALES BY DISTRIBUTION $ 173 $ 228 (24%)
- ---------------------------------------------------------------------------------------------------------
SALES BY PRODUCT Variable life $ 141 $ 187 (25%)
Universal life 22 35 (37%)
Term life/other 10 6 67%
--------------------------------------------------------------------------------
TOTAL SALES BY PRODUCT $ 173 $ 228 (24%)
- ---------------------------------------------------------------------------------------------------------
ACCOUNT VALUE General account $ 3,658 $ 3,575 2%
Separate account 3,899 4,293 (9%)
--------------------------------------------------------------------------------
TOTAL ACCOUNT VALUE $ 7,557 $ 7,868 (4%)
- ---------------------------------------------------------------------------------------------------------
ACCOUNT VALUE BY Variable life $ 3,648 $ 3,993 (9%)
PRODUCT Universal life/interest sensitive whole life 3,139 3,098 1%
Modified guaranteed life 680 689 (1%)
Other 90 88 2%
--------------------------------------------------------------------------------
TOTAL ACCOUNT VALUE BY PRODUCT $ 7,557 $ 7,868 (4%)
- ---------------------------------------------------------------------------------------------------------
LIFE INSURANCE IN FORCE Variable life $ 66,715 $61,617 8%
Universal life/interest sensitive whole life 38,457 40,172 (4%)
Term life 20,312 17,280 18%
Modified guaranteed life 947 1,003 (6%)
Other 249 197 26%
--------------------------------------------------------------------------------
TOTAL LIFE INSURANCE IN FORCE $ 126,680 $120,269 5%
- ---------------------------------------------------------------------------------------------------------
- 19 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INDIVIDUAL LIFE
SUPPLEMENTAL DATA - ACCOUNT VALUE ROLLFORWARD
4Q01 1Q02 2Q02 3Q02 4Q02
------------ ----------- ------------ ------------ ------------
VARIABLE LIFE BEGINNING BALANCE $ 3,460 $ 3,993 $ 4,119 $ 3,760 $ 3,458
First year & single premiums 130 114 103 91 94
Renewal premiums 129 135 120 117 135
-------------------------------------------------------------------------------------------------------
Premiums and deposits 259 249 223 208 229
Change in market value/interest credited 408 13 (428) (369) 127
Surrenders (43) (44) (58) (45) (65)
Death benefits/policy fees (97) (95) (101) (98) (105)
Net exchanges 6 3 5 2 4
-------------------------------------------------------------------------------------------------------
ENDING BALANCE $ 3,993 $ 4,119 $ 3,760 $ 3,458 $ 3,648
- -----------------------------------------------------------------------------------------------------------------------------
OTHER [1] BEGINNING BALANCE $ 3,862 $ 3,875 $ 3,864 $ 3,875 $ 3,902
First year & single premiums 10 6 9 8 12
Renewal premiums 97 96 84 111 90
-------------------------------------------------------------------------------------------------------
Premiums and deposits 107 102 93 119 102
Change in market value/interest credited 50 51 58 50 52
Surrenders (50) (61) (49) (54) (55)
Death benefits/policy fees (88) (100) (86) (86) (88)
Net exchanges (6) (3) (5) (2) (4)
-------------------------------------------------------------------------------------------------------
ENDING BALANCE $ 3,875 $ 3,864 $ 3,875 $ 3,902 $ 3,909
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INDIVIDUAL LIFE BEGINNING BALANCE $ 7,322 $ 7,868 $ 7,983 $ 7,635 $ 7,360
First year & single premiums 140 120 112 99 106
Renewal premiums 226 231 204 228 225
-------------------------------------------------------------------------------------------------------
Premiums and deposits 366 351 316 327 331
Change in market value/interest credited 458 64 (370) (319) 179
Surrenders (93) (105) (107) (99) (120)
Death benefits/policy fees (185) (195) (187) (184) (193)
Net exchanges - - - - -
-------------------------------------------------------------------------------------------------------
ENDING BALANCE $ 7,868 $ 7,983 $ 7,635 $ 7,360 $ 7,557
- -----------------------------------------------------------------------------------------------------------------------------
<FN>
[1] Includes Universal Life, Interest Sensitive Whole Life, Modified
Guaranteed Life Insurance and other.
</FN>
- 20 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
INCOME STATEMENTS
GROUP BENEFITS
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- -----------------------------
REVENUES 2002 2001 CHANGE 2002 2001 CHANGE
---------------------------- -----------------------------
PREMIUMS AND OTHER CONSIDERATIONS
Variable annuity and life fees $ - $ - - $ - $ - -
Cost of insurance charges - - - - - -
ASO fees 4 4 - 19 17 12%
Other fees - - - - - -
------------------------------------------------------------------------------------------------------------------------
TOTAL FEE INCOME 4 4 - 19 17 12%
Gross MVA/MGLI spread income - - - - - -
Investment expenses - - - - - -
------------------------------------------------------------------------------------------------------------------------
NET GUARANTEED SEPARATE ACCOUNT INCOME - - - - - -
Direct premiums 576 547 5% 2,318 2,183 6%
Net reinsurance premiums (7) 23 NM (10) 59 NM
------------------------------------------------------------------------------------------------------------------------
NET PREMIUMS 569 570 - 2,308 2,242 3%
------------------------------------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND OTHER CONSIDERATIONS 573 574 - 2,327 2,259 3%
NET INVESTMENT INCOME
Gross FAS 97 investment income on G/A assets - - - - - -
Gross FAS 60 investment income on G/A assets 58 54 7% 219 219 -
------------------------------------------------------------------------------------------------------------------------
GROSS INVESTMENT INCOME ON G/A ASSETS 58 54 7% 219 219 -
Investment expenses (1) (1) - (3) (3) -
------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME ON G/A ASSETS 57 53 8% 216 216 -
Net investment income on assigned capital 9 9 - 39 32 22%
Charge for invested capital - - - - - -
------------------------------------------------------------------------------------------------------------------------
