HARTFORD FINANCIAL SERVICES GROUP, INC. - FORM 8-K - EX-99.1

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8-K - 8-K - HARTFORD FINANCIAL SERVICES GROUP, INC.	d317902d8k.htm

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Impacts of Adoption of Accounting Standards Update No. 2010-26

The summary financial information contained herein reflects The Hartford Financial Services Group, Inc.’s retrospective adoption, effective January 1, 2012, of Accounting Standards Update No. 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts” (“ASU 2010-26”), and other supplemental changes to the presentation of information for fiscal years ended December 31, 2011 and 2010.

As a result of the ASU 2010-26 accounting change, total stockholders’ equity as of January 1, 2010, decreased by approximately $1.7 billion, after-tax from $17.9 billion, as previously reported, to $16.2 billion primarily due to a reduction of the Company’s deferred acquisition cost (“DAC”) asset balance.

All amounts in this Investor Financial Supplement for prior reporting periods related to the adoption of ASU 2010-26 have been revised accordingly. The impact of adoption of this revised accounting standard on the Company’s Consolidated Balance Sheet and Consolidated Statement of Operations is summarized below. For comparative purposes, the Investor Financial Supplement originally provided in connection with the earnings release for the year ended December 31, 2011 remains available at ir.thehartford.com.


	YEAR ENDED DECEMBER 31,
	2010			2011
Impacts to Total Stockholders’ Equity
Stockholders’ equity as previously reported	$	20,311		$	22,910
Impact of adoption of ASU 2010-26 on stockholders’ equity		(1,557	)		(1,424	)

Stockholders’ equity as currently reported	$	18,754		$	21,486
Impacts to Net Income
Net income as previously reported	$	1,680		$	662
Impact of adoption of ASU 2010-26 on net income		(44	)		50

Net income as currently reported	$	1,636		$	712
Impacts to Core Earnings [1]
Core earnings as previously reported	$	1,972		$	970
Impact of adoption of ASU 2010-26 on core earnings		(7	)		7

Core earnings as currently reported	$	1,965		$	977

[1]

Denotes financial measure not calculated based on generally accepted accounting principles (“non-GAAP”). More information is provided in the discussion of Non-GAAP and other financial measures section contained herein. A reconciliation of core earnings to net income as of December 31, 2011 and 2010, is included on page 2.

LOGO

INVESTOR FINANCIAL SUPPLEMENT

March 23, 2012

Revised for the effects of the Adoption of ASU No. 2010-26

THE HARTFORD FINANCIAL SERVICES GROUP, INC.


	As of March 21, 2012
Address:		A.M. Best	Fitch	Standard & Poor’s	Moody’s
One Hartford Plaza	*Insurance Financial Strength Ratings:*
Hartford, CT 06155	Hartford Fire Insurance Company	A	A+	A	A2
	Hartford Life Insurance Company	A	A-	A-	A3
Internet address:	Hartford Life and Accident Insurance Company	A	A-	A-	A3
http://www.thehartford.com	Hartford Life and Annuity Insurance Company	A	A-	BBB+	A3

	*Other Ratings:*
Contacts:	The Hartford Financial Services Group, Inc.:
	Senior debt	bbb+	BBB-	BBB	Baa3
Sabra Purtill	Commercial paper	AMB-2	F2	A-2	P-3
Senior Vice President
Investor Relations
Phone (860) 547-8691

Ryan Greenier
Assistant Vice President	TRANSFER AGENT
Investor Relations	The Bank of New York Mellon
Phone (860) 547-8844	BNY Mellon Shareowner Services
	480 Washington Boulevard
Margaret Mann	Jersey City, NJ 07310
Program Assistant	1 (877) 272-7740
Investor Relations
Phone (860) 547-3800

COMMON STOCK

Common stock of The Hartford Financial Services Group, Inc. is traded on the New York Stock Exchange under the symbol “HIG”.

This report is for information purposes only. It should be read in conjunction with documents filed by The Hartford Financial Services Group, Inc. with the U.S. Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTOR FINANCIAL SUPPLEMENT

TABLE OF CONTENTS

Basis of Presentation

i, ii, iii

CONSOLIDATED

Consolidated Financial Results

WEALTH

MANAGEMENT

Operating Results

Operating Results by Segment

Financial Highlights Excluding Impact of Unlock

Consolidated Statements of Operations

Deferred Policy Acquisition Costs and Present Value of Future Profits

Consolidating Balance Sheets

Individual Annuity

Capital Structure

Income Statements

Statutory Surplus to GAAP Stockholders’ Equity Reconciliation

Individual Life

Accumulated Other Comprehensive Loss

Income Statements

Computation of Basic and Diluted Earnings (Losses) Per Common Share

Retirement Plans

Analysis of Net Realized Capital Gains (Losses) After-tax and DAC

Income Statements

Computation of Return-on-Equity Measures

Supplemental Data

Assets Under Management

Mutual Funds

COMMERCIAL

Income Statements

MARKETS

Property & Casualty Commercial

Operating Results

RUNOFF

Financial Highlights

Underwriting Results

OPERATIONS

Supplemental Data

Life Other Operations - Account Value Data

Group Benefits

Life Other Operations - DAC rollforward

Income Statements

Supplemental Data

INVESTMENTS

Investment Earnings Before-tax

CONSUMER

Income Statements

Consolidated

MARKETS

Operating Results

Life

Underwriting Results

Property & Casualty

Written and Earned Premiums

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION

•

All amounts are in millions, except for per share and ratio information unless otherwise stated.

•

The Company is currently focused on a customer-oriented strategy and is organized around four divisions: Commercial Markets, Consumer Markets, Wealth Management and Runoff Operations. A Runoff Operations division was formed for 2011 segment reporting to reflect the manner in which the Company is currently organized for purposes of making operating decisions and assessing performance. The Runoff Operations division consists of two new reporting segments, Life Other Operations and Property & Casualty Other Operations. Segment data for prior reporting periods has been adjusted accordingly. As a result, the Company conducts business principally in nine reporting segments.

•

The Commercial Markets division consists of the reporting segments of Property & Casualty Commercial and Group Benefits. Property & Casualty Commercial provides workers’ compensation, property, automobile, marine, livestock, liability and umbrella coverages, primarily throughout the United States (“U.S.”), along with a variety of customized insurance products and risk management services including professional liability, fidelity, surety, and specialty casualty coverages. Group Benefits provides employers, associations, affinity groups and financial institutions with group life, accident and disability coverage, along with other products and services, including voluntary benefits and group retiree health.

•

Consumer Markets provides standard automobile, homeowners and home-based business coverages to individuals across the U.S., including a special program designed exclusively for members of AARP. Consumer Markets also operates a member contact center for health insurance products offered through the AARP Health program.

•

The Wealth Management division includes the reporting segments of Individual Annuity, Individual Life, Retirement Plans and Mutual Funds. Individual Annuity offers individual variable, fixed market value adjusted, fixed index and single premium immediate annuities in the U.S. Individual Life sells a variety of life insurance products, including variable universal life, universal life, and term life. Retirement Plans provides products and services to corporations pursuant to Section 401(k)of the Internal Revenue Code of 1986, as amended (the “Code”) and products and services to municipalities and not-for-profit organizations under Sections 457 and 403(b) of the Code, collectively referred to as government plans. Mutual Funds offers retail mutual funds, investment-only mutual funds and college savings plans under Section 529 of the Code (collectively referred to as non-proprietary) and proprietary mutual funds supporting insurance products issued by The Hartford.

•

The Runoff Operations division includes the reporting segments of Life Other Operations and Property & Casualty Other Operations. Life Other Operations includes International Annuity, Institutional Annuity, and Private Placement Life Insurance, previously reported in Wealth Management. Property & Casualty Other Operations was previously reported in Corporate and Other.

•

The Hartford includes in Corporate the Company’s debt financing and related interest expense, as well as other capital raising activities; banking operations; certain fee income and commissions expenses associated with sales of non-proprietary products by broker-dealer subsidiaries; and certain purchase accounting adjustments and other charges not allocated to the segments.

•

The balance sheet and certain balance sheet measures incorporated herein are presented in the statutory legal entity views for Life and Property & Casualty. Life consists of the Wealth Management division, Life Other Operations, Group Benefits and an Other category. Property & Casualty consists of the of Property & Casualty Commercial, Property & Casualty Other Operations and the Consumer Markets Division. Corporate primarily includes the Company’s debt financing and related interest expense, as well as other capital raising, banking operations and certain purchase accounting adjustment activities.

•

Certain operating and statistical measures have been incorporated herein to provide supplemental data that indicate current trends in The Hartford’s business. These measures include sales, deposits, net flows, account value, insurance in-force and premium retention. Premium retention is defined as renewal premium written in the current period divided by total premium written in the prior period.

•

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

•

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

•

Accumulated other comprehensive income (“AOCI”) represents net of tax unrealized gain (loss) on available-for-sale securities, other than temporary impairment losses recognized in AOCI, net gain (loss) on cash-flow hedging instruments, foreign currency translation adjustments and pension and other postretirement adjustments.

•

Mutual fund assets are an internal measure of assets under management used by the Company because a portion of revenues are based upon asset levels. Mutual funds assets are not included on the balance sheet.

•

Return on assets (“ROA”) is calculated using annualized earnings divided by a two-point average of assets under management.

•

Assets under management (“AUM”) include account values and mutual funds assets. AUM is a measure used by the Company because a significant portion of the Company’s revenues are based upon asset values. These revenues increase or decrease with a rise or fall in the amount of account value whether caused by changes in capital markets or through net flows.

•

Assets under administration (“AUA”) represents the client asset base of the Company’s recordkeeping business for which revenues are predominately based on the number of plan participants. Unlike assets under management, increases or decreases in assets under administration do not have a direct corresponding increase or decrease to the Company’s revenues.

•

Yields are calculated using annualized net investment income (excluding income related to equity securities, trading) divided by the monthly average invested assets at cost, amortized cost, or adjusted carrying value, as applicable, excluding equity securities, trading, and consolidated variable interest entity non-controlling interests.

•

NM - Not meaningful means increases or decreases greater than or equal to 200%, or changes from a net gain to a net loss position, or vice versa.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

BASIS OF PRESENTATION (CONTINUED)

DISCUSSION OF NON-GAAP AND OTHER FINANCIAL MEASURES

•

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

•

The Hartford uses the non-GAAP financial measure core earnings as an important measure of the Company’s operating performance. The Hartford believes that the measure core earnings provides investors with a valuable measure of the performance of the Company’s ongoing businesses because it reveals trends in our insurance and financial services businesses that may be obscured by including the net effect of certain realized capital gains and losses and discontinued operations. Some realized capital gains and losses are primarily driven by investment decisions and external economic developments, the nature and timing of which are unrelated to the insurance and underwriting aspects of our business. Accordingly, core earnings excludes the effect of all realized gains and losses (net of tax and the effects of deferred policy acquisition costs (“DAC”)) that tend to be highly variable from period to period based on capital market conditions. The Hartford believes, however, that some realized capital gains and losses are integrally related to our insurance operations, so core earnings includes net realized gains and losses such as net periodic settlements on credit derivatives and net periodic settlements on the Japan fixed annuity cross-currency swap. These net realized gains and losses are directly related to an offsetting item included in the income statement such as net investment income. Core earnings is also used by management to assess our operating performance and is one of the measures considered in determining incentive compensation for the Company’s managers. Net income is the most directly comparable GAAP measure. Core earnings should not be considered as a substitute for net income and does not reflect the overall profitability of the Company’s business. Therefore, The Hartford believes that it is useful for investors to evaluate both net income and core earnings when reviewing the Company’s performance. A reconciliation of net income to core earnings for the periods presented herein is set forth on page 2.

•

Core earnings per share is calculated based on the non-GAAP financial measure core earnings. The Hartford believes that the measure core earnings per share provides investors with a valuable measure of the Company’s operating performance for many of the same reasons applicable to its underlying measure, core earnings. Net income per share is the most directly comparable GAAP measure. Core earnings per share should not be considered as a substitute for net income per share and does not reflect the overall profitability of the Company’s business. Therefore, The Hartford believes that it is useful for investors to evaluate both net income per share and core earnings per share when reviewing our performance. A reconciliation of net income per share to core earnings per share for the periods presented herein is set forth on page 8.

•

Written premiums is a statutory accounting financial measure used by The Hartford as an important indicator of the operating performance of the Company’s Property & Casualty Commercial and Consumer Markets operations. Because written premiums represents the amount of premium charged for policies issued, net of reinsurance, during a fiscal period, The Hartford believes it is useful to investors because it reflects current trends in The Hartford’s sale of property and casualty insurance products. Earned premiums, the most directly comparable GAAP measure, represents all premiums that are recognized as revenues during a fiscal period. The difference between written premiums and earned premiums is attributable to the change in unearned premium reserves. A reconciliation of written premiums to earned premiums for Property & Casualty Commercial and Consumer Markets is set forth at pages 12 and 18, respectively.

