What changed in this filing

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Item 1. Financial Statements

2022-10-27 compared with 2022-07-28 · 285 added, 264 removed, 1465 unchanged (27% of the section changed)

6 unchanged sentences

We have reviewed the accompanying condensed consolidated balance sheet of The Hartford Financial Services Group, Inc.

and subsidiaries (the "Company") as of June 30, 2022, the related condensed consolidated statements of operations, comprehensive income (loss), and changes in stockholders' equity, for the three-month and six-month periods ended June 30, 2022 and 2021, and of cash flows for the six-month periods ended June 30, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information").

and subsidiaries (the "Company") as of September 30, 2022, the related condensed consolidated statements of operations, comprehensive income (loss), and changes in stockholders' equity for the three-month and nine-month periods ended September 30, 2022 and 2021, and of cash flows for the nine-month periods ended September 30, 2022 and 2021, and the related notes (collectively referred to as the "interim financial information").

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

12 unchanged sentences

Hartford, Connecticut

July 28, 2022

October 27, 2022

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Operations

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions, except for per share data) 2022 2021 2022 2021

25 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2022 2021 2022 2021

2 unchanged sentences

Change in net unrealized gain (loss) on fixed maturities ( 1,180 ) ( 274 ) ( 4,654 ) ( 904 )

Change in unrealized losses on fixed maturities for which an allowance for credit losses ("ACL") has been recorded ( 5 ) — ( 5 ) —

Change in net gain on cash flow hedging instruments 39 1 63 1

1 unchanged sentence

Changes in pension and other postretirement plan adjustments 13 14 37 41

Other comprehensive income (loss), net of tax ( 1,563 ) 306 ( 3,434 ) ( 600 )

Other comprehensive loss, net of tax ( 1,152 ) ( 263 ) ( 4,586 ) ( 863 )

Comprehensive income (loss) $ ( 813 ) $ 219 $ ( 3,360 ) $ 773

2 unchanged sentences

Condensed Consolidated Balance Sheets

(in millions, except for share and per share data) June 30,

(in millions, except for share and per share data) September 30,

2022 December 31, 2021

27 unchanged sentences

Stockholders’ Equity

Preferred stock, $ 0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at June 30, 2022 and December 31, 2021, aggregate liquidation preference of $ 345

Common stock, $ 0.01 par value — 1,500,000,000 shares authorized, 366,960,228 shares issued at June 30, 2022 and December 31, 2021

Preferred stock, $ 0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at September 30, 2022 and December 31, 2021, aggregate liquidation preference of $ 345

Common stock, $ 0.01 par value — 1,500,000,000 shares authorized, 366,960,228 shares issued at September 30, 2022 and December 31, 2021

Additional paid-in capital 3,277 3,309

9 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders' Equity

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in millions, except for share and per share data) 2022 2021 2022 2021

20 unchanged sentences

Accumulated Other Comprehensive Income, net of tax, beginning of period ( 3,262 ) 570 172 1,170

Total other comprehensive income (loss) ( 1,563 ) 306 ( 3,434 ) ( 600 )

Total other comprehensive loss ( 1,152 ) ( 263 ) ( 4,586 ) ( 863 )

Accumulated Other Comprehensive Income (Loss), net of tax, end of period ( 4,414 ) 307 ( 4,414 ) 307

12 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2022 2021

7 unchanged sentences

Loss on extinguishment of debt 9 —

Loss on sale of business — 20

Other operating activities, net 43 ( 178 )

18 unchanged sentences

Partnerships ( 875 ) ( 830 )

Net proceeds from (payments for) derivatives 52 ( 5 )

Net proceeds from derivatives 94 3

Net additions of property and equipment ( 122 ) ( 92 )

1 unchanged sentence

Other investing activities, net 15 ( 2 )

Net cash provided by (used for) investing activities 387 ( 579 )

Net cash used for investing activities ( 705 ) ( 1,748 )

Financing Activities

2 unchanged sentences

Repayment of debt ( 600 ) —

Proceeds from the issuance of debt — 588

Net issuance (return) of shares under incentive and stock compensation plans ( 34 ) 23

4 unchanged sentences

Foreign exchange rate effect on cash ( 18 ) ( 5 )

Net increase in cash and restricted cash, including cash classified within assets held for sale 11 86

Net increase (decrease) in cash and restricted cash, including cash classified within assets held for sale ( 52 ) 173

Net increase in cash classified within assets held for sale — 15

Net increase in cash and restricted cash 11 69

Net increase (decrease) in cash and restricted cash ( 52 ) 158

Cash and restricted cash – beginning of period 337 239

41 unchanged sentences

Computation of Basic and Diluted Earnings per Common Share

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(In millions, except for per share data) 2022 2021 2022 2021

11 unchanged sentences

Net Income (Loss)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

30 unchanged sentences

$ 5,580 $ 5,686 $ 16,346 $ 16,574

[1] For the three months ended June 30, 2022 and 2021, AARP members accounted for earned premiums of $ 675 and $ 682 , respectively.