TOTAL NET INVESTMENT INCOME 66 62 6% 255 248 3%
Realized capital losses - - - - - -
---------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 639 636 - 2,582 2,507 3%
BENEFITS AND EXPENSES
BENEFITS AND CLAIMS
Death benefits 161 139 16% 644 554 16%
Other contract benefits 267 258 3% 1,036 1,039 -
Change in reserve 19 72 (74%) 198 281 (30%)
Interest credited on G/A assets - - - - - -
------------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND CLAIMS 447 469 (5%) 1,878 1,874 -
OTHER INSURANCE EXPENSES
Commissions & wholesaling expenses 61 51 20% 230 203 13%
Operating expenses 74 72 3% 277 263 5%
Premium taxes, licenses and fees 10 9 11% 42 40 5%
Dividends to policyholders - - - - - -
Goodwill amortization - - - - - -
Other miscellaneous expenses (1) - NM (1) - NM
------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - EXPENSES BEFORE DEFERRAL 144 132 9% 548 506 8%
Deferred acquisition costs (5) (6) 17% (24) (19) (26%)
------------------------------------------------------------------------------------------------------------------------
TOTAL OTHER INSURANCE EXPENSE 139 126 10% 524 487 8%
Amortization of deferred acquisition costs and present value
of future profits 6 3 100% 17 11 55%
------------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 592 598 (1%) 2,419 2,372 2%
INCOME BEFORE INCOME TAX EXPENSE 47 38 24% 163 135 21%
Income tax expense 11 8 38% 35 29 21%
------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 36 $ 30 20% $ 128 $ 106 21%
------------------------------------------------------------------------------------------------------------------------
- 21 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE
GROUP BENEFITS
SUPPLEMENTAL DATA
FOURTH QUARTER ENDED
DECEMBER 31,
-------------------------------------------
2002 2001 CHANGE
------------ ----------- ------------
PREMIUMS FULLY INSURED - ONGOING PREMIUMS
Group disability $ 232 $ 220 5%
Group life 240 216 11%
Other 90 93 (3%)
-----------------------------------------------------------------------------------------------
TOTAL FULLY INSURED - ONGOING PREMIUMS 562 529 6%
-----------------------------------------------------------------------------------------------
Military medicare supplement - 4 (100%)
Total buyouts [1] 7 37 (81%)
-------------------------------------------------------------------------------------------
TOTAL PREMIUMS 569 570 -
Group disability - premium equivalents [2] 55 59 (7%)
-----------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND PREMIUM EQUIVALENT CLAIMS $ 624 $ 629 (1%)
- ----------------------------------------------------------------------------------------------------------------------------
SALES (GROSS FULLY INSURED - ONGOING SALES
ANNUALIZED Group disability $ 28 $ 35 (20%)
NEW PREMIUMS) Group life 25 37 (32%)
Other 12 35 (66%)
-----------------------------------------------------------------------------------------------
TOTAL FULLY INSURED - ONGOING SALES 65 107 (39%)
-----------------------------------------------------------------------------------------------
Total buyouts [1] 7 40 (83%)
-----------------------------------------------------------------------------------------------
TOTAL SALES 72 147 (51%)
Group disability premium equivalents [2] 2 5 (60%)
-----------------------------------------------------------------------------------------------
TOTAL SALES AND PREMIUM EQUIVALENTS $ 74 $ 152 (51%)
- ----------------------------------------------------------------------------------------------------------------------------
GAAP RESERVES Group disability
Group life
Other
-----------------------------------------------------------------------------------------------
TOTAL GAAP RESERVES
- ----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31,
------------------------------------------
2002 2001 CHANGE
------------ ----------- -------------
PREMIUMS FULLY INSURED - ONGOING PREMIUMS
Group disability $ 961 $ 865 11%
Group life 965 817 18%
Other 369 332 11%
---------------------------------------------------------------------------------------------
TOTAL FULLY INSURED - ONGOING PREMIUMS 2,295 2,014 14%
---------------------------------------------------------------------------------------------
Military medicare supplement - 131 (100%)
Total buyouts [1] 13 97 (87%)
-----------------------------------------------------------------------------------------
TOTAL PREMIUMS 2,308 2,242 3%
Group disability - premium equivalents [2] 232 227 2%
---------------------------------------------------------------------------------------------
TOTAL PREMIUMS AND PREMIUM EQUIVALENT CLAIMS $ 2,540 $ 2,469 3%
- --------------------------------------------------------------------------------------------------------------------------
SALES (GROSS FULLY INSURED - ONGOING SALES
ANNUALIZED Group disability $ 218 $ 210 4%
NEW PREMIUMS) Group life 284 220 29%
Other 95 101 (6%)
---------------------------------------------------------------------------------------------
TOTAL FULLY INSURED - ONGOING SALES 597 531 12%
---------------------------------------------------------------------------------------------
Total buyouts [1] 14 102 (86%)
---------------------------------------------------------------------------------------------
TOTAL SALES 611 633 (3%)
Group disability premium equivalents [2] 61 59 3%
---------------------------------------------------------------------------------------------
TOTAL SALES AND PREMIUM EQUIVALENTS $ 672 $ 692 (3%)
- --------------------------------------------------------------------------------------------------------------------------
GAAP RESERVES Group disability $ 2,489 $ 2,350 6%
Group life 765 706 8%
Other 201 203 (1%)
---------------------------------------------------------------------------------------------
TOTAL GAAP RESERVES $ 3,455 $ 3,259 6%
- --------------------------------------------------------------------------------------------------------------------------
<FN>
[1] Takeover of open claim liabilities and other non-recurring premium
amounts.
[2] Administrative services only (ASO) fees and claims under claim management
agreements.