•

The Hartford’s management evaluates profitability of the Property & Casualty Commercial and Consumer Markets segments primarily on the basis of underwriting results. Underwriting results is a before-tax measure that represents earned premiums less incurred losses, loss adjustment expenses and underwriting expenses. Net income is the most directly comparable GAAP measure. Underwriting results are influenced significantly by earned premium growth and the adequacy of The Hartford’s pricing. Underwriting profitability over time is also greatly influenced by The Hartford’s underwriting discipline, which seeks to manage exposure to loss through favorable risk selection and diversification, its management of claims, its use of reinsurance and its ability to manage its expense ratio, which it accomplishes through economies of scale and its management of acquisition costs and other underwriting expenses. The Hartford believes that underwriting results provides investors with a valuable measure of before-tax profitability derived from underwriting activities, which are managed separately from the Company’s investing activities. A reconciliation of underwriting results to net income for Property & Casualty Commercial and Consumer Markets is set forth at pages 12 and 18, respectively.

•

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

•

ROA, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, and excluding discontinued operations, is a non-GAAP financial measure that the Company uses to evaluate, and believes is an important measure of, segment operating performance. ROA is the most directly comparable U.S. GAAP measure. The Hartford believes that the measure ROA, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, and excluding discontinued operations, provides investors with a valuable measure of the performance of the Company’s on-going businesses because it reveals trends in our businesses that may be obscured by the effect of including net realized gains (losses), net of tax and DAC, excluded from core earnings, and the effect of including discontinued operations. Some realized capital gains and losses are primarily driven by investment decisions and external economic developments, the nature and timing of which are unrelated to insurance aspects of our businesses. Accordingly, these non-GAAP measures exclude the effect of all realized gains and losses that tend to be highly variable from period to period based on capital market conditions. The Hartford believes, however, that some realized capital gains and losses are integrally related to our insurance operations, so ROA, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, and excluding discontinued operations, should include net realized gains and losses on net periodic settlements on the Japan fixed annuity cross-currency swap. These net realized gains and losses are directly related to an offsetting item included in the statement of operations such as net investment income. ROA, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, and excluding discontinued operations, should not be considered as a substitute for ROA and does not reflect the overall profitability of our businesses. Therefore, the Company believes it is important for investors to evaluate both ROA, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, and excluding discontinued operations, and ROA when reviewing the Company’s performance.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

BASIS OF PRESENTATION (CONTINUED)

DISCUSSION OF NON-GAAP AND OTHER FINANCIAL MEASURES

•

After-tax margin, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, is a non-GAAP financial measure that the Company uses to evaluate, and believes is an important measure of, segment operating performance. After-tax margin is the most directly comparable U.S. GAAP measure. The Hartford believes that the measure after-tax margin, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, provides investors with a valuable measure of the performance of the Company’s on-going businesses because it reveals trends in our businesses that may be obscured by the effect of including certain realized gains (losses). Some realized capital gains and losses are primarily driven by investment decisions and external economic developments, the nature and timing of which are unrelated to insurance aspects of our businesses. Accordingly, these non-GAAP measures exclude the effect of all realized gains and losses that tend to be highly variable from period to period based on capital market conditions. The Hartford believes, however, that some realized capital gains and losses are integrally related to our insurance operations, so after-tax margin, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, should include net realized gains and losses on net periodic settlements on credit derivatives. These net realized gains and losses are directly related to an offsetting item included in the statement of operations such as net investment income. After-tax margin, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, should not be considered as a substitute for after-tax margin and does not reflect the overall profitability of our businesses. Therefore, the Company believes it is important for investors to evaluate both after-tax margin, excluding net realized gains (losses), net of tax and DAC, excluded from core earnings, and after-tax margin when reviewing the Company’s performance.

•

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

•

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

•

The Hartford provides different measures of the return on common equity (“ROE”) of the Company. ROE (core earnings last twelve months to common equity, excluding AOCI), is calculated based on non-GAAP financial measures. ROE (core earnings last twelve months to common equity, excluding AOCI) is calculated by dividing (a) core earnings for the prior four fiscal quarters by (b) average common stockholders’ equity, excluding AOCI. When calculating ROE, the Mandatory Convertible preferred stock (“MCP”) is included in average common stockholders’ equity and MCP dividends are added back to net income (loss) available to common shareholders and core earnings (losses) available to common shareholders. The Hartford provides to investors return-on-equity measures based on its non-GAAP core earnings financial measures for the reasons set forth in the related discussion above. The Hartford excludes AOCI in the calculation of these return-on-equity measures to provide investors with a measure of how effectively the Company is investing the portion of the Company’s net worth that is primarily attributable to the Company’s business operations. ROE (net income last twelve months to common equity, including AOCI) is the most directly comparable GAAP measure. A reconciliation of the non-GAAP return-on-equity measures for the periods presented herein to ROE (net income last twelve months to common equity, including AOCI) is set forth at page 10.

iii

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATED FINANCIAL RESULTS


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	Mar. 31, 2011			Jun. 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	Mar. 31, 2011			Jun. 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011			Change
HIGHLIGHTS
Net income	$	501		$	33		$	60		$	118		$	1,636		$	712			(56	%)
Core earnings	$	574		$	14		$	50		$	339		$	1,965		$	977			(50	%)
Total revenues [1]	$	6,300		$	5,401		$	4,520		$	5,638		$	22,049		$	21,859			(1	%)
Total assets	$	320,987		$	315,957		$	304,188		$	302,609

PER SHARE AND SHARES DATA [2]
Basic earnings per common share
Net income available to common shareholders	$	1.10		$	0.05		$	0.11		$	0.24		$	2.60		$	1.51			(42	%)
Core earnings available to common shareholders	$	1.27		$	0.01		$	0.09		$	0.74		$	3.36		$	2.10			(37	%)
Diluted earnings per common share
Net income available to common shareholders	$	0.99		$	0.05		$	0.11		$	0.23		$	2.40		$	1.40			(42	%)
Core earnings available to common shareholders	$	1.13		$	0.01		$	0.08		$	0.69		$	3.08		$	1.96			(36	%)
Weighted average common shares outstanding (basic)		444.6			445.1			445.3			445.1			431.5			445.0			13.5	sh
Weighted average common shares outstanding and dilutive potential common shares (diluted)		508.2			482.4			473.4			489.6			481.5			478.0			(3.5	) sh
Common shares outstanding		445.1			445.3			445.5			442.5			444.5			442.5			(2.0	) sh
Book value per common share	$	42.44		$	44.02		$	46.70		$	47.30
Per common share impact of AOCI	$	(1.66	)	$	(0.06	)	$	2.59		$	2.83
Book value per common share (excluding AOCI)	$	44.10		$	44.08		$	44.11		$	44.47
Book value per diluted share	$	38.50		$	40.09		$	43.81		$	44.31
Per diluted share impact of AOCI	$	(1.46	)	$	(0.05	)	$	2.37		$	2.58
Book value per diluted share (excluding AOCI)	$	39.96		$	40.14		$	41.44		$	41.73
Common shares outstanding and dilutive potential common shares		505.1			502.8			487.6			484.9

FINANCIAL RATIOS
ROE (net income last 12 months to common stockholder equity including AOCI) [3]		10.3	%		9.8	%		5.9	%		3.5	%
ROE (core earnings last 12 months to common stockholder equity excluding AOCI) [3]		10.3	%		9.6	%		6.0	%		4.9	%
Debt to capitalization, including AOCI		25.4	%		24.7	%		23.6	%		22.4	%
Annualized investment yield, after-tax		3.2	%		3.1	%		2.9	%		2.8	%		3.1	%		3.0	%		(0.1	)

[1]

Total revenues of The Hartford are impacted by net investment income and mark-to-market effects of equity securities, trading, supporting the international variable annuity business, which have corresponding amounts credited to policyholders within benefits, losses and loss adjustment expenses. See page 3 for the impact to total revenues along with the corresponding amounts in benefits, losses and loss adjustment expenses in the three months ended December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively.

[2]	See page 8 for computation of basic and diluted earnings (losses) per common share.

[3]	See page 10 for a computation of ROE measures.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

OPERATING RESULTS BY SEGMENT

(A reconciliation of core earnings (losses) to net income (loss) for each of the segments is set forth on the respective segment pages contained in this supplement.)


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			YEAR ENDED DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
Property & Casualty Commercial	$	177		$	96		$	87		$	29		$	1,003		$	389			(61	%)
Group Benefits		19			30			20			17			161			86			(47	%)

Commercial Markets core earnings		196			126			107			46			1,164			475			(59	%)
Consumer Markets core earnings (losses)		111			(177	)		(10	)		85			127			9			(93	%)
Individual Annuity		151			150			(73	)		161			540			389			(28	%)
Individual Life		36			41			(20	)		36			180			93			(48	%)
Retirement Plans		11			11			(20	)		—			27			2			(93	%)
Mutual Funds		27			27			24			20			94			98			4	%

Wealth Management core earnings (losses)		225			229			(89	)		217			841			582			(31	%)
ONGOING OPERATIONS		532			178			8			348			2,132			1,066
Life Other Operations		98			86			116			45			262			345			32	%
P&C Other Operations		23			(167	)		9			16			(69	)		(119	)		(72	%)

Runoff Operations core earnings (losses)		121			(81	)		125			61			193			226			17	%
Corporate core losses		(79	)		(83	)		(83	)		(70	)		(360	)		(315	)		12	%

CONSOLIDATED
Core earnings		574			14			50			339			1,965			977			(50	%)
Add: Income (loss) from discontinued operations		162			(80	)		3			1			(64	)		86			NM
Add: Net realized capital gains (losses), net of tax and DAC, excluded from core earnings [1]		(235	)		99			7			(222	)		(265	)		(351	)		(32	%)

Net income	$	501		$	33		$	60		$	118		$	1,636		$	712			(56	%)

PER SHARE DATA [2]
Diluted earnings per common share
Core earnings available to common shareholders	$	1.13		$	0.01		$	0.08		$	0.69		$	3.08		$	1.96			(36	%)
Net income available to common shareholders	$	0.99		$	0.05		$	0.11		$	0.23		$	2.40		$	1.40			(42	%)

DAC unlock IMPACT ON CORE EARNINGS BY SEGMENT
Individual Annuity	$	43		$	(4	)	$	(163	)	$	69		$	137		$	(55	)		NM
Individual Life		(2	)		(1	)		(57	)		2			19			(58	)		NM
Retirement Plans		2			(2	)		(24	)		(1	)		8			(25	)		NM
Life Other Operations		13			(10	)		37			(25	)		(46	)		15			NM

DAC unlock impact on core earnings		56			(17	)		(207	)		45			118			(123	)		NM
Add: Net realized capital gains (losses), net of tax and DAC, excluded from core earnings		1			(49	)		(262	)		(40	)		(21	)		(350	)		NM
Add: Loss from discontinued operations		—			—			—			—			(4	)		—			100	%

DAC unlock impact on net income	$	57		$	(66	)	$	(469	)	$	5		$	93		$	(473	)		NM

[1]	Includes those net realized capital gains (losses) excluded from core earnings (losses). See page 9 for further analysis.

[2]	See page 8 for the reconciliation of net income per common share to core earnings per common share.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			YEAR ENDED DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
Earned premiums	$	3,519		$	3,545		$	3,518		$	3,506		$	14,055		$	14,088			—
Fee income		1,209			1,219			1,192			1,130			4,748			4,750			—
Net investment income (loss):
Securities available-for-sale and other		1,108			1,104			1,062			998			4,364			4,272			(2	%)
Equity securities, trading [1]		803			(597	)		(1,890	)		325			(774	)		(1,359	)		(76	%)

Total net investment income (loss)		1,911			507			(828	)		1,323			3,590			2,913			(19	%)
Realized capital gains (losses):
Total other-than-temporary impairment (“OTTI”) losses		(119	)		(31	)		(71	)		(42	)		(852	)		(263	)		69	%
OTTI losses recognized in other comprehensive income		64			8			11			6			418			89			(79	%)

Net OTTI losses recognized in earnings		(55	)		(23	)		(60	)		(36	)		(434	)		(174	)		60	%
Net realized capital gains (losses), excluding OTTI losses recognized in earnings		(348	)		92			635			(350	)		(177	)		29			NM

Total net realized capital gains (losses)		(403	)		69			575			(386	)		(611	)		(145	)		76	%
Other revenues		64			61			63			65			267			253			(5	%)

Total revenues		6,300			5,401			4,520			5,638			22,049			21,859			(1	%)
Benefits, losses and loss adjustment expenses		3,178			3,976			4,006			3,465			13,025			14,625			12	%
Benefits, losses and loss adjustment expenses - returns credited on international variable annuities [1]		803			(597	)		(1,889	)		324			(774	)		(1,359	)		(76	%)
Amortization of deferred policy acquisition costs and present value of future profits		450			592			1,005			397			1,692			2,444			44	%
Insurance operating costs and other expenses		1,354			1,452			1,287			1,217			5,326			5,310			—
Interest expense		128			128			128			124			508			508			—
Goodwill impairment		—			—			—			30			—			30			NM

Total benefits and expenses		5,913			5,551			4,537			5,557			19,777			21,558			9	%
Income (loss) from continuing operations before income taxes		387			(150	)		(17	)		81			2,272			301			(87	%)
Income tax expense (benefit)		48			(263	)		(74	)		(36	)		572			(325	)		NM