For the six months ended June 30, 2022 and 2021, AARP members accounted for earned premiums of $ 1.34 billion and $ 1.36 billion, respectively.

[1] For the three months ended September 30, 2022 and 2021, AARP members accounted for earned premiums of $ 695 and $ 687 , respectively.

For the nine months ended September 30, 2022 and 2021, AARP members accounted for earned premiums of $ 2.0 billion and $ 2.0 billion, respectively.

[2] Represents revenues earned for investment advisory services on the life and annuity separate account assets under management ("AUM") sold in May 2018 that is still managed by the Company's Hartford Funds segment.

3 unchanged sentences

Revenue from Non-Insurance Contracts with Customers

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Revenue Line Item 2022 2021 2022 2021

26 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of June 30, 2022

Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of September 30, 2022

Total Quoted Prices in

23 unchanged sentences

Foreign exchange derivatives 8 — 8 —

Interest rate derivatives 2 — 2 —

Total derivative assets [1] 12 — 12 —

45 unchanged sentences

[2] Includes derivative instruments in a net negative fair value position (derivative liability) after consideration of the accrued interest and impact of collateral posting requirements which may be imposed by agreements and applicable law.

The Company has overseas deposits included in other investments of $ 57 and $ 65 as of June 30, 2022 and December 31, 2021, respectively, which are measured at fair value using the net asset value as a practical expedient.

The Company has overseas deposits included in other investments of $ 58 and $ 65 as of September 30, 2022 and December 31, 2021, respectively, which are measured at fair value using the net asset value as a practical expedient.

FIXED MATURITIES, EQUITY SECURITIES, SHORT-TERM INVESTMENTS, AND DERIVATIVES

Valuation Techniques

The Company generally determines fair values using valuation techniques that use prices, rates, and other relevant information evident from market transactions involving identical or similar instruments.

The Company generally determines fair values using valuation techniques that use prices, rates, and other relevant information

evident from market transactions involving identical or similar instruments.

Valuation techniques also include, where appropriate, estimates of future cash flows that are converted into a single discounted amount using current market expectations.

The Company uses a "waterfall" approach

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

The Company uses a "waterfall" approach comprised of the following pricing sources and techniques, which are listed in priority order:

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

1 unchanged sentence

These services utilize recently reported trades of identical, similar, or benchmark securities making adjustments for market observable inputs available through the reporting date.

If there are no recently reported trades, they may use a discounted cash flow technique to develop a price using expected cash flows based upon the anticipated future performance of the underlying collateral discounted at an estimated market rate.

Both techniques develop prices that consider the time value of future cash flows and provide a margin for risk, including liquidity and credit risk.

Most prices provided by third-party pricing services are classified as Level 2 because the inputs used in pricing the securities are observable.

However, some securities that are less liquid or trade less actively are classified as Level 3.

Additionally,

If there are no recently reported trades, they may use a discounted cash flow

Note 4 - Fair Value Measurements

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

certain long-dated securities, such as municipal securities and bank loans, include benchmark interest rate or credit spread assumptions that are not observable in the marketplace and are thus classified as Level 3.

technique to develop a price using expected cash flows based upon the anticipated future performance of the underlying collateral discounted at an estimated market rate.

Both techniques develop prices that consider the time value of future cash flows and provide a margin for risk, including liquidity and credit risk.

Most prices provided by third-party pricing services are classified as Level 2 because the inputs used in pricing the securities are observable.

However, some securities that are less liquid or trade less actively are classified as Level 3.

Additionally, certain long-dated securities, such as municipal securities and bank loans, include benchmark interest rate or credit spread assumptions that are not observable in the marketplace and are thus classified as Level 3.

• Internal matrix pricing is a valuation process internally developed for private placement securities for which the Company is unable to obtain a price from a third-party pricing service.

90 unchanged sentences

Input on Fair Value [2]

As of June 30, 2022

As of September 30, 2022

CLO [3] $ 124 Discounted cash flows Spread 355 bps 355 bps 355 bps Decrease

20 unchanged sentences

[6] Generally, a change in the assumption used for the constant default rate would have been accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for constant prepayment rate and would have resulted in wider spreads .