</FN>
- 22 -
THIS PAGE IS LEFT BLANK INTENTIONALLY
- 23 -
THIS PAGE IS LEFT BLANK INTENTIONALLY
- 24 -
PROPERTY & CASUALTY
- 25 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
PROPERTY & CASUALTY
OPERATING RESULTS
FOURTH QUARTER ENDED
DECEMBER 31,
-------------------------------------
INCLUDING EXCLUDING
SEPT. 11 SEPT. 11
NORTH AMERICAN 2002 2001 2001 CHANGE
-------- -------- -------- --------
Underwriting results
Business Insurance $ 27 $ 10 $ 10 170%
Personal Lines 2 (34) (34) NM
Specialty Commercial (24) (39) (39) 38%
Reinsurance (42) (40) (40) (5%)
----------------------------------------------------------------------------------------------
UNDERWRITING RESULTS (37) (103) (103) 64%
Net servicing income 8 5 5 60%
Net investment income 252 228 228 11%
Net realized capital losses (7) (80) (80) 91%
Goodwill amortization - (1) (1) 100%
Other expenses (59) (63) (63) 6%
----------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 157 (14) (14) NM
Income tax expense (benefit) 22 (35) (35) NM
Cumulative effect of accounting change, net of tax - - - -
----------------------------------------------------------------------------------------------
NET INCOME (LOSS) [1] 135 21 21 NM
Less: Restructuring charges, net of tax - (10) (10) 100%
Loss from early retirement of debt, net of tax - (8) (8) 100%
Cumulative effect of accounting change, net of tax - - - -
Net realized capital losses, after-tax (5) (52) (52) 90%
----------------------------------------------------------------------------------------------
NORTH AMERICAN OPERATING INCOME (LOSS) 140 91 91 54%
- ------------------------------------------------------------------------------------------------------------------------
OTHER OPERATIONS
Other Operations net income (loss) 6 4 4 50%
Net realized capital gains (losses), after-tax 4 - - -
----------------------------------------------------------------------------------------------
Other Operations operating income 2 4 4 (50%)
- ------------------------------------------------------------------------------------------------------------------------
PROPERTY
& CASUALTY NET INCOME (LOSS) $ 141 $ 25 $ 25 NM
OPERATING INCOME (LOSS) $ 142 $ 95 $ 95 49%
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31,
-------------------------------------
INCLUDING EXCLUDING
SEPT. 11 SEPT. 11
NORTH AMERICAN 2002 2001 2001 CHANGE
--------- -------- -------- ------
Underwriting results
Business Insurance $ 44 $ (242) $ 3 NM
Personal Lines (46) (87) (78) 41%
Specialty Commercial (23) (262) (95) 76%
Reinsurance (59) (375) (149) 60%
---------------------------------------------------------------------------------------------
UNDERWRITING RESULTS (84) (966) (319) 74%
Net servicing income 15 22 22 (32%)
Net investment income 928 907 907 2%
Net realized capital losses (56) (108) (108) 48%
Goodwill amortization - (3) (3) 100%
Other expenses (243) (214) (214) (14%)
---------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 560 (362) 285 96%
Income tax expense (benefit) 78 (245) (18) NM
Cumulative effect of accounting change, net of tax - (8) (8) 100%
---------------------------------------------------------------------------------------------
NET INCOME (LOSS) [1] 482 (125) 295 63%
Less: Restructuring charges, net of tax - (10) (10) 100%
Loss from early retirement of debt, net of tax - (8) (8) 100%
Cumulative effect of accounting change, net of tax - (8) (8) 100%
Net realized capital losses, after-tax (37) (79) (79) 53%
---------------------------------------------------------------------------------------------
NORTH AMERICAN OPERATING INCOME (LOSS) 519 (20) 400 30%
- -----------------------------------------------------------------------------------------------------------------------
OTHER OPERATIONS
Other Operations net income (loss) (13) 10 10 NM
Net realized capital gains (losses), after-tax (17) 4 4 NM
---------------------------------------------------------------------------------------------
Other Operations operating income 4 6 6 (33%)
- -----------------------------------------------------------------------------------------------------------------------
PROPERTY
& CASUALTY NET INCOME (LOSS) $ 469 $ (115) $ 305 54%
OPERATING INCOME (LOSS) $ 523 $ (14) $ 406 29%
- -----------------------------------------------------------------------------------------------------------------------
<FN>
[1] The fourth quarter and year ended December 31, 2001 include after-tax
goodwill amortization of $1 and $3, respectively.
</FN>
- 26 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
PROPERTY & CASUALTY
NORTH AMERICAN UNDERWRITING RESULTS AND SELECTED FINANCIAL DATA [1]
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------ -----------------------------------------
INCLUDING EXCLUDING INCLUDING EXCLUDING
SEPT. 11 SEPT. 11 SEPT. 11 SEPT. 11
2002 2001 2001 CHANGE 2002 2001 2001 CHANGE
-------- -------- -------- -------- -------- -------- --------- -----------
GAAP UNDERWRITING RESULTS
Written premiums $2,128 $1,871 $1,848 15% $8,527 $7,569 $ 7,660 11%
Change in reserve (15) (41) (41) 63% 482 319 319 51%
--------------------------------------------------------------------------------------------------------------------------------
Earned premiums 2,143 1,912 1,889 13% 8,045 7,250 7,341 10%
Loss and loss adjustment expenses 1,521 1,416 1,393 9% 5,699 6,004 5,449 5%
Underwriting expenses 589 562 562 5% 2,363 2,199 2,198 8%
Dividends to policyholders 17 9 9 89% 57 38 38 50%
Other adjustments 53 28 28 89% 10 (25) (25) NM
--------------------------------------------------------------------------------------------------------------------------------
UNDERWRITING RESULTS $ (37) $ (103) $ (103) 64% $ (84) $ (966) $ (319) 74%
- ------------------------------------------------------------------------------------------------------------------------------------
UNDERWRITING RATIOS
LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 59.6 62.1 61.7 2.1 59.6 70.3 62.8 3.2
--------------------------------------------------------------------------------------------------------------------------------
Loss adjustment expenses 11.4 12.0 12.1 0.7 11.2 12.5 11.4 0.2
Expenses 27.7 30.0 30.4 2.7 27.7 29.0 28.7 1.0
--------------------------------------------------------------------------------------------------------------------------------
EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 39.1 42.0 42.5 3.4 38.9 41.5 40.1 1.2
--------------------------------------------------------------------------------------------------------------------------------
Policyholder dividends 0.8 0.5 0.5 (0.3) 0.7 0.5 0.5 (0.2)
--------------------------------------------------------------------------------------------------------------------------------
COMBINED RATIO [2] 99.4 104.6 104.6 5.2 99.2 112.4 103.4 4.2
- ------------------------------------------------------------------------------------------------------------------------------------
NORTH AMERICAN P&C OTHER OPERATIONS PROPERTY & CASUALTY
DEC. 31, DEC. 31, DEC. 31,
------------------- --------------------- -----------------------
2002 2001 2002 2001 2002 2001
-------- ---------- -------- -------- ---------- -----------
Investments [3] $18,137 $ 16,140 $2,436 $2,169 $ 20,573 $ 18,309
Gross Loss & LAE Reserves [3] 13,053 12,999 4,106 4,037 17,159 17,036
Net Loss & LAE Reserves [3] 10,206 10,037 2,935 2,825 13,141 12,862
Equity x-AOCI, net of tax 3,951 3,432 311 321 4,262 3,753
Equity including AOCI 4,567 3,737 403 314 4,970 4,051
- --------------------------------------------------------------------------------------------------------------------
<FN>
[1] Underwriting results section excludes Other Operations.
[2] Losses related to Enron impacted the combined ratio for the fourth quarter
and year ended December 31, 2001 by 1.3 and 0.3 points, respectively.
[3] Effective January 1, 2002 the Company transferred $210 of investments,
$311 of gross loss & LAE reserves and $300 of net loss & LAE reserves from
North American to Other Operations reflecting the runoff of the Company's
international reinsurance business.