Income (loss) from continuing operations, net of tax		339			113			57			117			1,700			626			(63	%)
Income (loss) from discontinued operations, net of tax		162			(80	)		3			1			(64	)		86			NM

Net income		501			33			60			118			1,636			712			(56	%)
Less: Income (loss) from discontinued operations, net of tax		162			(80	)		3			1			(64	)		86			NM
Less: Net realized capital gains (losses), net of tax and DAC, excluded from core earnings		(235	)		99			7			(222	)		(265	)		(351	)		(32	%)

Core earnings	$	574		$	14		$	50		$	339		$	1,965		$	977			(50	%)

[1]	Includes investment income and mark-to-market effects of equity securities, trading, supporting the international variable annuity business, which are classified in net investment income with corresponding amounts credited to policyholders within benefits, losses and loss adjustment expenses.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSOLIDATING BALANCE SHEETS

AS OF DECEMBER 31, 2010 AND DECEMBER 31, 2011


	LIFE [1]							PROPERTY & CASUALTY [1]								CORPORATE [1]									CONSOLIDATED
	Dec. 31, 2010		Dec. 31, 2011		Change			Dec. 31, 2010			Dec. 31, 2011		Change			Dec. 31, 2010			Dec. 31, 2011			Change			Dec. 31, 2010			Dec. 31, 2011		Change
Investments
Fixed maturities, available-for-sale, at fair value	$	52,429	$	55,633		6	%	$	25,114		$	26,023		4	%	$	277		$	153			(45	%)	$	77,820		$	81,809		5	%
Fixed maturities, at fair value using the fair value option		639		1,317		106	%		10			11		10	%		—			—			—			649			1,328		105	%
Equity securities, trading, at fair value		32,820		30,499		(7	%)		—			—		—			—			—			—			32,820			30,499		(7	%)
Equity securities, available-for-sale, at fair value		502		515		3	%		374			302		(19	%)		97			104			7	%		973			921		(5	%)
Mortgage loans		3,915		4,979		27	%		372			749		101	%		202			—			(100	%)		4,489			5,728		28	%
Policy loans, at outstanding balance		2,181		2,001		(8	%)		—			—		—			—			—			—			2,181			2,001		(8	%)
Limited partnerships and other alternative investments		957		1,318		38	%		961			1,214		26	%		—			—			—			1,918			2,532		32	%
Other investments		1,486		2,244		51	%		83			121		46	%		48			29			(40	%)		1,617			2,394		48	%
Short-term investments		5,631		5,641		—			1,117			658		(41	%)		1,780			1,437			(19	%)		8,528			7,736		(9	%)

Total investments		100,560		104,147		4	%		28,031			29,078		4	%		2,404			1,723			(28	%)		130,995			134,948		3	%
Cash		1,809		2,377		31	%		250			203		(19	%)		3			1			(67	%)		2,062			2,581		25	%
Premiums receivable and agents’ balances		362		344		(5	%)		2,911			3,102		7	%		—			—			—			3,273			3,446		5	%
Reinsurance recoverables		1,991		2,022		2	%		2,871			2,746		(4	%)		—			—			—			4,862			4,768		(2	%)
Deferred policy acquisition costs and present value of future profits		6,917		6,000		(13	%)		556			556		—			—			—			—			7,473			6,556		(12	%)
Deferred income taxes		2,365		174		(93	%)		1,214			800		(34	%)		973			1,157			19	%		4,552			2,131		(53	%)
Goodwill		470		470		—			149			119		(20	%)		432			417			(3	%)		1,051			1,006		(4	%)
Property and equipment, net		398		388		(3	%)		729			632		(13	%)		23			9			(61	%)		1,150			1,029		(11	%)
Other assets		573		1,070		87	%		952			1,205		27	%		104			(1	)		NM			1,629			2,274		40	%
Separate account assets		159,742		143,870		(10	%)		—			—		—			—			—			—			159,742			143,870		(10	%)

Total assets	$	275,187	$	260,862		(5	%)	$	37,663		$	38,441		2	%	$	3,939		$	3,306			(16	%)	$	316,789		$	302,609		(4	%)

Future policy benefits, unpaid losses and loss adjustment expenses		18,573		19,466		5	%		21,025			21,550		2	%		—			—			—		$	39,598		$	41,016		4	%
Other policyholder funds and benefits payable		44,550		45,612		2	%		—			—		—			—			—			—			44,550			45,612		2	%
Other policyholder funds and benefits payable - International variable annuities		32,793		30,461		(7	%)		—			—		—			—			—			—			32,793			30,461		(7	%)
Unearned premiums		173		182		5	%		5,005			5,041		1	%		(2	)		(1	)		50	%		5,176			5,222		1	%
Debt		—		—		—			—			—		—			6,607			6,216			(6	%)		6,607			6,216		(6	%)
Consumer notes		382		314		(18	%)		—			—		—			—			—			—			382			314		(18	%)
Other liabilities		5,604		5,152		(8	%)		1,756			1,831		4	%		1,827			1,429			(22	%)		9,187			8,412		(8	%)
Separate account liabilities		159,742		143,870		(10	%)		—			—		—			—			—			—			159,742			143,870		(10	%)

Total liabilities		261,817		245,057		(6	%)		27,786			28,422		2	%		8,432			7,644			(9	%)		298,035			281,123		(6	%)

Common equity, excluding AOCI		13,138		13,943		6	%		9,920			9,393		(5	%)		(3,870	)		(3,657	)		6	%		19,188			19,679		3	%
Preferred stock		—		—		—			—			—		—			556			556			—			556			556		—
AOCI, net of tax		232		1,862		NM			(43	)		626		NM			(1,179	)		(1,237	)		(5	%)		(990	)		1,251		NM

Total stockholders’ equity		13,370		15,805		18	%		9,877			10,019		1	%		(4,493	)		(4,338	)		3	%		18,754			21,486		15	%
Total liabilities and equity	$	275,187	$	260,862		(5	%)	$	37,663		$	38,441		2	%	$	3,939		$	3,306			(16	%)	$	316,789		$	302,609		(4	%)

[1]	Please refer to the basis of presentation on page i for a description of Life, Property & Casualty and Corporate.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CAPITAL STRUCTURE


																Year Over Year 3 Month Change			Sequential 3 Month Change
	THREE MONTHS ENDED
	Dec. 31, 2010			Mar. 31, 2011			Jun. 30, 2011			Sept. 30, 2011			Dec. 31, 2011
DEBT
Short-term debt (includes current maturities of long-term debt)	$	400		$	400		$	400		$	400		$	—			(100	%)		(100	%)
Senior notes		4,480			4,480			4,480			4,480			4,481			—			—
Junior subordinated debentures		1,727			1,730			1,734			1,737			1,735			—			—

Total debt [1]	$	6,607		$	6,610		$	6,614		$	6,617		$	6,216			(6	%)		(6	%)

STOCKHOLDERS’ EQUITY
Common stockholders’ equity, excluding AOCI, net of tax	$	19,188		$	19,629		$	19,627		$	19,651		$	19,679			3	%		—
Preferred stock		556			556			556			556			556			—			—
AOCI, net of tax		(990	)		(738	)		(25	)		1,155			1,251			NM			8	%

Total stockholders’ equity	$	18,754		$	19,447		$	20,158		$	21,362		$	21,486			15	%		1	%

CAPITALIZATION
Total capitalization, including AOCI, net of tax	$	25,361		$	26,057		$	26,772		$	27,979		$	27,702			9	%		(1	%)
Total capitalization, excluding AOCI, net of tax	$	26,351		$	26,795		$	26,797		$	26,824		$	26,451			—			(1	%)

DEBT TO CAPITALIZATION RATIOS [1]
Total debt to capitalization, including AOCI		26.1	%		25.4	%		24.7	%		23.6	%		22.4	%		(3.7	)		(1.2	)
Total debt to capitalization, excluding AOCI		25.1	%		24.7	%		24.7	%		24.7	%		23.5	%		(1.6	)		(1.2	)
Total rating agency adjusted debt to capitalization [2] [3]		30.2	%		29.5	%		28.6	%		27.4	%		26.5	%		(3.7	)		(0.9	)

[1]	The Hartford excludes consumer notes from total debt for capital structure analysis. Consumer notes were $382, $382, $368, $349 and $314 as of December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively.

[2]

Reflects a rating agency assignment in the leverage calculation of an estimate of the adjusted unfunded pension liability of the Company’s defined benefit plans and six times the Company’s rental expense on operating leases for total adjustments of $1.5 billion, $1.6 billion, $1.5 billion, $1.5 billion and $1.6 billion for the three months ended December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively.

[3]	Reflects 25% equity credit for the junior subordinated debentures and the discount value of the Allianz transaction. Reflects 100% equity credit for the MCP stock.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

STATUTORY SURPLUS TO GAAP STOCKHOLDERS’ EQUITY RECONCILIATION


	December 31, 2011			December 31, 2010
P&C U.S. Statutory Net Income [1]	$	514		$	1,477
Life U.S. Statutory Net Loss [1]	$	(1,272	)	$	(140	)
P&C U.S. Statutory Capital and Surplus [1]	$	7,412		$	7,721
GAAP Adjustments
Deferred policy acquisition costs		556			556
Benefit reserves		(59	)		(70	)
GAAP unrealized losses on investments, net of tax		641			(57	)
Goodwill		119			149
Non-admitted assets		1,081			1,247
Other, net		269			331

P&C GAAP Stockholders’ Equity	$	10,019		$	9,877

Life U.S. Statutory Capital and Surplus [1]	$	7,388		$	7,731
GAAP Adjustments
Investment in subsidiaries		3,748			2,699
Deferred policy acquisition costs		6,000			6,917
Deferred taxes		(1,542	)		(197	)
Benefit reserves		(2,991	)		(4,097	)
Unrealized losses on investments, net of impairments		2,472			306
Asset valuation reserve and interest maintenance reserve		816			420
Goodwill		470			461
Other, net		(556	)		(870	)

Life GAAP Stockholders’ Equity	$	15,805		$	13,370

[1]	Please refer to the basis of presentation on page i for a description of Life and Property & Casualty.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)


	THREE MONTHS ENDED															Year Over Year 3 Month Change			Sequential 3 Month Change
	THREE MONTHS ENDED
	Dec. 31, 2010			Mar. 31, 2011			Jun. 30, 2011			Sept. 30, 2011			Dec. 31, 2011
Fixed maturities net unrealized gain (loss)	$	(530	)	$	(262	)	$	324		$	1,313		$	1,599			NM			22	%
Equities net unrealized gain (loss)		(26	)		28			7			(68	)		(88	)		NM			(29	%)
Other-than-temporary impairment losses recognized in AOCI		(108	)		(103	)		(107	)		(97	)		(99	)		8	%		(2	%)
Net deferred gain on cash-flow hedging instruments		385			317			388			542			516			34	%		(5	%)

Total net unrealized gain (loss)		(279	)		(20	)		612			1,690			1,928			NM			14	%
Foreign currency translation adjustments		467			438			493			571			574			23	%		1	%
Pension and other postretirement adjustment		(1,178	)		(1,156	)		(1,130	)		(1,106	)		(1,251	)		(6	%)		(13	%)

Total accumulated other comprehensive income (loss)	$	(990	)	$	(738	)	$	(25	)	$	1,155		$	1,251			NM			8	%

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPUTATION OF BASIC AND DILUTED EARNINGS (LOSSES) PER COMMON SHARE


	THREE MONTHS ENDED											YEAR ENDED DECEMBER 31,
	Mar. 31, 2011			Jun. 30, 2011			Sept. 30, 2011		Dec. 31, 2011			2010			2011
Numerator:
Net income	$	501		$	33		$	60	$	118		$	1,636		$	712
Less: MCP dividends		10			11			10		11			33			42
Less: Capital Purchase Program (“CPP”) preferred dividends and accretion of discount		—			—			—		—			482			—

Net income (loss) available to common shareholders		491			22			50		107			1,121			670
Add: Impact of assumed conversion of preferred shares to common [4]		10			—			—		—			33			—

Net income (loss) available to common shareholders and assumed conversion of preferred shares		501			22			50		107			1,154			670
Net income (loss) available to common shareholders		491			22			50		107			1,121			670
Less: Net realized capital gains (losses), net of tax and DAC, excluded from core earnings [1]		(235	)		99			7		(222	)		(265	)		(351	)
Less: Income (loss) from discontinued operations		162			(80	)		3		1			(64	)		86

Core earnings available to common shareholders		564			3			40		328			1,450			935
Add: Impact of assumed conversion of preferred shares to common [4]		10			—			—		11			33			—

Core earnings available to common shareholders and assumed conversion of preferred shares	$	574		$	3		$	40	$	339		$	1,483		$	935
Denominator:
Weighted average common shares outstanding (basic)		444.6			445.1			445.3		445.1			431.5			445.0
Dilutive effect of stock compensation		1.8			1.0			0.7		0.7			1.3			1.1
Dilutive effect of CPP Warrants [2]		34.0			32.9			27.4		23.1			31.3			29.3
Dilutive effect of Allianz warrants [3]		7.1			3.4			—		—			1.0			2.6

Weighted average common shares outstanding and dilutive potential common shares (diluted), before assumed conversion of preferred shares		487.5			482.4			473.4		468.9			465.1			478.0
Dilutive effect of assumed conversion of MCP [4]		20.7			—			—		20.7			16.4			—

Weighted average common shares outstanding and dilutive potential common shares (diluted) and assumed conversion of preferred shares		508.2			482.4			473.4		489.6			481.5			478.0
Basic earnings (losses) per common share
Net income available to common shareholders	$	1.10		$	0.05		$	0.11	$	0.24		$	2.60		$	1.51
Less: Net realized capital gains (losses), net of tax and DAC, excluded from core earnings		(0.53	)		0.22			0.02		(0.50	)		(0.61	)		(0.78	)
Less: Income (loss) from discontinued operations		0.36			(0.18	)		—		—			(0.15	)		0.19

Core earnings available to common shareholders	$	1.27		$	0.01		$	0.09	$	0.74		$	3.36		$	2.10
Diluted earnings (losses) per common share [5]
Net income available to common shareholders	$	1.01		$	0.05		$	0.11	$	0.23		$	2.41		$	1.40
Add: Impact of assumed conversion of preferred shares to common [4]		(0.02	)		—			—		—			(0.01	)		—

Net income available to common shareholders and assumed conversion of preferred shares	$	0.99		$	0.05		$	0.11	$	0.23		$	2.40		$	1.40
Net income available to common shareholders	$	1.01		$	0.05		$	0.11	$	0.23		$	2.41		$	1.40
Less: Net realized capital gains (losses), net of tax and DAC, excluded from core earnings		(0.46	)		0.20			0.02		(0.47	)		(0.58	)		(0.74	)
Less: Income (loss) from discontinued operations		0.31			(0.16	)		0.01		—			(0.13	)		0.18

Core earnings available to common shareholders		1.16			0.01			0.08		0.70			3.12			1.96
Add: Impact of assumed conversion of preferred shares to common [4]		(0.03	)		—			—		(0.01	)		(0.04	)		—

Core earnings available to common shareholders and assumed conversion of preferred shares		1.13			0.01			0.08		0.69			3.08			1.96

[1]	See pages 11 and 12 for disclosure of the components of net realized capital gains (losses), net of tax and DAC, for the periods presented herein.

[2]

The Hartford issued 52.1 million warrants to purchase The Hartford Common Stock to the U.S. Department of the Treasury on June 26, 2009 at a strike price of $9.79. The declaration of a quarterly common stock dividend of $0.10 during the third quarter of 2011 triggered a provision in The Hartford’s Warrant Agreement with The Bank of New York Mellon resulting in an adjustment to the warrant exercise price to $9.699 from $9.729.

[3]	The Hartford issued 69.4 million warrants to purchase The Hartford Common Stock to Allianz on October 17, 2008 at a strike price of $25.23.

[4]

The Hartford issued $575 of mandatory convertible preferred stock which, at June 30, 2011 and September 30, 2011, would have been convertible into 20.7 million and 20.8 million weighted average shares of common stock, respectively. However, the impact of applying the “if-converted” method to these shares was anti-dilutive and, therefore, the shares were not included in core earnings available to common shareholders and assumed conversion of preferred shares. Additionally, at December 31, 2011 the shares were not included in net income available to common shareholders and assumed conversion of preferred shares. At December 31, 2011 the mandatory convertible preferred stock would have been convertible into 20.7 million weighted average shares of common stock.

[5]	As a result of anti-dilutive impact, in periods of a loss, weighted average common shares outstanding (basic) are used in the calculation of diluted earnings per share.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

ANALYSIS OF NET REALIZED CAPITAL GAINS (LOSSES) AFTER-TAX AND DAC


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	Mar. 31, 2011			Jun. 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011			Change
Net Realized Capital Gains (Losses), After-Tax and DAC
Gains (losses) on sales, net	$	(48	)	$	174		$	52		$	68		$	130		$	246			89	%
Net impairment losses		(30	)		(14	)		(35	)		(35	)		(229	)		(114	)		50	%
Japanese fixed annuity contract hedges, net		(11	)		4			5			4			18			2			(89	%)
Results of variable annuity hedge program
U.S. GMWB derivatives, net		22			(19	)		(167	)		(74	)		81			(238	)		NM
U.S. macro hedge		(28	)		(58	)		12			(69	)		(114	)		(143	)		(25	%)

Total U.S. Program		(6	)		(77	)		(155	)		(143	)		(33	)		(381	)		NM
International program		(152	)		67			346			(92	)		(40	)		169			NM

Total results of variable annuity hedge program		(158	)		(10	)		191			(235	)		(73	)		(212	)		(190	%)
Other net gain (loss) [1]		12			(54	)		(202	)		(21	)		(36	)		(265	)		NM

Total net realized captial gains (losses), after-tax and DAC		(235	)		100			11			(219	)		(190	)		(343	)		(81	%)

Reconciliation of Net Realized Capital Gains (Losses), net of tax and DAC, excluded from Core Earnings to Total Net Realized Capital Gains (Losses)—After-Tax and DAC
Total net realized capital gains (losses)	$	(235	)	$	100		$	11		$	(219	)	$	(190	)	$	(343	)		(81	%)
Less: total net realized capital gains included in core earnings (losses)		—			1			4			3			75			8			(89	%)

Total net realized capital gains (losses) after tax and DAC, excluded from core earnings	$	(235	)	$	99		$	7		$	(222	)	$	(265	)	$	(351	)		(32	%)

[1]	Other net gain (loss) primarily represents income from derivatives that qualify for hedge accounting and hedge fixed maturities.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMPUTATION OF RETURN-ON-EQUITY MEASURES


	THREE MONTHS ENDED
	Dec. 31, 2010			Mar. 31, 2011			Jun. 30, 2011			Sept. 30, 2011			Dec. 31, 2011
Numerator [1]:
Net income available to common shareholders—last 12 months	$	1,154		$	1,836		$	1,774		$	1,208		$	712
Core earnings available to common shareholders—last 12 months	$	1,483		$	2,001		$	1,802		$	1,173		$	977
Denominator [2]:
Average common stockholders’ equity, including AOCI		17,469.0			17,827.5			18,079.0			20,387.0			20,120.0
Less: Average AOCI		(2,231.0	)		(1,602.7	)		(720.6	)		708.2			130.5

Average common stockholders’ equity, excluding AOCI		19,700.0			19,430.2			18,799.6			19,678.8			19,989.5
ROE (net income last 12 months to common stockholders’ equity, including AOCI) [3]		6.6	%		10.3	%		9.8	%		5.9	%		3.5	%
ROE (core earnings last 12 months to common stockholders’ equity, excluding AOCI) [3]		7.5	%		10.3	%		9.6	%		6.0	%		4.9	%

[1]	For a reconciliation of net income to core earnings, see page 8.

[2]	Average equity is calculated by taking the sum of common stockholders’ equity at the beginning of the twelve month period and common stockholders’ equity at the end of the twelve month period and dividing by 2.

[3]	When calculating return-on-equity, the MCP preferred stock is included in average common stockholders’ equity and MCP preferred dividends are added back to net income available to common shareholders and core earnings available to common shareholders.

COMMERCIAL MARKETS

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL MARKETS

INCOME STATEMENTS


	THREE MONTHS ENDED												YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			DECEMBER 31,
	2011			2011			2011			2011			2010		2011			Change
Earned premiums	$	2,526		$	2,579		$	2,553		$	2,554		$	9,968	$	10,212			2	%
Fee income		16			14			16			16			54		62			15	%
Net investment income		346			345			319			311			1,364		1,321			(3	%)
Other revenues		23			26			28			20			96		97			1	%
Net realized capital gains (losses)		(37	)		23			(45	)		6			49		(53	)		NM

Total revenues		2,874			2,987			2,871			2,907			11,531		11,639			1	%
Losses and loss adjustment expenses		1,830			1,997			1,983			2,080			6,701		7,890			18	%
Amortization of deferred policy acquisition costs		237			239			238			238			945		952			1	%
Insurance operating costs and other expenses		592			580			567			522			2,222		2,261			2	%
Goodwill impairment		—			—			—			30			—		30			—

Total benefits and expenses		2,659			2,816			2,788			2,870			9,868		11,133			13	%
Income from continuing operations before income taxes		215			171			83			37			1,663		506			(70	%)
Income tax expense (benefit) [1]		41			9			3			(15	)		480		38			(92	%)

Income from continuing operations, net of tax		174			162			80			52			1,183		468			(60	%)
Income (loss) from discontinued operations, net of tax		160			(3	)		(2	)		(5	)		12		150			NM

Net income		334			159			78			47			1,195		618			(48	%)
Less: Income (loss) from discontinued operations, net of tax		160			(3	)		(2	)		(5	)		12		150			NM
Less: Net realized capital gains (losses), after-tax, excluded from core earnings [1]		(22	)		36			(27	)		6			19		(7	)		NM

Core earnings	$	196		$	126		$	107		$	46		$	1,164	$	475			(59	%)

[1]	The three months ended June 30, 2011 includes a benefit of $21, related to the release of a tax valuation allowance.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL MARKETS

PROPERTY & CASUALTY COMMERCIAL

OPERATING RESULTS


	THREE MONTHS ENDED												YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
UNDERWRITING RESULTS
Written premiums	$	1,645		$	1,498		$	1,551		$	1,482		$	5,796		$	6,176			7	%
Change in unearned premium reserve		147			(19	)		(2	)		(77	)		52			49			(6	%)

Earned premiums		1,498			1,517			1,553			1,559			5,744			6,127			7	%
Losses and loss adjustment expenses
Current accident year before catastrophes [1]		962			950			1,085			1,142			3,579			4,139			16	%
Current accident year catastrophes		46			166			93			15			152			320			111	%
Prior accident years [2]		(6	)		31			(9	)		109			(361	)		125			NM

Total losses and loss adjustment expenses		1,002			1,147			1,169			1,266			3,370			4,584			36	%
Underwriting expenses [3]		462			460			453			429			1,760			1,804			2	%
Dividends to policyholders [4]		4			4			5			5			5			18			NM

Underwriting results		30			(94	)		(74	)		(141	)		609			(279	)		NM

Net investment income		242			239			217			212			935			910			(3	%)
Periodic net coupon settlements on credit derivatives, before-tax		(2	)		(1	)		(2	)		—			(9	)		(5	)		44	%
Other expenses		(40	)		(34	)		(35	)		(29	)		(138	)		(138	)		—
Goodwill impairment		—			—			—			(30	)		—			(30	)		—
Income tax (expense) benefit		(53	)		(14	)		(19	)		17			(394	)		(69	)		82	%

Core earnings		177			96			87			29			1,003			389			(61	%)
Add: Net realized capital gains (losses), after-tax		(14	)		25			(32	)		8			(8	)		(13	)		(63	%)

Income from continuing operations, net of tax		163			121			55			37			995			376			(62	%)
Add: Income (loss) from discontinued operations, net of tax		160			(3	)		(2	)		(5	)		12			150			NM

Net Income	$	323		$	118		$	53		$	32		$	1,007		$	526			(48	%)

[1]

The three months ended September 30, 2011 included current accident year reserve strengthening of $47 predominantly related to workers compensation business. The three months ended December 31, 2011 included current accident year reserve strengthening of $87 predominantly related to workers compensation business.

[2]	Included within prior accident years development were the following reserve strengthenings (releases):


	THREE MONTHS ENDED											YEAR ENDED
	Mar. 31,			Jun. 30,		Sept. 30,			Dec. 31,			DECEMBER 31,
	2011			2011		2011			2011			2010			2011
Auto liability		(1	)		—		(4	)		1			(54	)		(4	)
Workers’ compensation		(1	)		4		7			161			(70	)		171
Package Business		(7	)		3		(42	)		(30	)		(19	)		(76	)
General Liability		6			6		(8	)		(44	)		(108	)		(40	)
Professional Liability		(9	)		2		29			7			(88	)		29
Discount accretion on workers’ compensation		7			10		15			6			26			38
Other reserve re-estimates, net		(1	)		6		(6	)		8			(48	)		7

Total prior accident years development		(6	)		31		(9	)		109			(361	)		125

[3]	The year ended December 31, 2010 included taxes, licenses and fees reserve strengthening of $20 due to an increase in the assessment for New York state funds and taxes. The year ended December 31, 2011 included taxes, licenses and fees reserve releases of $12.

[4]	The year ended December 31, 2010 included a decrease in prior year dividends of $12.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL MARKETS

PROPERTY & CASUALTY COMMERCIAL

UNDERWRITING RESULTS


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			YEAR ENDED DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
UNDERWRITING RESULTS	$	30		$	(94	)	$	(74	)	$	(141	)	$	609		$	(279	)		NM
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes [1]		64.3			62.6			69.9			73.3			62.3			67.6			(5.3	)
Current accident year catastrophes		3.0			11.0			6.0			1.0			2.7			5.2			(2.5	)
Prior accident years [2]		(0.4	)		2.1			(0.6	)		7.0			(6.3	)		2.0			(8.3	)

Total losses and loss adjustment expenses		66.9			75.6			75.3			81.2			58.7			74.8			(16.1	)
Expenses		30.8			30.3			29.2			27.5			30.7			29.4			1.3
Policyholder dividends		0.3			0.3			0.3			0.3			0.1			0.3			(0.2	)

Combined ratio		97.9			106.2			104.8			109.0			89.4			104.6			(15.2	)

Catastrophes
Current year		3.0			11.0			6.0			1.0			2.7			5.2			(2.5	)
Prior year		(0.3	)		0.7			0.1			0.3			—			0.2			(0.2	)

Catastrophe ratio		2.7			11.6			6.1			1.3			2.7			5.4			(2.7	)

Combined ratio before catastrophes		95.2			94.5			98.6			107.8			86.7			99.1			(12.4	)
Combined ratio before catastrophes and prior year development		95.3			93.1			99.4			101.1			93.0			97.3			(4.3	)

[1]

The three months ended September 30, 2011 included current accident year reserve strengthening of 3.0 points, predominantly related to workers compensation business. The three months ended December 31, 2011 included current accident year reserve strengthening of 5.6 points, predominantly related to workers compensation business.