</FN>
- 27 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
PROPERTY & CASUALTY
UNDERWRITING RESULTS
BUSINESS INSURANCE
FOURTH QUARTER ENDED
DECEMBER 31,
-----------------------------------------
INCLUDING EXCLUDING
SEPT. 11 SEPT. 11
2002 2001 2001 CHANGE
--------- --------- ---------- --------
GAAP UNDERWRITING RESULTS
Written premiums $ 885 $ 752 $ 752 18%
Change in reserve 52 47 47 11%
-------------------------------------------------------------------------------------------
Earned premiums 833 705 705 18%
Loss and loss adjustment expenses 510 437 437 17%
Underwriting expenses 280 251 251 12%
Dividends to policyholders 13 8 8 63%
Other adjustments 3 (1) (1) NM
-------------------------------------------------------------------------------------------
UNDERWRITING RESULTS $ 27 $ 10 $ 10 170%
- -----------------------------------------------------------------------------------------------
UNDERWRITING RATIOS
LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 48.2 50.1 50.1 1.9
-------------------------------------------------------------------------------------------
Loss adjustment expenses 13.0 11.8 11.8 (1.2)
Expenses 31.8 33.4 33.4 1.6
-------------------------------------------------------------------------------------------
EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 44.8 45.2 45.2 0.4
-------------------------------------------------------------------------------------------
Policyholder dividends 1.6 1.2 1.2 (0.4)
-------------------------------------------------------------------------------------------
COMBINED RATIO 94.5 96.5 96.5 2.0
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
WRITTEN PREMIUM BREAKDOWN
Small Commercial $ 440 $ 378 $ 378 16%
Middle Market 445 374 374 19%
September 11 Terrorist Attack - - - -
-------------------------------------------------------------------------------------------
TOTAL $ 885 $ 752 $ 752 18%
- -----------------------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31,
------------------------------------------
INCLUDING EXCLUDING
SEPT. 11 SEPT. 11
2002 2001 2001 CHANGE
---------- --------- ---------- --------
GAAP UNDERWRITING RESULTS
Written premiums $3,412 $2,871 $2,886 18%
Change in reserve 286 241 241 19%
--------------------------------------------------------------------------------------------
Earned premiums 3,126 2,630 2,645 18%
Loss and loss adjustment expenses 1,962 1,934 1,704 15%
Underwriting expenses 1,088 926 926 17%
Dividends to policyholders 48 34 34 41%
Other adjustments (16) (22) (22) 27%
--------------------------------------------------------------------------------------------
UNDERWRITING RESULTS $ 44 $ (242) $ 3 NM
- ------------------------------------------------------------------------------------------------
UNDERWRITING RATIOS
LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 50.7 59.9 52.3 1.6
--------------------------------------------------------------------------------------------
Loss adjustment expenses 12.0 13.7 12.1 0.1
Expenses 31.9 32.3 32.1 0.2
--------------------------------------------------------------------------------------------
EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 43.9 45.9 44.2 0.3
--------------------------------------------------------------------------------------------
Policyholder dividends 1.5 1.3 1.3 (0.2)
--------------------------------------------------------------------------------------------
COMBINED RATIO 96.2 107.1 97.8 1.6
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
WRITTEN PREMIUM BREAKDOWN
Small Commercial $1,678 $1,447 $1,447 16%
Middle Market 1,734 1,439 1,439 21%
September 11 Terrorist Attack - (15) - -
--------------------------------------------------------------------------------------------
TOTAL $3,412 $2,871 $2,886 18%
- ------------------------------------------------------------------------------------------------
- 28 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
PROPERTY & CASUALTY
UNDERWRITING RESULTS
PERSONAL LINES
FOURTH QUARTER ENDED
DECEMBER 31,
-----------------------------------------
INCLUDING EXCLUDING
SEPT. 11 SEPT. 11
2002 2001 2001 CHANGE
--------- --------- --------- --------
GAAP UNDERWRITING RESULTS
Written premiums $ 756 $ 713 $ 713 6%
Change in reserve (10) 6 6 NM
------------------------------------------------------------------------------------------
Earned premiums 766 707 707 8%
Loss and loss adjustment expenses 584 575 575 2%
Underwriting expenses 176 168 168 5%
Dividends to policyholders - - - -
Other adjustments 4 (2) (2) NM
------------------------------------------------------------------------------------------
UNDERWRITING RESULTS $ 2 $ (34) $ (34) NM
- ----------------------------------------------------------------------------------------------
UNDERWRITING RATIOS
LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 64.8 69.7 69.7 4.9
------------------------------------------------------------------------------------------
Loss adjustment expenses 11.4 11.5 11.5 0.1
Expenses 23.2 23.6 23.6 0.4
------------------------------------------------------------------------------------------
EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 34.7 35.1 35.1 0.4
------------------------------------------------------------------------------------------
Policyholder dividends - - - -
------------------------------------------------------------------------------------------
COMBINED RATIO 99.5 104.8 104.8 5.3
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
WRITTEN PREMIUM BREAKDOWN
AARP $ 455 $ 409 $ 409 11%
Other Affinity 42 50 50 (16%)
Standard 197 196 196 1%
Non-Standard 62 58 58 7%
------------------------------------------------------------------------------------------
TOTAL $ 756 $ 713 $ 713 6%
- ----------------------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31,
----------------------------------------
INCLUDING EXCLUDING
SEPT. 11 SEPT. 11
2002 2001 2001 CHANGE
--------- ---------- ---------- --------
GAAP UNDERWRITING RESULTS
Written premiums $3,050 $2,860 $2,860 7%
Change in reserve 66 113 113 (42%)
-------------------------------------------------------------------------------------------
Earned premiums 2,984 2,747 2,747 9%
Loss and loss adjustment expenses 2,319 2,173 2,164 7%
Underwriting expenses 703 687 687 2%
Dividends to policyholders - - - -
Other adjustments 8 (26) (26) NM
-------------------------------------------------------------------------------------------
UNDERWRITING RESULTS $ (46) $ (87) $ (78) 41%
- -----------------------------------------------------------------------------------------------
UNDERWRITING RATIOS
LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 66.1 67.4 67.2 1.1
-------------------------------------------------------------------------------------------