[2]	Refer to footnote 2 on page 12 for a summary of reserve strengthenings (releases) that are included within prior accident years development.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL MARKETS

PROPERTY & CASUALTY COMMERCIAL

SUPPLEMENTAL DATA


	THREE MONTHS ENDED												YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
WRITTEN PREMIUMS [1]
Small Commercial	$	755		$	725		$	719		$	688		$	2,651		$	2,887			9	%
Middle Market	$	602		$	537		$	572		$	569		$	2,190		$	2,280			4	%
EARNED PREMIUMS [1]
Small Commercial	$	679		$	692		$	715		$	719		$	2,612		$	2,805			7	%
Middle Market	$	574		$	576		$	587		$	584		$	2,200		$	2,321			5	%
SMALL COMMERCIAL
Combined ratio		91.2			104.1			96.2			101.1			85.9			98.2			(12.3	)
Combined ratio before catastrophes		87.1			85.1			89.8			99.5			82.8			90.5			(7.7	)
Combined ratio before catastrophes and prior year development		87.7			84.4			92.5			92.9			85.5			89.5			(4.0	)
MIDDLE MARKET
Combined ratio		103.9			105.8			109.4			121.0			95.8			110.1			(14.3	)
Combined ratio before catastrophes		101.7			99.2			101.3			119.2			92.8			105.4			(12.6	)
Combined ratio before catastrophes and prior year development		100.9			98.2			103.7			108.9			98.4			102.9			(4.5	)
STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
Renewal Written Price Increases
Small Commercial and Middle Market		3	%		3	%		4	%		5	%		1	%		4	%		3	%
Policy Count Retention
Small Commercial		83	%		83	%		82	%		83	%		84	%		83	%		(1	%)
Middle Market		80	%		79	%		77	%		77	%		80	%		78	%		(2	%)
New Business Premium $
Small Commercial	$	143		$	146		$	135		$	119		$	492		$	543			10	%
Middle Market	$	125		$	107		$	105		$	86		$	474		$	423			(11	%)
Policies in force
Small Commercial		1,145,053			1,165,123			1,172,591			1,170,947
Middle Market		85,442			85,809			84,421			82,695

[1]	The difference between the written premiums and earned premiums is attributable to the change in unearned premium reserve.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL MARKETS

GROUP BENEFITS

INCOME STATEMENTS


	THREE MONTHS ENDED												YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
Earned premiums	$	1,028		$	1,062		$	1,000		$	995		$	4,224		$	4,085			(3	%)
Fee income		16			14			16			16			54			62			15	%
Net investment income		104			106			102			99			429			411			(4	%)
Net realized capital gains (losses)		(14	)		10			6			(5	)		46			(3	)		NM

Total revenues		1,134			1,192			1,124			1,105			4,753			4,555			(4	%)
Benefits, losses and loss adjustment expenses		828			850			814			814			3,331			3,306			(1	%)
Amortization of deferred policy acquisition costs		9			9			9			8			40			35			(13	%)
Insurance operating costs and other expenses [1]		291			286			274			270			1,128			1,121			(1	%)

Total benefits and expenses		1,128			1,145			1,097			1,092			4,499			4,462			(1	%)
Income from continuing operations before income taxes		6			47			27			13			254			93			(63	%)
Income tax expense (benefit)		(5	)		6			2			(2	)		66			1			(98	%)

Net income		11			41			25			15			188			92			(51	%)
Less: Net realized capital gains (losses), after-tax, excluded from core earnings		(8	)		11			5			(2	)		27			6			(78	%)

Core earnings	$	19		$	30		$	20		$	17		$	161		$	86			(47	%)

Earnings Margin (After-tax)
Net Income		1.0	%		3.6	%		2.2	%		1.4	%		4.0	%		2.0	%		(2.0	)
Core earnings		1.7	%		2.6	%		1.8	%		1.5	%		3.5	%		1.9	%		(1.6	)

[1]	The three months ended March 31, 2011 includes a one-time payment to a third-party administrator of $8, before-tax.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

COMMERCIAL MARKETS

GROUP BENEFITS

SUPPLEMENTAL DATA


		THREE MONTHS ENDED												YEAR ENDED
		Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			DECEMBER 31,
		2011			2011			2011			2011			2010			2011			Change
PREMIUMS	Fully Insured - Ongoing Premiums
	Group disability	$	462		$	452		$	452		$	452		$	1,892		$	1,818			(4	%)
	Group life		516			512			501			495			2,052			2,024			(1	%)
	Other		50			49			47			48			222			194			(13	%)

	Total fully insured - ongoing premiums	$	1,028		$	1,013		$	1,000		$	995		$	4,166		$	4,036			(3	%)

	Total buyouts [1]		—			49			—			—			58			49			(16	%)

	Total premiums		1,028			1,062			1,000		$	995			4,224			4,085			(3	%)
	Group disability - premium equivalents [2]		105			107			109			111			394			432			10	%

	Total premiums and premium equivalent	$	1,133		$	1,169		$	1,109		$	1,106		$	4,618		$	4,517			(2	%)

SALES (GROSS	Fully Insured - Ongoing Sales
ANNUALIZED	Group disability	$	109		$	41		$	36		$	33		$	237		$	219			(8	%)
NEW PREMIUMS)	Group life		128			48			53			40			332			269			(19	%)
	Other		7			3			2			5			14			17			21	%

	Total fully insured - ongoing sales		244			92			91			78			583			505			(13	%)


	Total buyouts [1]		—			49			(1	)		—			58			48			(17	%)


	Total sales		244			141			90			78			641			553			(14	%)
	Group disability premium equivalents [2]		47			22			23			14			92			106			15	%

	Total sales and premium equivalents	$	291		$	163		$	113		$	92		$	733		$	659			(10	%)

RATIOS [3]	Loss Ratio		79.3	%		78.0	%		80.1	%		80.5	%		77.6	%		79.5	%		1.9
	Expense Ratio [4]		28.7	%		28.7	%		27.9	%		27.5	%		27.7	%		28.2	%		0.5

GAAP RESERVES [5]	Group disability	$	5,164		$	5,225		$	5,259		$	5,307
	Group life		1,217			1,210			1,206			1,202
	Other		76			75			75			77

	Total GAAP reserves	$	6,457		$	6,510		$	6,540		$	6,586

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

[2]	ASO fees and claims under claim management agreements.

[3]	Ratios calculated excluding the effects of buyout premiums.

[4]	The three months ended March 31, 2011 includes a one-time payment to a third-party administrator totaling 0.7 points.

[5]	Reserve balances for the three months ended March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011 are net of reinsurance recoverables of $212, $219, $225, and $233, respectively.

CONSUMER MARKETS

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSUMER MARKETS

INCOME STATEMENTS


	THREE MONTHS ENDED											YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,		DECEMBER 31,
	2011			2011			2011			2011		2010			2011			Change
Earned premiums	$	956		$	939		$	930		$	922	$	3,947		$	3,747			(5	%)
Net investment income		50			49			46			42		187			187			—
Other revenues		40			36			35			45		172			156			(9	%)
Net realized capital gains (losses)		(4	)		2			(10	)		1		—			(11	)		—

Total revenues		1,042			1,026			1,001			1,010		4,306			4,079			(5	%)
Losses and loss adjustment expenses		599			904			767			616		2,951			2,886			(2	%)
Amortization of deferred policy acquisition costs		85			85			84			83		371			337			(9	%)
Insurance operating costs and other expenses [1]		197			311			180			183		816			871			7	%

Total benefits and expenses		881			1,300			1,031			882		4,138			4,094			(1	%)
Income (loss) before income taxes		161			(274	)		(30	)		128		168			(15	)		NM
Income tax expense (benefit)		53			(102	)		(14	)		41		43			(22	)		NM

Net income (loss)		108			(172	)		(16	)		87		125			7			(94	%)
Less: Net realized capital gains (losses), after-tax, excluded from core earnings (losses)		(3	)		5			(6	)		2		(2	)		(2	)		—

Core earnings (losses)	$	111		$	(177	)	$	(10	)	$	85	$	127		$	9			(93	%)

[1]	The three months ended June 30, 2011 includes a charge of $113, before-tax, related to a discontinued software program.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSUMER MARKETS

OPERATING RESULTS


	THREE MONTHS ENDED												YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
UNDERWRITING RESULTS
Written premiums	$	884		$	969		$	964		$	858		$	3,886		$	3,675			(5	%)
Change in unearned premium reserve		(72	)		30			34			(64	)		(61	)		(72	)		(18	%)

Earned premiums		956			939			930			922			3,947			3,747			(5	%)
Losses and loss adjustment expenses
Current accident year before catastrophes		616			623			663			634			2,737			2,536			(7	%)
Current accident year catastrophes		32			281			113			(1	)		300			425			42	%
Prior accident years [1]		(49	)		—			(9	)		(17	)		(86	)		(75	)		13	%

Total losses and loss adjustment expenses		599			904			767			616			2,951			2,886			(2	%)
Underwriting expenses		234			232			225			218			984			909			(8	%)

Underwriting results		123			(197	)		(62	)		88			12			(48	)		NM

Net investment income		50			49			46			42			187			187			—
Periodic net coupon settlements on credit derivatives, before-tax		—			(1	)		—			(1	)		(2	)		(2	)		—
Other expenses [2]		(8	)		(128	)		(4	)		(3	)		(31	)		(143	)		NM
Income tax benefit (expense)		(54	)		100			10			(41	)		(39	)		15			NM

Core earnings (losses)		111			(177	)		(10	)		85			127			9			(93	%)
Add: Net realized capital gains (losses), after-tax		(3	)		5			(6	)		2			(2	)		(2	)		—

Net income (loss)	$	108		$	(172	)	$	(16	)	$	87		$	125		$	7			(94	%)

[1]	Included within prior accident years development were the following reserve strengthenings (releases):


													YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			DECEMBER 31,
	2011			2011			2011			2011			2010			2011
Auto liability	$	(55	)	$	(9	)	$	(19	)	$	(10	)	$	(115	)	$	(93	)
Homeowners		(14	)		1			14			(2	)		23			(1	)
Catastrophes		19			9			—			(3	)		10			25
Other reserve re-estimates, net		1			(1	)		(4	)		(2	)		(4	)		(6	)

Total prior accident years development	$	(49	)	$	—		$	(9	)	$	(17	)	$	(86	)	$	(75	)

[2]	The three months ended June 30, 2011 includes a charge of $113, before-tax, related to a discontinued software program.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSUMER MARKETS

UNDERWRITING RESULTS


	THREE MONTHS ENDED												YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
UNDERWRITING RESULTS		123			(197	)		(62	)		88			12			(48	)		NM
UNDERWRITING RATIOS
Losses and loss adjustment expenses
Current accident year before catastrophes		64.3			66.5			71.3			68.8			69.4			67.7			1.7
Current accident year catastrophes		3.4			29.9			12.2			(0.1	)		7.6			11.3			(3.7	)
Prior accident years [1]		(5.1	)		—			(1.0	)		(1.8	)		(2.2	)		(2.0	)		(0.2	)

Total losses and loss adjustment expenses		62.6			96.4			82.5			66.8			74.8			77.0			(2.2	)
Expenses		24.7			24.7			24.2			23.6			24.9			24.3			0.6

Combined ratio		87.3			121.1			106.7			90.5			99.7			101.3			(1.6	)

Catastrophes
Current year		3.4			29.9			12.2			(0.1	)		7.6			11.3			(3.7	)
Prior year		2.0			1.0			—			(0.3	)		0.3			0.7			(0.4	)

Catastrophe ratio		5.4			30.8			12.2			(0.4	)		7.8			12.0			(4.2	)

Combined ratio before catastrophes		81.9			90.2			94.5			90.9			91.9			89.3			2.6
Combined ratio before catastrophes and prior year development		89.0			91.2			95.5			92.4			94.3			91.9			2.4


PRODUCT
Automobile		85.2			98.0			99.4			99.0			98.0			95.3			2.7
Homeowners		91.5			175.0			124.1			72.5			104.3			115.8			(11.5	)

Total		87.3			121.1			106.7			90.5			99.7			101.3			(1.6	)

[1]	Refer to footnote 1 on page 18 for a summary of reserve strengthenings (releases) that are included within prior accident years development.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

CONSUMER MARKETS

WRITTEN AND EARNED PREMIUMS


	THREE MONTHS ENDED												YEAR ENDED
	Mar. 31,			Jun. 30,			Sept. 30,			Dec, 31,			DECEMBER 31,
	2011			2011			2011			2011			2010			2011			Change
BUSINESS UNIT
WRITTEN PREMIUMS [1]
AARP Direct	$	647		$	724		$	717		$	630		$	2,819		$	2,718			(4	%)
AARP Agency		14			17			19			22			39			72			85	%
Other Agency		210			216			213			194			975			833			(15	%)
Other		13			12			15			12			53			52			(2	%)

Total	$	884		$	969		$	964		$	858		$	3,886		$	3,675			(5	%)
EARNED PREMIUMS [1]
AARP Direct	$	698		$	694		$	687		$	685		$	2,850		$	2,764			(3	%)
AARP Agency		10			12			14			16			23			52			126	%
Other Agency		233			222			215			208			1,017			878			(14	%)
Other		15			11			14			13			57			53			(7	%)

Total	$	956		$	939		$	930		$	922		$	3,947		$	3,747			(5	%)

PRODUCT LINE
WRITTEN PREMIUMS [1]
Automobile	$	641		$	665		$	657		$	599		$	2,745		$	2,562			(7	%)
Homeowners		243			304			307			259			1,141			1,113			(2	%)

Total	$	884		$	969		$	964		$	858		$	3,886		$	3,675			(5	%)
EARNED PREMIUMS [1]
Automobile	$	672		$	657		$	649		$	641		$	2,806		$	2,619			(7	%)
Homeowners		284			282			281			281			1,141			1,128			(1	%)

Total	$	956		$	939		$	930		$	922		$	3,947		$	3,747			(5	%)

STATISTICAL PREMIUM INFORMATION (YEAR OVER YEAR)
Renewal Written Price Increases
Automobile		7	%		6	%		4	%		3	%		6	%		5	%		(1	%)
Homeowners		9	%		9	%		8	%		6	%		10	%		8	%		(2	%)
Policy Count Retention
Automobile		82	%		82	%		83	%		83	%		83	%		83	%		—
Homeowners		83	%		84	%		84	%		84	%		85	%		84	%		(1	%)
New Business Premium $
Automobile	$	66		$	75		$	80		$	77		$	311		$	298			(4	%)
Homeowners	$	19		$	23		$	26		$	23		$	106		$	91			(14	%)
Policies in force
Automobile		2,178,719			2,137,351			2,106,385			2,080,535
Homeowners		1,402,264			1,380,301			1,358,162			1,338,676

[1]	The difference between written premiums and earned premiums is attributable to the change in unearned premium reserve.

WEALTH MANAGEMENT

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

WEALTH MANAGEMENT

OPERATING RESULTS


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011			Change
REVENUES
Earned premiums [1]	$	44		$	33		$	42		$	35		$	134		$	154			15	%
Fee income [1]		880			891			858			805			3,461			3,434			(1	%)
Net investment income		406			410			406			395			1,570			1,617			3	%
Net realized capital gains (losses)		(66	)		1			(210	)		(295	)		(333	)		(570	)		(71	%)

Total revenues		1,264			1,335			1,096			940			4,832			4,635			(4	%)
Benefits and claims, losses and loss adjustment expenses [1]		505			527			732			466			1,976			2,230			13	%
Amortization of deferred policy acquisition costs [1]		86			258			390			(14	)		122			720			NM
Insurance operating costs and other expenses		434			433			397			414			1,671			1,678			—

Total benefits and expenses		1,025			1,218			1,519			866			3,769			4,628			23	%
Income (loss) from continuing operations before income taxes		239			117			(423	)		74			1,063			7			(99	%)
Income tax expense (benefit) [1] [2]		45			(70	)		(191	)		(16	)		251			(232	)		NM

Income (loss) from continuing operations, net of tax		194			187			(232	)		90			812			239			(71	%)
Income from discontinued operations, net of tax		—			—			—			—			37			—			(100	%)

Net income (loss)		194			187			(232	)		90			849			239			(72	%)
Less: Income from discontinued operations, net of tax		—			—			—			—			37			—			(100	%)
Less: Net realized capital losses, after-tax, excluded from core earnings [1][3]		(31	)		(42	)		(143	)		(127	)		(29	)		(343	)		NM

Core earnings (losses)	$	225		$	229		$	(89	)	$	217		$	841		$	582			(31	%)

[1]	The DAC unlock recorded in the periods presented below affected each income statement line item as follows:


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011
Earned Premiums	$	—		$	1		$	(3	)	$	1		$	(6	)	$	(1	)
Fee Income		(1	)		5			22			14			8			40
Benefits, losses and loss adjustment expense		(28	)		1			168			(54	)		(68	)		87
Amortization of deferred policy acquisition costs		(38	)		88			243			22			(166	)		315
Income tax expense (benefit)		21			(27	)		(137	)		16			84			(127	)

Net income (loss)		44			(56	)		(255	)		31			152			(236	)
Net realized gains (losses) and other, net of tax and DAC, excluded from core earnings		1			(49	)		(11	)		(39	)		(12	)		(98	)

Core earnings (losses)	$	43		$	(7	)	$	(244	)	$	70		$	164		$	(138	)

[2]	The three months ended June 30, 2011 includes a tax benefit of $52 related to the resolution of a tax matter with the IRS for the computation of dividends received deductions for years 1998, 2000 and 2001.

[3]	The three months ended June 30, 2011 includes a benefit of $22 related to the release of a deferred tax valuation allowance.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

WEALTH MANAGEMENT

FINANCIAL HIGHLIGHTS


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011			Change
CORE EARNINGS BY SEGMENT
Individual Annuity	$	108		$	154		$	90		$	92		$	403		$	444			10	%
Individual Life		38			42			37			34			161			151			(6	%)
Retirement Plans		9			13			4			1			19			27			42	%
Mutual Funds		27			27			24			20			94			98			4	%

Wealth Management core earnings, excluding DAC unlock		182			236			155			147			677			720			6	%
DAC unlock impacts on net income (loss)		44			(56	)		(255	)		31			152			(236	)		NM
Net realized gains (losses) and other, net of tax and DAC, excluded from core earnings		(32	)		7			(132	)		(88	)		(17	)		(245	)		NM
Income from discontinued operations		—			—			—			—			37			—			(100	%)

Wealth Management net income (loss)		194			187			(232	)		90			849			239			(72	%)
DAC UNLOCK IMPACT ON CORE EARNINGS (LOSSES) BY SEGMENT
Individual Annuity		43			(4	)		(163	)		69			137			(55	)		NM
Individual Life		(2	)		(1	)		(57	)		2			19			(58	)		NM
Retirement Plans		2			(2	)		(24	)		(1	)		8			(25	)		NM

DAC unlock impact on core earnings (losses)		43			(7	)		(244	)		70			164			(138	)		NM

DAC unlock impact on net realized gains (losses) and other, net of tax and DAC, excluded from core earnings		1			(49	)		(11	)		(39	)		(12	)		(98	)		NM
DAC unlock impact on net income (loss)	$	44		$	(56	)	$	(255	)	$	31		$	152		$	(236	)		NM


ASSETS UNDER MANAGEMENT BY SEGMENT

Individual Annuity	$	95,113		$	91,325		$	78,443		$	80,391
Individual Life		12,470			12,366			11,808			12,300
Retirement Plans		55,348			55,555			49,685			52,302
Non-Proprietary Mutual Funds		59,945			58,150			47,307			48,768

Total assets under management	$	222,876		$	217,396		$	187,243		$	193,761
DEPOSITS BY SEGMENT
Individual Annuity	$	263		$	247		$	228		$	258		$	1,676		$	996			(41	%)
Individual Life		415			448			512			545			1,700			1,920			13	%
Retirement Plans		2,863			2,069			2,470			2,034			8,633			9,436			9	%
Non-Proprietary Mutual Funds		4,821			3,872			4,338			2,318			15,451			15,349			(1	%)

Total deposits	$	8,362		$	6,636		$	7,548		$	5,155		$	27,460		$	27,701			1	%

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

WEALTH MANAGEMENT

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


	Individual Annuity			Individual Life			Retirement Plans			Mutual Funds			Total Wealth Management
YEAR-TO-DATE
Balance, December 31, 2010	$	2,757		$	2,064		$	382		$	43		$	5,246
Adjustments to unrealized gains and losses on securities available-for-sale and other		196			82			(8	)		—			270

Balance excluding adjustments to unrealized gains and losses on securities available-for-sale and other		2,953			2,146			374			43			5,516
Capitalization		55			263			58			31			407
Amortization-Deferred Policy Acquisition Costs		(355	)		(88	)		(41	)		(47	)		(531	)
Amortization-Present Value of Future Profits		(4	)		(17	)		—			—			(21	)
Amortization-Realized Capital Gains / Losses		155			(8	)		—			—			147
Amortization-Unlock-Core		(79	)		(59	)		(39	)		—			(177	)
Amortization-Unlock-Non-Core		(135	)		1			(4	)		—			(138	)

Balance, December 31, 2011		2,590			2,238			348			27			5,203
Adjustments to unrealized gains and losses on securities available-for-sale and other		(178	)		(236	)		(44	)		—			(458	)

Balance, December 31, 2011 including adjustments to unrealized gains and losses on securities available-for-sale and other	$	2,412		$	2,002		$	304		$	27		$	4,745

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

WEALTH MANAGEMENT

INDIVIDUAL ANNUITY

INCOME STATEMENTS


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011			Change
Fee Income [1]	$	375		$	380		$	344		$	312		$	1,493		$	1,411			(5	%)
Earned premiums [1]		65			56			66			62			223			249			12	%
Net investment income		197			196			191			184			814			768			(6	%)
Net realized capital losses		(28	)		(16	)		(236	)		(311	)		(339	)		(591	)		(74	%)

Total revenues		609			616			365			247			2,191			1,837			(16	%)
Benefits, losses and loss adjustment expenses [1]		251			272			391			192			1,054			1,106			5	%
Amortization of deferred policy acquisition costs [1]		42			195			241			(60	)		(50	)		418			NM
Insurance operating costs and other expenses		142			139			123			142			557			546			(2	%)

Total benefits and expenses		435			606			755			274			1,561			2,070			33	%
Income (loss) before income taxes		174			10			(390	)		(27	)		630			(233	)		NM
Income tax expense (benefit) [1] [2]		31			(77	)		(166	)		(45	)		117			(257	)		NM

Net income (loss)		143			87			(224	)		18			513			24			(95	%)
Less: Net realized capital losses, after-tax, excluded from core earnings (loss) [1]		(8	)		(63	)		(151	)		(143	)		(27	)		(365	)		NM
Core earnings (losses)	$	151		$	150		$	(73	)	$	161		$	540		$	389			(28	%)

RETURN ON ASSETS (After-tax bps)
Net income (loss)		60.1			37.3			(105.6	)		9.1			53.2			2.7			(95	%)
Core earnings (losses)		63.5			64.4			(34.4	)		81.1			56.0			44.3			(21	%)

[1]	The DAC unlock recorded in the periods presented below affected each income statement line item as follows:


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011
Fee Income	$	(1	)	$	4		$	4		$	1		$	1		$	8
Earned premiums		—			1			(3	)		1			(6	)		(1	)
Benefits, losses and loss adjustment expenses		(28	)		1			100			(50	)		(66	)		23
Amortization of deferred policy acquisition costs		(37	)		82			163			6			(131	)		214
Income tax expense (benefit)		21			(26	)		(92	)		17			68			(80	)

Net income (loss)		43			(52	)		(170	)		29			124			(150	)
Net realized gains (losses) and other, net of tax and DAC, excluded from core earnings		—			(48	)		(7	)		(40	)		(13	)		(95	)

Core earnings (loss)		43			(4	)		(163	)		69			137			(55	)

[2]	The three months ended June 30, 2011 include a tax benefit of $45 related to the resolution of a tax matter with the IRS for the computation of dividends received deductions for years 1998, 2000 and 2001.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

WEALTH MANAGEMENT

INDIVIDUAL LIFE

INCOME STATEMENTS


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011			Change
Fee income [1]	$	233		$	237		$	269		$	262		$	952		$	1,001			5	%
Earned premiums		(24	)		(25	)		(25	)		(28	)		(96	)		(102	)		(6	%)
Net investment income		111			115			115			115			400			456			14	%
Net realized capital gains (losses)		(30	)		6			28			26			24			30			25	%

Total revenues		290			333			387			375			1,280			1,385			8	%
Benefits, losses and loss adjustment expenses [1]		182			180			260			194			644			816			27	%
Amortization of deferred policy acquisition costs [1]		25			34			87			25			100			171			71	%
Insurance operating costs and other expenses		61			67			63			70			247			261			6	%

Total benefits and expenses		268			281			410			289			991			1,248			26	%
Income (loss) before income taxes		22			52			(23	)		86			289			137			(53	%)
Income tax expense (benefit) [1] [2]		4			6			(14	)		27			91			23			(75	%)

Net income (loss)		18			46			(9	)		59			198			114			(42	%)
Less: Net realized capital losses, net of tax and DAC, excluded from core earnings (loss) [1]		(18	)		5			11			23			18			21			17	%