Loss adjustment expenses 11.6 11.7 11.6 -
Expenses 23.0 24.0 24.0 1.0
-------------------------------------------------------------------------------------------
EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 34.7 35.7 35.6 0.9
-------------------------------------------------------------------------------------------
Policyholder dividends - - - -
-------------------------------------------------------------------------------------------
COMBINED RATIO 100.8 103.1 102.8 2.0
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
WRITTEN PREMIUM BREAKDOWN
AARP $1,855 $1,638 $1,638 13%
Other Affinity 179 201 201 (11%)
Standard 756 783 783 (3%)
Non-Standard 260 238 238 9%
-------------------------------------------------------------------------------------------
TOTAL $3,050 $2,860 $2,860 7%
- -----------------------------------------------------------------------------------------------
- 29 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
PROPERTY & CASUALTY
UNDERWRITING RESULTS
SPECIALTY COMMERCIAL
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------------------- --------------------------------------
INCLUDING EXCLUDING INCLUDING EXCLUDING
SEPT. 11 SEPT. 11 SEPT. 11 SEPT. 11
2002 2001 2001 CHANGE 2002 2001 2001 CHANGE
-------- -------- --------- --------- --------- --------- -------- -------
GAAP UNDERWRITING RESULTS
Written premiums $ 334 $ 214 $ 214 56% $1,362 $ 989 $ 996 37%
Change in reserve (18) (42) (42) 57% 140 (33) (33) NM
-------------------------------------------------------------------------------------------------------------------------------
Earned premiums 352 256 256 38% 1,222 1,022 1,029 19%
Loss and loss adjustment expenses 252 187 187 35% 849 925 766 11%
Underwriting expenses 87 89 89 (2%) 381 334 333 14%
Dividends to policyholders 4 1 1 NM 9 4 4 125%
Other adjustments 33 18 18 83% 6 21 21 (71%)
-------------------------------------------------------------------------------------------------------------------------------
UNDERWRITING RESULTS $ (24) $ (39) $ (39) 38% $ (23) $ (262) $ (95) 76%
- ------------------------------------------------------------------------------------------------------------------------------------
UNDERWRITING RATIOS
LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 61.0 56.0 56.0 (5.0) 57.6 73.1 59.5 1.9
-------------------------------------------------------------------------------------------------------------------------------
Loss adjustment expenses 10.4 18.2 18.2 7.8 11.8 17.6 15.0 3.2
Expenses 25.7 41.0 41.0 15.3 27.9 33.8 33.4 5.5
-------------------------------------------------------------------------------------------------------------------------------
EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 36.2 59.2 59.2 23.0 39.8 51.4 48.4 8.6
-------------------------------------------------------------------------------------------------------------------------------
Policyholder dividends 1.0 0.3 0.3 (0.7) 0.7 0.4 0.4 (0.3)
-------------------------------------------------------------------------------------------------------------------------------
COMBINED RATIO [1] 98.1 115.5 115.5 17.4 98.1 124.8 108.3 10.2
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
WRITTEN PREMIUM BREAKDOWN
Risk Management Division $ 42 $ 31 $ 31 35% $ 235 $ 227 $ 227 4%
Property 70 51 51 37% 405 284 284 43%
Casualty 86 55 55 56% 321 207 207 55%
Bond 38 26 26 46% 157 138 138 14%
Professional Liability 75 58 58 29% 239 168 168 42%
Other 23 (7) (7) NM 5 (28) (28) NM
September 11 Terrorist Attack - - - - - (7) - -
-------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 334 $ 214 $ 214 56% $1,362 $ 989 $ 996 37%
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
[1] Losses related to Enron impacted the combined ratio for the fourth quarter
and year ended December 31, 2001 by 6.2 and 1.5 points, respectively.
</FN>
- 30 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
PROPERTY & CASUALTY
UNDERWRITING RESULTS
REINSURANCE
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------- --------------------------------------
INCLUDING EXCLUDING INCLUDING EXCLUDING
SEPT. 11 SEPT. 11 SEPT. 11 SEPT. 11
2002 2001 2001 CHANGE 2002 2001 2001 CHANGE
------- --------- --------- ------- -------- --------- --------- -------
GAAP UNDERWRITING RESULTS
Written premiums $ 153 $ 192 $ 169 (9%) $ 703 $ 849 $ 918 (23%)
Change in reserve (39) (52) (52) 25% (10) (2) (2) NM
------------------------------------------------------------------------------------------------------------------------------
Earned premiums 192 244 221 (13%) 713 851 920 (23%)
Loss and loss adjustment expenses 175 217 194 (10%) 569 972 815 (30%)
Underwriting expenses 46 54 54 (15%) 191 252 252 (24%)
Dividends to policyholders - - - - - - - -
Other adjustments 13 13 13 - 12 2 2 NM
------------------------------------------------------------------------------------------------------------------------------
UNDERWRITING RESULTS $ (42) $ (40) $ (40) (5%) $ (59) $ (375) $ (149) 60%
- -----------------------------------------------------------------------------------------------------------------------------------
UNDERWRITING RATIOS
LOSS RATIO EXCLUDING LOSS ADJUSTMENT EXPENSES 85.5 81.4 79.5 (6.0) 74.9 108.9 83.7 8.8
------------------------------------------------------------------------------------------------------------------------------
Loss adjustment expenses 5.6 7.4 8.2 2.6 4.9 5.3 4.9 -
Expenses 30.7 28.4 32.2 1.5 27.2 29.7 27.4 0.2
------------------------------------------------------------------------------------------------------------------------------
EXPENSE RATIO INCLUDING LOSS ADJUSTMENT EXPENSES 36.3 35.8 40.4 4.1 32.1 35.0 32.3 0.2
------------------------------------------------------------------------------------------------------------------------------
Policyholder dividends - - - - - - - -
------------------------------------------------------------------------------------------------------------------------------
COMBINED RATIO [1] [2] 121.8 117.2 119.9 (1.9) 107.1 143.9 116.1 9.0
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
WRITTEN PREMIUM BREAKDOWN
Traditional reinsurance $ 150 $ 159 $ 159 (6%) $ 618 $ 736 $ 736 (16%)
Alternative Risk Transfer (ART) 3 10 10 (70%) 85 182 182 (53%)
September 11 Terrorist Attack - 23 - - - (69) - -
------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 153 $ 192 $ 169 (9%) $ 703 $ 849 $ 918 (23%)
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
[1] Losses related to Enron impacted the combined ratio for the fourth quarter
and year ended December 31, 2001 by 4.5 and 1.1 points, respectively.
[2] Excluding ART, the combined ratio for the fourth quarter and year ended
December 31, 2002 would improve by 19.7 and 5.0 points, respectively.