Core earnings (losses)	$	36		$	41		$	(20	)	$	36		$	180		$	93			(48	%)

Earnings Margin (After-tax)
Net income		6.2	%		13.8	%		(2.3	%)		15.7	%		15.5	%		8.2	%		(7.2	)
Core earnings (losses)		11.2	%		12.6	%		(5.6	%)		10.2	%		14.3	%		6.9	%		(7.4	)

[1]	The DAC unlock recorded in the periods presented below affected each income statement line item as follows:


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011
Fee Income	$	—		$	1		$	18		$	13		$	7		$	32
Benefits, losses and loss adjustment expense		—			—			66			(4	)		(1	)		62
Amortization of deferred policy acquisition costs		1			3			40			14			(27	)		58
Income tax expense (benefit)		—			(1	)		(30	)		—			13			(31	)

Net income (loss)		(1	)		(1	)		(58	)		3			22			(57	)
Net realized gains (losses) and other, net of tax and DAC, excluded from core earnings (losses)		1			—			(1	)		1			3			1

Core earnings (losses)		(2	)		(1	)		(57	)		2			19			(58	)

[2]	The three months ended June 30, 2011 include a tax benefit of $3 related to the resolution of a tax matter with the IRS for the computation of dividends received deductions for years 1998, 2000 and 2001.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

WEALTH MANAGEMENT

RETIREMENT PLANS

INCOME STATEMENTS


	THREE MONTHS ENDED												YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011			Change
Fee income	$	94		$	99		$	92		$	88		$	352		$	373			6	%
Earned premiums		3			2			1			1			7			7			—
Net investment income		99			100			100			97			364			396			9	%
Net realized capital gains (losses)		(9	)		11			(2	)		(10	)		(18	)		(10	)		44	%

Total revenues		187			212			191			176			705			766			9	%
Benefits, losses and loss adjustment expenses [1]		72			75			81			80			278			308			11	%
Amortization of deferred policy acquisition costs [1]		7			17			50			10			21			84			NM
Insurance operating costs and other expenses		108			107			106			102			409			423			3	%

Total benefits and expenses		187			199			237			192			708			815			15	%
Income (loss) before income taxes		—			13			(46	)		(16	)		(3	)		(49	)		NM
Income tax benefit [1] [2]		(5	)		(14	)		(23	)		(10	)		(9	)		(52	)		NM

Net income (loss)		5			27			(23	)		(6	)		6			3			(50	%)
Less: Net realized capital gains (losses), after-tax, excluded from core earnings (loss) [1]		(6	)		16			(3	)		(6	)		(21	)		1			NM

Core earnings (losses)	$	11		$	11		$	(20	)	$	—		$	27		$	2			(93	%)

RETURN ON ASSETS (After-tax bps)
Net income (loss)		3.7			19.5			(17.4	)		(4.7	)		1.2			0.6			(50	%)
Core earnings (losses)		8.1			7.9			(15.2	)		—			5.6			0.4			(93	%)

[1]	The DAC unlock recorded in the periods presented below affected each income statement line item as follows:


													YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011
Benefits, losses and loss adjustment expenses	$	—		$	—		$	2		$	—		$	(1	)	$	2
Amortization of deferred policy acquisition costs		(2	)		3			40			2			(8	)		43
Income tax expense (benefit)		—			—			(15	)		(1	)		3			(16	)

Net income (loss)		2			(3	)		(27	)		(1	)		6			(29	)
Less: Net realized gains (losses), net of tax and DAC, excluded from core earnings		—			(1	)		(3	)		—			(2	)		(4	)

Core earnings (losses)		2			(2	)		(24	)		(1	)		8			(25	)

[2]	The three months ended June 30, 2011 include a tax benefit of $4 related to the resolution of a tax matter with the IRS for the computation of dividends received deductions for years 1998, 2000 and 2001.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

WEALTH MANAGEMENT

RETIREMENT PLANS

SUPPLEMENTAL DATA - ASSETS UNDER MANAGEMENT


	Dec. 31, 2010		March 31, 2011		June 30, 2011		Sept. 30, 2011		Dec. 31, 2011
RETIREMENT PLANS TOTAL
General account	$	7,280	$	7,502	$	7,638	$	8,042	$	8,374
Guaranteed separate account		6		—		—		—		—
Non-guaranteed separate account		25,654		27,522		27,443		23,799		25,525

Total Retirement Plans account value	$	32,940	$	35,024	$	35,081	$	31,841	$	33,899
401(k) mutual funds		19,249		19,927		20,085		17,488		18,038
403(b)/457 mutual funds		329		397		389		356		365

Total Retirement Plans Assets Under Management	$	52,518	$	55,348	$	55,555	$	49,685	$	52,302

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

WEALTH MANAGEMENT

MUTUAL FUNDS

INCOME STATEMENTS


	THREE MONTHS ENDED											YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011		Dec. 31, 2011			YEAR ENDED DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011		Dec. 31, 2011			2010			2011			Change
Fee income	$	178		$	175		$	153	$	143		$	664		$	649			(2	%)
Net investment income		(1	)		(1	)		—		(1	)		(8	)		(3	)		62	%
Net realized capital gains		1			—			—		—			—			1			100	%

Total revenues		178			174			153		142			656			647			(1	%)
Amortization of deferred policy acquisition costs		12			12			12		11			51			47			(8	%)
Insurance operating costs and other expenses		123			120			105		100			458			448			(2	%)

Total benefits and expenses		135			132			117		111			509			495			(3	%)
Income from continuing operations before income taxes		43			42			36		31			147			152			3	%
Income tax expense		15			15			12		12			52			54			4	%

Income from continuing operations, net of tax		28			27			24		19			95			98			3	%
Income (loss) from discontinued operations, net of tax		—			—			—		—			37			—			(100	%)

Net income		28			27			24		19			132			98			(26	%)
Less: Income from discontinued operations, net of tax		—			—			—		—			37			—			(100	%)
Less: Net realized capital gains (losses), after-tax, excluded from core earnings		1			—			—		(1	)		1			—			(100	%)

Core earnings	$	27		$	27		$	24	$	20		$	94		$	98			4	%

RETURN ON ASSETS (After-tax bps)
Net income		11.0			10.6			10.5		9.0			13.7			10.5			(23	%)
Core earnings		10.6			10.6			10.5		9.5			9.8			10.5			7	%

RUNOFF OPERATIONS

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

RUNOFF OPERATIONS

FINANCIAL HIGHLIGHTS


	THREE MONTHS ENDED												YEAR ENDED
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			DECEMBER 31,
	March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011			2010			2011			Change
NET INCOME(LOSS) BY SEGMENT
International Annuity	$	(98	)	$	104		$	376		$	(44	)	$	27		$	338			NM
Institutional Annuity		18			58			(53	)		1			(105	)		24			NM
Private Placement Life Insurance (“PPLI”)		10			12			6			9			33			37			12	%

Life Other Operations net income (loss)		(70	)		174			329			(34	)		(45	)		399			NM
Net realized gains (losses) and other, net of tax and DAC, excluded from core earnings		(168	)		88			213			(79	)		(301	)		54			NM
Income (loss) from discontinued operations		—			—			—			—			(6	)		—			100	%

Life Other Operations core earnings (losses)	$	98		$	86		$	116		$	45		$	262		$	345			32	%
Property & Casualty Other Operations net income (loss) [1]		21			(164	)		8			18			(53	)		(117	)		(121	%)
Net realized gains (losses) and other, net of tax and DAC, excluded from core earnings		(2	)		3			(1	)		2			16			2			(88	%)

Property & Casualty Other Operations core earnings (losses)	$	23		$	(167	)	$	9		$	16		$	(69	)	$	(119	)		(72	%)
Runoff Operations net income (loss)		(49	)		10			337			(16	)		(98	)		282			NM
Net realized gains (losses) and other, net of tax and DAC, excluded from core earnings		(170	)		91			212			(77	)		(285	)		56			NM
Income (loss) from discontinued operations		—			—			—			—			(6	)		—			100	%

Runoff Operations core earnings (losses)	$	121		$	(81	)	$	125		$	61		$	193		$	226			17	%

LIFE OTHER OPERATIONS SUPPLEMENTAL DATA
Return on Assets (After-tax bps)
Net income (loss)		(30.4	)		75.6			144.1			(15.0	)		(4.8	)		43.7			NM
Core earnings		42.6			37.4			50.8			19.9			27.9			37.8			36	%
DAC unlock impact on net income (loss) by segment
International Annuity	$	14		$	(11	)	$	(212	)	$	(25	)	$	(58	)	$	(234	)		NM
Institutional Annuity		(1	)		1			(2	)		(1	)		(1	)		(3	)		NM

Life Other Operations	$	13		$	(10	)	$	(214	)	$	(26	)	$	(59	)	$	(237	)		NM
DAC unlock impact on core earnings (losses) by segment
International Annuity	$	13		$	(10	)	$	41		$	(26	)	$	(44	)	$	18			NM
Institutional Annuity		—			—			(4	)		1			(2	)		(3	)		(50	%)

Life Other Operations	$	13		$	(10	)	$	37		$	(25	)	$	(46	)	$	15			NM
Core earnings (losses) by segment
International Annuity	$	77		$	69		$	114		$	44		$	231		$	304			32	%
Institutional Annuity		11			7			(9	)		(9	)		(4	)		—			100	%
Private Placement Life Insurance		10			10			11			10			35			41			17	%

Life Other Operations core earnings	$	98		$	86		$	116		$	45		$	262		$	345			32	%

[1]

The year ended December 31, 2010 included net asbestos reserve strengthening and net environmental reserve strengthening of $169 and $62, respectively. The three months ended June 30, 2011 included net asbestos reserve strengthening of $290. The three months ended September 30, 2011 included net environmental reserve strengthening of $19.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

RUNOFF OPERATIONS

LIFE OTHER OPERATIONS

SUPPLEMENTAL DATA—ACCOUNT VALUE DATA


			THREE MONTHS ENDED															Year Over Year 3 Month Change			Sequential 3 Month Change
			Dec. 31, 2010			March 31, 2011			June 30, 2011			Sept. 30, 2011			Dec. 31, 2011


ACCOUNT VALUE BY SEGMENT
	Variable Annuity		$	33,507		$	33,027		$	32,981		$	31,438		$	31,162			(7	%)		(1	%)
	Fixed and other annuity			4,596			4,463			4,824			5,013			4,786			4	%		(5	%)

	Total International Annuity account value		$	38,103		$	37,490		$	37,805		$	36,451		$	35,948			(6	%)		(1	%)
	Institutional Annuity account value [1]		$	19,674		$	19,326		$	19,230		$	19,477		$	19,330			(2	%)		(1	%)
	Private Placement Life Insurance account value		$	36,042		$	36,424		$	36,700		$	35,989		$	36,335			1	%		1	%
	Total Life Other Operations account value [1]		$	92,399		$	91,803		$	92,250		$	90,443		$	90,317			(2	%)		—
INTERNATIONAL ANNUITY ACCOUNT VALUE ROLL FORWARD
VARIABLE ANNUITIES		Beginning balance	$	33,177		$	33,507		$	33,027		$	32,981		$	31,438
	Deposits/Premiums/other			1			1			1			—			—
	Surrenders			(363	)		(285	)		(291	)		(296	)		(291	)
	Death benefits /annuitizations/other [2]			(159	)		(192	)		(166	)		(165	)		(164	)

	Net Flows			(521	)		(476	)		(456	)		(461	)		(455	)
	Change in market value/currency/change in reserve/interest credited			(57	)		610			(404	)		(2,477	)		141
	Effect of currency translation			908			(614	)		814			1,395			38

		Ending balance	$	33,507		$	33,027		$	32,981		$	31,438		$	31,162

FIXED MVA AND OTHER [3]		Beginning balance	$	4,703		$	4,596		$	4,463		$	4,824		$	5,013
	Surrenders			(58	)		(43	)		(31	)		(44	)		(59	)
	Death benefits/annuitizations/other [2]			(209	)		(23	)		246			(16	)		(204	)

	Net Flows			(267	)		(66	)		215			(60	)		(263	)
	Change in market value/currency/change in reserve/interest credited			23			31			22			19			28
	Effect of currency translation			137			(98	)		124			230			8

		Ending balance	$	4,596		$	4,463		$	4,824		$	5,013		$	4,786

TOTAL INTERNATIONAL ANNUITY		Beginning balance	$	37,880		$	38,103		$	37,490		$	37,805		$	36,451
	Deposits/Premiums/other			1			1			1			—			—
	Surrenders			(421	)		(328	)		(322	)		(340	)		(350	)
	Death benefits/annuitizations/other [2]			(368	)		(215	)		80			(181	)		(368	)

	Net Flows			(788	)		(542	)		(241	)		(521	)		(718	)
	Change in market value/change in reserve/interest credited			(34	)		641			(382	)		(2,458	)		169
	Effect of currency translation			1,045			(712	)		938			1,625			46

		Ending balance	$	38,103		$	37,490		$	37,805		$	36,451		$	35,948

[1]

Included in the Institutional Annuity account value balance is approximately $1.4 billion for the three months ended December 31, 2010 and March 31, 2011 and approximately $1.5 billion for the three months ended June 30, 2011 and September 30, 2011 and approximately $1.3 billion for the three months ended December 31, 2011 related to an intrasegment funding agreement which is eliminated in consolidation.