</FN>
- 31 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
PROPERTY & CASUALTY
OPERATING RESULTS
OTHER OPERATIONS [1]
FOURTH QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------- -------------------------------
2002 2001 CHANGE 2002 2001 CHANGE
---------- ----------- ---------- ---------- ----------- -------
INTERNATIONAL Total revenues $ - $ - - $ - $ 25 (100%)
--------------------------------------------------------------------------------------------------------------------
Net income - (1) 100% - 1 (100%)
Net realized capital gains, after-tax - - - - 3 (100%)
--------------------------------------------------------------------------------------------------------------------
Operating income (loss) $ - $ (1) 100% $ - $ (2) 100%
- -----------------------------------------------------------------------------------------------------------------------------------
OTHER Total revenues $ 51 $ 35 46% $ 189 $ 143 32%
--------------------------------------------------------------------------------------------------------------------
Net income (loss) 6 5 20% (13) 9 NM
Net realized capital gains (losses), after-tax 4 - - (17) 1 NM
--------------------------------------------------------------------------------------------------------------------
Operating income $ 2 $ 5 (60%) $ 4 $ 8 (50%)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL OTHER Total revenues $ 51 $ 35 46% $ 189 $ 168 13%
--------------------------------------------------------------------------------------------------------------------
OPERATIONS Net income (loss) 6 4 50% (13) 10 NM
Net realized capital gains (losses), after-tax 4 - - (17) 4 NM
--------------------------------------------------------------------------------------------------------------------
Operating income $ 2 $ 4 (50%) $ 4 $ 6 (33%)
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
[1] Other Operations includes certain property and casualty insurance
operations which have discontinued writing new business, claims related to
asbestos and environmental exposures and Property & Casualty's
International businesses up until their dates of sale. The results of
Other Operations have been excluded from North American.
</FN>
- 32 -
INVESTMENTS
- 33 -
- 34 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
GENERAL ACCOUNT
INVESTMENT EARNINGS BEFORE-TAX
FOURTH QUARTER ENDED DECEMBER 31, 2002
- --------------------------------------
LIFE PROPERTY & CASUALTY CORPORATE CONSOLIDATED
------------------------ ------------------------ ------------------------ ----------------------
Net Realized Net Realized Net Realized Net Realized
Capital Capital Capital Capital
Income Gain/(Loss) Income Gain/(Loss) Income Gain/(Loss) Income Gain/(Loss)
------ ----------- ------ ----------- ------ ----------- ------ -----------
Fixed maturities [1]
Taxable $ 370 $ 161 $ 1 $ 532
Tax-exempt 25 107 - 132
- -----------------------------------------------------------------------------------------------------------------------------------
Total fixed maturities 395 $ (69) 268 $ 42 1 $ - 664 $ (27)
Equities 5 (3) 4 (42) - - 9 (45)
Mortgage loans 6 - 4 - - - 10 -
Real estate - - - (1) - - - (1)
Policy loans 58 - - - - - 58 -
Other 40 8 18 (2) 5 - 63 6
- -----------------------------------------------------------------------------------------------------------------------------------
Subtotal 504 (64) 294 (3) 6 - 804 (67)
Less investment expense 6 - 6 - - - 12 -
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT EARNINGS $ 498 $ (64) $ 288 $ (3) $ 6 $ - $ 792 $ (67)
- -----------------------------------------------------------------------------------------------------------------------------------
FOURTH QUARTER ENDED DECEMBER 31, 2001
- --------------------------------------
Fixed maturities [1]
Taxable $ 332 $ 141 $ - $ 473
Tax-exempt 20 108 - 128
- -----------------------------------------------------------------------------------------------------------------------------------
Total fixed maturities 352 $ (53) 249 $ (28) - $ - 601 $ (81)
Equities 8 - 5 (39) - - 13 (39)
Mortgage loans 6 - 1 1 - - 7 1
Real estate - - (1) - - - (1) -
Policy loans 72 - - - - - 72 -
Other 25 (13) 13 (13) 5 - 43 (26)
- -----------------------------------------------------------------------------------------------------------------------------------
Subtotal 463 (66) 267 (79) 5 - 735 (145)
Less investment expense 4 - 5 - - - 9 -
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT EARNINGS $ 459 $ (66) $ 262 $ (79) $ 5 $ - $ 726 $ (145)
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
[1] Includes income on short-term bonds.
</FN>
- 35 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
GENERAL ACCOUNT
INVESTMENT EARNINGS BEFORE-TAX
FOR THE YEAR ENDED DECEMBER 31, 2002
- ------------------------------------
LIFE PROPERTY & CASUALTY CORPORATE CONSOLIDATED
------------------------ ------------------------ ------------------------ ----------------------
Net Realized Net Realized Net Realized Net Realized
Capital Capital Capital Capital
Income Gain/(Loss) Income Gain/(Loss) Income Gain/(Loss) Income Gain/(Loss)
------ ----------- ------ ----------- ------ ----------- ------ -----------
Fixed maturities [1]
Taxable $ 1,394 $ 591 $ 2 $ 1,987
Tax-exempt 91 432 - 523
- -------------------------------------------------------------------------------------------------------------------------------
Total fixed maturities 1,485 (295) 1,023 (82) 2 - 2,510 $ (377)
Equities 19 (22) 17 (20) - - 36 (42)
Mortgage loans 22 - 9 - - - 31 -
Real estate - - 2 2 - - 2 2
Policy loans 254 - - - - - 254 -
Other 99 - 46 17 18 - 163 17
- --------------------------------------------------------------------------------------------------------------------------------
Subtotal 1,879 (317) 1,097 (83) 20 - 2,996 (400)
Less investment expense 21 - 22 - - - 43 -
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT EARNINGS $ 1,858 $ (317) $ 1,075 $ (83) $ 20 $ - $ 2,953 $ (400)
- --------------------------------------------------------------------------------------------------------------------------------
After-tax yield on total
investment portfolio [2] 4.1% 4.5% 4.3%
---------------------
FOR THE YEAR ENDED DECEMBER 31, 2001
- ------------------------------------
Fixed maturities [1]
Taxable $ 1,291 $ 567 $ - $ 1,858
Tax-exempt 73 431 - 504
- --------------------------------------------------------------------------------------------------------------------------------
Total fixed maturities 1,364 (48) 998 (1) - - 2,362 $ (49)
Equities 19 (11) 20 (23) - - 39 (34)
Mortgage loans 24 - 9 1 - - 33 1
Real estate - - 2 - - - 2 -
Policy loans 307 - - - - - 307 -
Other 81 (74) 44 (80) 18 - 143 (154)
- --------------------------------------------------------------------------------------------------------------------------------
Subtotal 1,795 (133) 1,073 (103) 18 - 2,886 (236)
Less investment expense 16 - 20 - - - 36 -
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT EARNINGS $ 1,779 $ (133) $ 1,053 $ (103) $ 18 $ - $ 2,850 $ (236)
- --------------------------------------------------------------------------------------------------------------------------------
After-tax yield on total
investment portfolio [2] 4.7% 4.7% 4.7%
<FN>
[1] Includes income on short-term bonds.
[2] After-tax yield calculated by dividing after-tax net investment income by
average invested assets at amortized cost (current + prior year end).
</FN>
- 36 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
GENERAL ACCOUNT
COMPOSITION OF INVESTED ASSETS
DECEMBER 31, 2002
- -----------------
LIFE PROPERTY & CASUALTY
---------------------------- ----------------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
Fixed maturities, at fair value $ 29,377 86.7% $ 19,446 94.5%
Equity securities, at fair value 458 1.3% 459 2.2%
Policy loans, at outstanding balance 2,934 8.7% - -
Real estate/Mortgage loans, at cost 334 1.0% 131 0.7%
Other investments 788 2.3% 537 2.6%
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $ 33,891 100.0% $ 20,573 100.0%
- ---------------------------------------------------------------------------------------------------------
DECEMBER 31, 2002
- -----------------
CORPORATE CONSOLIDATED
--------------------------- ---------------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
Fixed maturities, at fair value $ 66 100.0% $ 48,889 89.6%
Equity securities, at fair value - - 917 1.7%
Policy loans, at outstanding balance - - 2,934 5.4%
Real estate/Mortgage loans, at cost - - 465 0.9%
Other investments - - 1,325 2.4%
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $ 66 100.0% $ 54,530 100.0%
- ---------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
- -----------------
Fixed maturities, at fair value $ 23,301 82.1% $ 16,742 91.5%
Equity securities, at fair value 428 1.5% 921 5.0%
Policy loans, at outstanding balance 3,317 11.7% - -
Real estate/Mortgage loans, at cost 330 1.2% 59 0.3%
Other investments 1,001 3.5% 587 3.2%
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $ 28,377 100.0% $ 18,309 100.0%
- ---------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
- -----------------
Fixed maturities, at fair value $ 3 100.0% $ 40,046 85.8%
Equity securities, at fair value - - 1,349 2.9%
Policy loans, at outstanding balance - - 3,317 7.1%
Real estate/Mortgage loans, at cost - - 389 0.8%
Other investments - - 1,588 3.4%
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $ 3 100.0% $ 46,689 100.0%
- ---------------------------------------------------------------------------------------------------------
- 37 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
GENERAL ACCOUNT
FIXED MATURITIES BY TYPE AT FAIR VALUE
DECEMBER 31, 2002
- -----------------
LIFE PROPERTY & CASUALTY
--------------------------- ------------------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
Corporate $ 14,596 49.7% $ 5,459 28.0%
CMO 691 2.4% 49 0.3%
Municipal - tax-exempt 2,000 6.8% 8,846 45.5%
Gov't/Gov't agencies - U.S. 360 1.2% 124 0.6%
ABS 3,954 13.5% 731 3.8%
Gov't/Gov't agencies - Foreign 526 1.8% 1,088 5.6%
MBS - agency 1,851 6.3% 522 2.7%
Commercial MBS 4,234 14.4% 1,573 8.1%
Municipal - taxable 31 0.1% 52 0.3%
Redeemable preferred stock 34 0.1% 68 0.3%
Short-term 1,100 3.7% 934 4.8%
- -----------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 29,377 100.0% $ 19,446 100.0%
- -----------------------------------------------------------------------------------------------------------
DECEMBER 31, 2002
- -----------------
CORPORATE CONSOLIDATED
-------------------------- ---------------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
Corporate $ - - $ 20,055 40.9%
CMO - - 740 1.5%
Municipal - tax-exempt - - 10,846 22.2%
Gov't/Gov't agencies - U.S. - - 484 1.0%
ABS - - 4,685 9.6%
Gov't/Gov't agencies - Foreign - - 1,614 3.3%
MBS - agency - - 2,373 4.9%
Commercial MBS - - 5,807 11.9%
Municipal - taxable - - 83 0.2%
Redeemable preferred stock - - 102 0.2%
Short-term 66 100.0% 2,100 4.3%
- -----------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 66 100.0% $ 48,889 100.0%
- -----------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
- -----------------
Corporate $ 11,419 49.0% $ 4,179 25.0%
CMO 767 3.3% 97 0.6%
Municipal - tax-exempt 1,565 6.7% 8,401 50.2%
Gov't/Gov't agencies - U.S. 374 1.6% 201 1.2%
ABS 3,427 14.7% 717 4.3%
Gov't/Gov't agencies - Foreign 390 1.7% 613 3.6%
MBS - agency 981 4.2% 381 2.3%
Commercial MBS 3,029 13.0% 1,145 6.8%
Municipal - taxable 47 0.2% 47 0.3%
Redeemable preferred stock 57 0.3% 99 0.6%
Short-term 1,245 5.3% 862 5.1%
- -----------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 23,301 100.0% $ 16,742 100.0%
- -----------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
- -----------------
Corporate $ - - $ 15,598 39.0%
CMO 3 100.0% 867 2.2%
Municipal - tax-exempt - - 9,966 24.9%
Gov't/Gov't agencies - U.S. - - 575 1.4%
ABS - - 4,144 10.3%
Gov't/Gov't agencies - Foreign - - 1,003 2.5%
MBS - agency - - 1,362 3.4%
Commercial MBS - - 4,174 10.4%
Municipal - taxable - - 94 0.2%
Redeemable preferred stock - - 156 0.4%
Short-term - - 2,107 5.3%
- -----------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 3 100.0% $ 40,046 100.0%
- -----------------------------------------------------------------------------------------------------------
- 38 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
GENERAL ACCOUNT
FIXED MATURITIES ASSET QUALITY
DECEMBER 31, 2002
- -----------------
LIFE PROPERTY & CASUALTY
---------------------------- ----------------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
AAA $ 5,495 18.7% $ 7,398 38.1%
AA 3,284 11.2% 3,388 17.4%
A 8,766 29.8% 3,567 18.3%
BBB 6,546 22.3% 2,456 12.6%
Government 2,786 9.5% 660 3.4%
BB & below 1,400 4.8% 1,043 5.4%
Short-term 1,100 3.7% 934 4.8%
- -------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 29,377 100.0% $ 19,446 100.0%
- -------------------------------------------------------------------------------------------------------
DECEMBER 31, 2002
- -----------------