[2]

Included in the three months ended December 31, 2011 are current period payments of $201 and interest credited of $14.6 related to 3 Win “GMIB” policies that triggered in fourth quarter 2008 and first quarter 2009 for option (2), which are included in the fixed MVA and other—death benefits/annuitizations/other and change in market value/change in reserve/interest credited. The 3 Win guaranteed minimum benefit “GMIB” requires the policyholder to elect one of the two options; either (1) receive 80% of their initial deposit without surrender penalty or (2) receive 100% of the initial deposit via a 15 year pay out annuity.

[3]

Of the total ending fixed MVA and other balance as of December 31, 2011 of $4.8 billion, approximately $1.9 billion is related to the triggering of the guaranteed minimum income benefit for the 3 Win product. This account value is not expected to generate material future profit or loss to the Company.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

RUNOFF OPERATIONS

LIFE OTHER OPERATIONS

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


	International Annuity			Institutional Annuity			PPLI			Life Other Operations


YEAR-TO-DATE
Balance, December 31, 2010	$	1,526		$	66		$	34		$	1,626
Adjustments to unrealized gains and losses on securities available—for—sale and other		(67	)		—			—			(67	)

Balance excluding adjustments to unrealized gains and losses on securities available—for—sale and other		1,459			66			34			1,559
Capitalization		—			—			1			1
Amortization—Deferred Policy Acquisition Costs		(200	)		(8	)		(2	)		(210	)
Amortization—Realized Capital Gains / Losses		(121	)		—			—			(121	)
Amortization—Unlock—Core		289			(4	)		—			285
Amortization—Unlock—Non-Core		(389	)		—			—			(389	)
Effect of Currency Translation Adjustment		73			—			—			73

Balance, December 31, 2011		1,111			54			33			1,198
Adjustments to unrealized gains and losses on
securities available—for—sale and other		14			1			—			15

Balance, December 31, 2011 including adjustments to unrealized gains and losses on securities available-for-sale and other	$	1,125		$	55		$	33		$	1,213
	$	1,125		$	55		$	33		$	1,213

CONSOLIDATED

INVESTMENTS

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT EARNINGS BEFORE-TAX

CONSOLIDATED


	THREE MONTHS ENDED												Year Ended December 31,
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			Year Ended December 31,
	2011			2011			2011			2011			2010			2011			Change
Net Investment Income (Loss)
Fixed maturities [1]
Taxable	$	719		$	744		$	711		$	723		$	2,972		$	2,897			(3	%)
Tax-exempt		127			126			125			121			517			499			(3	%)

Total fixed maturities		846			870			836			844			3,489			3,396			(3	%)
Equity securities, trading		803			(597	)		(1,890	)		325			(774	)		(1,359	)		(76	%)
Equity securities, available-for-sale		11			8			8			9			53			36			(32	%)
Mortgage loans		63			67			75			76			260			281			8	%
Policy loans		33			34			32			32			132			131			(1	%)
Limited partnerships and other alternative investments [2]		100			78			67			(2	)		216			243			13	%
Other [3]		81			77			73			70			329			301			(9	%)

Subtotal		1,937			537			(799	)		1,354			3,705			3,029			(18	%)
Less: Investment expense		26			30			29			31			115			116			1	%

Total net investment income [4]	$	1,911		$	507		$	(828	)	$	1,323		$	3,590		$	2,913			(19	%)
Less: Equity securities, trading		803			(597	)		(1,890	)		325			(774	)		(1,359	)		(76	%)

Total net investment income excluding trading securities	$	1,108		$	1,104		$	1,062		$	998		$	4,364		$	4,272			(2	%)

Annualized investment yield, before-tax [5]		4.6	%		4.6	%		4.3	%		4.0	%		4.5	%		4.4	%		(0.1	)
Annualized investment yield, after-tax [5]		3.2	%		3.1	%		2.9	%		2.8	%		3.1	%		3.0	%		(0.1	)
Net Realized Capital Gains (Losses)
Gross gains on sales	$	61		$	261		$	197		$	174		$	836		$	693			(17	%)
Gross losses on sales		(133	)		(98	)		(63	)		(90	)		(522	)		(384	)		26	%
Net impairment losses		(55	)		(23	)		(60	)		(36	)		(434	)		(174	)		60	%
Valuation allowances on mortgage loans		(3	)		26			—			1			(154	)		24			NM
Japanese fixed annuity contract hedges, net [6]		(17	)		6			9			5			27			3			(89	%)
Periodic net coupon settlements on credit derivatives/Japan [7]		(7	)		(2	)		1			(2	)		(17	)		(10	)		41	%
Results of variable annuity hedge program
U.S. GMWB derivatives, net		56			(33	)		(323	)		(97	)		89			(397	)		NM
U.S. macro hedge		(84	)		(17	)		106			(221	)		(445	)		(216	)		51	%

Total U.S. program		(28	)		(50	)		(217	)		(318	)		(356	)		(613	)		(72	%)
International program		(319	)		52			1,132			(90	)		11			775			NM

Total results of variable annuity hedge program		(347	)		2			915			(408	)		(345	)		162			NM
Other net gain (loss) [8]		98			(103	)		(424	)		(30	)		(2	)		(459	)		NM

Total net realized capital gains (losses) [9]	$	(403	)	$	69		$	575		$	(386	)	$	(611	)	$	(145	)		76	%

[1]	Includes income on short-term bonds.

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

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

[4]	Includes $1, $2, $2, $1 and $1 in Corporate as of December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively.

[5]

Yields calculated using annualized net investment income (excluding income related to equity securities, trading) divided by the monthly average invested assets at cost, amortized cost, or adjusted carrying value, as applicable, excluding equity securities, trading, and consolidated variable interest entity non-controlling interests.

[6]	Relates to the Japanese fixed annuity product (adjustment of product liability for changes in spot currency exchange rates, related derivative hedging instruments, excluding periodic net coupon settlements, and Japan fair value option securities).

[7]	Included in core earnings.

[8]	Primarily consists of gains and losses on non-qualifying derivatives and fixed maturities, FVO, Japan 3Win related foreign currency swaps and other investment gains and losses.

[9]	Includes ($2), ($2), ($1), $0 and ($1) in Corporate as of December 31, 2010, March 31, 2011, June 30, 2011, September 30, 2011 and December 31, 2011, respectively.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT EARNINGS BEFORE-TAX

LIFE [1]


	THREE MONTHS ENDED												Year Ended December 31,
	Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			Year Ended December 31,
	2011			2011			2011			2011			2010			2011			Change
Net Investment Income (Loss)
Fixed maturities [2]
Taxable	$	541		$	555		$	537		$	541		$	2,205		$	2,174			(1	%)
Tax-exempt		27			26			27			26			114			106			(7	%)

Total fixed maturities		568			581			564			567			2,319			2,280			(2	%)
Equity securities, trading		803			(597	)		(1,890	)		325			(774	)		(1,359	)		(76	%)
Equity securities, available-for-sale		5			4			3			4			25			16			(36	%)
Mortgage loans		58			59			67			67			235			251			7	%
Policy loans		33			34			32			32			132			131			(1	%)
Limited partnerships and other alternative investments [3]		60			50			52			(3	)		139			159			14	%
Other [4]		70			67			65			59			297			261			(12	%)

Subtotal		1,597			198			(1,107	)		1,051			2,373			1,739			(27	%)
Less: Investment expense		20			21			22			22			84			85			1	%

Total net investment income	$	1,577		$	177		$	(1,129	)	$	1,029		$	2,289		$	1,654			(28	%)
Less: Equity securities, trading		803			(597	)		(1,890	)		325			(774	)		(1,359	)		(76	%)

Total net investment income excluding trading securities	$	774		$	774		$	761		$	704		$	3,063		$	3,013			(2	%)

Annualized investment yield, before-tax [5]		4.7	%		4.7	%		4.5	%		4.1	%		4.6	%		4.5	%		(0.1	)
Annualized investment yield, after-tax [5]		3.1	%		3.1	%		3.0	%		2.7	%		3.0	%		3.0	%		—
Net Realized Capital Gains (Losses)
Gross gains on sales	$	36		$	191		$	144		$	123		$	611		$	494			(19	%)
Gross losses on sales		(90	)		(64	)		(31	)		(61	)		(373	)		(246	)		34	%
Net impairment losses		(41	)		(13	)		(44	)		(35	)		(354	)		(133	)		62	%
Valuation allowances on mortgage loans		(3	)		26			—			—			(126	)		23			NM
Japanese fixed annuity contract hedges, net [6]		(17	)		6			9			5			27			3			(89	%)
Periodic net coupon settlements on credit derivatives/Japan [7]		(5	)		—			2			(1	)		(7	)		(4	)		43	%
Results of variable annuity hedge program
U.S. GMWB derivatives, net		56			(33	)		(323	)		(97	)		89			(397	)		NM
U.S. macro hedge		(84	)		(17	)		106			(221	)		(445	)		(216	)		51	%

Total U.S. program		(28	)		(50	)		(217	)		(318	)		(356	)		(613	)		(72	%)
International program		(319	)		52			1,132			(90	)		11			775			NM

Total results of variable annuity hedge program		(347	)		2			915			(408	)		(345	)		162			NM
Other net gain (loss) [8]		96			(96	)		(355	)		(22	)		(67	)		(377	)		NM

Total net realized capital gains (losses)	$	(371	)	$	52		$	640		$	(399	)	$	(634	)	$	(78	)		88	%

[1]	Please refer to the basis of presentation for a description of the statutory legal entity view for Life.

[2]	Includes income on short-term bonds.

[3]	Includes income on a real estate joint venture.

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

[5]

[6]	Relates to the Japanese fixed annuity product (adjustment of product liability for changes in spot currency exchange rates, related derivative hedging instruments, excluding periodic net coupon settlements, and Japan fair value option securities).

[7]	Included in core earnings.

[8]	Primarily consists of gains and losses on non-qualifying derivatives and fixed maturities, FVO, Japan 3Win related foreign currency swaps and other investment gains and losses.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INVESTMENT EARNINGS BEFORE-TAX

PROPERTY & CASUALTY [1]


	Three Months Ended															Year Ended December 31,
	Dec. 31,			Mar. 31,			Jun. 30,			Sept. 30,			Dec. 31,			Year Ended December 31,
	2010			2011			2011			2011			2011			2010			2011			Change
Net Investment Income (Loss)
Fixed maturities [2]
Taxable	$	184		$	177		$	187		$	174		$	182		$	761		$	720			(5	%)
Tax-exempt		98			100			100			98			95			403			393			(2	%)

Total fixed maturities		282			277			287			272			277			1,164			1,113			(4	%)
Equity securities, available-for-sale		6			5			4			4			4			25			17			(32	%)
Mortgage loans		7			5			8			8			9			26			30			15	%
Limited partnerships and other alternative investments [3]		35			40			28			15			1			77			84			9	%
Other [4]		13			11			10			8			11			36			40			11	%

Subtotal		343			338			337			307			302			1,328			1,284			(3	%)
Less: Investment expense		9			6			9			7			9			31			31			—

Total net investment income	$	334		$	332		$	328		$	300		$	293		$	1,297		$	1,253			(3	%)

Annualized investment yield, before-tax [5]		4.8	%		4.7	%		4.7	%		4.3	%		4.2	%		4.6	%		4.5	%		(0.1	)
Annualized investment yield, after-tax [5]		3.6	%		3.6	%		3.5	%		3.2	%		3.1	%		3.5	%		3.3	%		(0.2	)
Net Realized Capital Gains (Losses)
Gross gains on sales	$	61		$	25		$	69		$	52		$	51		$	222		$	197			(11	%)
Gross losses on sales		(35	)		(43	)		(34	)		(31	)		(29	)		(147	)		(137	)		7	%
Net impairment losses		(19	)		(14	)		(10	)		(16	)		(1	)		(80	)		(41	)		49	%
Valuation allowances on mortgage loans		(1	)		—			—			—			1			(28	)		1			NM
Periodic net coupon settlements on credit derivatives/Japan [6]		(2	)		(2	)		(2	)		(1	)		(1	)		(10	)		(6	)		40	%
Other net gain (loss) [7]		14			4			(5	)		(69	)		(7	)		71			(77	)		NM

Total net realized capital gains (losses)	$	18		$	(30	)	$	18		$	(65	)	$	14		$	28		$	(63	)		NM

[1]	Please refer to the basis of presentation for a description of the statutory legal entity view for Property & Casualty.

[2]	Includes income on short-term bonds.

[3]	Includes income on a real estate joint venture and hedge fund investments outside of limited partnerships.

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

[5]	Yields calculated using annualized net investment income (excluding income related to equity securities, trading) divided by the monthly average invested assets at cost, amortized cost, or adjusted carrying value, as applicable.

[6]	Included in core earnings.

[7]	Primarily consists of gains and losses on non-qualifying derivatives and fixed maturities, FVO, and other investment gains and losses.

HARTFORD FINANCIAL SERVICES GROUP, INC. - FORM 8-K - EX-99.1 - March 23, 2012

Attached files

HARTFORD FINANCIAL SERVICES GROUP, INC. Reports