CORPORATE CONSOLIDATED
---------------------------- ----------------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
AAA $ - - $ 12,893 26.4%
AA - - 6,672 13.7%
A - - 12,333 25.2%
BBB - - 9,002 18.4%
Government - - 3,446 7.0%
BB & below - - 2,443 5.0%
Short-term 66 100.0% 2,100 4.3%
- ------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 66 100.0% $ 48,889 100.0%
- ------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
- -----------------
AAA $ 3,927 16.9% $ 6,160 36.8%
AA 2,643 11.3% 3,126 18.7%
A 7,919 34.0% 3,193 19.1%
BBB 4,977 21.4% 1,876 11.2%
Government 1,903 8.2% 639 3.8%
BB & below 687 2.9% 886 5.3%
Short-term 1,245 5.3% 862 5.1%
- -------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 23,301 100.0% $ 16,742 100.0%
- -------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
- -----------------
AAA $ - - $ 10,087 25.2%
AA - - 5,769 14.4%
A - - 11,112 27.7%
BBB - - 6,853 17.1%
Government 3 100.0% 2,545 6.4%
BB & below - - 1,573 3.9%
Short-term - - 2,107 5.3%
- ------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 3 100.0% $ 40,046 100.0%
- ------------------------------------------------------------------------------------------------------
- 39 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE GENERAL AND GUARANTEED SEPARATE ACCOUNT
COMPOSITION OF INVESTED ASSETS
DECEMBER 31, 2002
- -----------------
LIFE GUARANTEED
LIFE GENERAL ACCOUNT SEPARATE ACCOUNT TOTAL
---------------------------- ----------------------------- ------------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
Fixed maturities, at fair value $ 29,377 86.7% $ 11,085 96.6% $ 40,462 89.2%
Equity securities, at fair value 458 1.3% 45 0.4% 503 1.1%
Policy loans, at outstanding balance 2,934 8.7% - - 2,934 6.5%
Real estate/Mortgage loans, at cost 334 1.0% 113 1.0% 447 1.0%
Other investments 788 2.3% 227 2.0% 1,015 2.2%
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $ 33,891 100.0% $ 11,470 100.0% $ 45,361 100.0%
- ---------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
Fixed maturities, at fair value $ 23,301 82.1% $ 9,842 97.7% $ 33,143 86.2%
Equity securities, at fair value 428 1.5% 48 0.5% 476 1.2%
Policy loans, at outstanding balance 3,317 11.7% - - 3,317 8.6%
Real estate/Mortgage loans, at cost 330 1.2% 26 0.2% 356 0.9%
Other investments 1,001 3.5% 160 1.6% 1,161 3.1%
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $ 28,377 100.0% $ 10,076 100.0% $ 38,453 100.0%
- ---------------------------------------------------------------------------------------------------------------------------------
- 40 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE GENERAL AND GUARANTEED SEPARATE ACCOUNT
FIXED MATURITIES BY TYPE AT FAIR VALUE
DECEMBER 31, 2002
- -----------------
LIFE GUARANTEED
LIFE GENERAL ACCOUNT SEPARATE ACCOUNT TOTAL
----------------------------- ----------------------------- ------------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
Corporate $ 14,596 49.7% $ 6,479 58.5% $ 21,075 52.1%
CMO 691 2.4% 212 1.9% 903 2.2%
Municipal - tax-exempt 2,000 6.8% - - 2,000 4.9%
Gov't/Gov't agencies - U.S. 360 1.2% 333 3.0% 693 1.7%
ABS 3,954 13.5% 1,406 12.7% 5,360 13.3%
Gov't/Gov't agencies - Foreign 526 1.8% 320 2.9% 846 2.1%
MBS - agency 1,851 6.3% 445 4.0% 2,296 5.7%
Commercial MBS 4,234 14.4% 1,754 15.8% 5,988 14.8%
Municipal - taxable 31 0.1% 83 0.7% 114 0.3%
Redeemable preferred stock 34 0.1% - - 34 0.1%
Short-term 1,100 3.7% 53 0.5% 1,153 2.8%
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 29,377 100.0% $ 11,085 100.0% $ 40,462 100.0%
- -------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
- -----------------
Corporate $ 11,419 49.0% $ 5,775 58.7% $ 17,194 52.0%
CMO 767 3.3% 209 2.1% 976 2.9%
Municipal - tax-exempt 1,565 6.7% - - 1,565 4.7%
Gov't/Gov't agencies - U.S. 374 1.6% 364 3.7% 738 2.2%
ABS 3,427 14.7% 1,140 11.6% 4,567 13.8%
Gov't/Gov't agencies - Foreign 390 1.7% 248 2.5% 638 1.9%
MBS - agency 981 4.2% 210 2.1% 1,191 3.6%
Commercial MBS 3,029 13.0% 1,592 16.2% 4,621 13.9%
Municipal - taxable 47 0.2% 79 0.8% 126 0.4%
Redeemable preferred stock 57 0.3% - - 57 0.2%
Short-term 1,245 5.3% 225 2.3% 1,470 4.4%
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 23,301 100.0% $ 9,842 100.0% $ 33,143 100.0%
- -------------------------------------------------------------------------------------------------------------------------------
- 41 -
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
LIFE GENERAL AND GUARANTEED SEPARATE ACCOUNT
FIXED MATURITIES ASSET QUALITY
DECEMBER 31 2002
- ----------------
LIFE GUARANTEED
LIFE GENERAL ACCOUNT SEPARATE ACCOUNT TOTAL
--------------------------------- -------------------------------- ---------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
AAA $ 5,495 18.7% $ 1,465 13.2% $ 6,960 17.2%
AA 3,284 11.2% 1,112 10.0% 4,396 10.9%
A 8,766 29.8% 3,701 33.4% 12,467 30.8%
BBB 6,546 22.3% 3,119 28.1% 9,665 23.9%
Government 2,786 9.5% 951 8.6% 3,737 9.2%
BB & below 1,400 4.8% 684 6.2% 2,084 5.2%
Short-term 1,100 3.7% 53 0.5% 1,153 2.8%
- ------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 29,377 100.0% $ 11,085 100.0% $ 40,462 100.0%
- ------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2001
- -----------------
AAA $ 3,927 16.9% $ 1,143 11.6% $ 5,070 15.3%
AA 2,643 11.3% 1,001 10.2% 3,644 11.0%
A 7,919 34.0% 3,609 36.6% 11,528 34.8%
BBB 4,977 21.4% 2,667 27.1% 7,644 23.1%
Government 1,903 8.2% 736 7.5% 2,639 8.0%
BB & below 687 2.9% 461 4.7% 1,148 3.4%
Short-term 1,245 5.3% 225 2.3% 1,470 4.4%
- ------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED MATURITIES $ 23,301 100.0% $ 9,842 100.0% $ 33,143 100.0%
- ------------------------------------------------------------------------------------------------------------------------
- 42 -