As of June 30, 2022 and December 31, 2021, the fair values of the Company's level 3 derivatives were less than $ 1 for both periods.

As of September 30, 2022 and December 31, 2021, the fair values of the Company's level 3 derivatives were less than $ 1 for both periods.

The table above excludes certain securities for which fair values are predominately based on independent broker quotes.

2 unchanged sentences

Therefore, similar to non-broker priced securities, increases in these inputs would generally cause fair values to decrease.

As of June 30, 2022, no significant adjustments were made by the Company to broker prices received.

As of September 30, 2022, no significant adjustments were made by the Company to broker prices received.

LEVEL 3 ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS USING SIGNIFICANT UNOBSERVABLE INPUTS

5 unchanged sentences

Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Total realized/unrealized gains (losses)

Fair value as of March 31, 2022 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of June 30, 2022

Fair value as of June 30, 2022 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of September 30, 2022

Fixed maturities, AFS

ABS $ 19 $ — $ — $ — $ — $ — $ — $ ( 19 ) $ —

CLO $ 164 $ — $ — $ 31 $ ( 13 ) $ — $ — $ ( 27 ) $ 155

10 unchanged sentences

Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Total realized/unrealized gains (losses)

Fair value as of January 1, 2022 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of June 30, 2022

Fair value as of January 1, 2022 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of September 30, 2022

Fixed Maturities, AFS

15 unchanged sentences

Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Total realized/unrealized gains (losses)

Fair value as of March 31, 2021 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of June 30, 2021

Fair value as of June 30, 2021 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of September 30, 2021

Fixed Maturities, AFS

3 unchanged sentences

Corporate 1,141 — ( 7 ) 156 ( 29 ) ( 1 ) — ( 6 ) 1,254

Foreign Govt./Govt.

Agencies — — — 5 — — — — 5

RMBS 302 — ( 1 ) 41 ( 45 ) — — ( 29 ) 268

1 unchanged sentence

Equity Securities, at fair value 74 4 — 2 ( 9 ) — — — 71

Fixed maturities, FVO — — — 75 — — — — 75

Short-term investments 18 — — 8 ( 3 ) — — — 23

1 unchanged sentence

Fair Value Rollforwards for Financial Instruments Classified as Level 3 for the

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Total realized/unrealized gains (losses)

Fair value as of January 1, 2021 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of June 30, 2021

Fair value as of January 1, 2021 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of September 30, 2021

Fixed Maturities, AFS

8 unchanged sentences

Equity Securities, at fair value 70 6 — 5 ( 10 ) — — — 71

Fixed maturities, FVO — — — 75 — — — — 75

Short-term investments 30 — — 10 ( 17 ) — — — 23

9 unchanged sentences

Level 3 Still Held at End of Period

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021 2022 2021 2022 2021

18 unchanged sentences

These instruments are included within fixed maturities, FVO on the Condensed Consolidated Balance Sheets and changes in the fair value of these investments are reported in net realized gains and losses.

As of June 30, 2022 and December 31, 2021, the fair value of assets using the fair value option was $ 342 and $ 160 , respectively.

For the three and six months ended June 30, 2022 realized losses related to the change in fair value of assets using the fair value option were $ 20 and $ 23 , respectively.

For the three and six months ended June 30, 2021 there were no realized gains (losses) related to the change in fair value of assets using the fair value option.

As of September 30, 2022 and December 31, 2021, the fair value of assets using the fair value option was $ 335 and $ 160 , respectively.

For the three and nine months ended September 30, 2022 realized losses related to the change in fair value of assets using the fair value option were $ 3 and $ 26 , respectively.

For the three and nine months ended September 30, 2021 realized losses related to the change in fair value of assets using the fair value option were less than $ 1 .

FINANCIAL INSTRUMENTS NOT CARRIED AT FAIR VALUE

Financial Assets and Liabilities Not Carried at Fair Value

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Fair Value Hierarchy Level Carrying Amount [1] Fair Value Fair Value Hierarchy Level Carrying Amount [1] Fair Value

3 unchanged sentences

Junior subordinated debentures [2] Level 2 $ 499 $ 412 Level 2 $ 1,090 $ 1,086

[1] As of June 30, 2022 and December 31, 2021, the carrying amount of mortgage loans is net of ACL of $ 36 and $ 29 , respectively.

[1] As of September 30, 2022 and December 31, 2021, the carrying amount of mortgage loans is net of ACL of $ 36 and $ 29 , respectively.

[2] Included in long-term debt in the Condensed Consolidated Balance Sheets, except for any current maturities, which are included in short-term debt when applicable.

3 unchanged sentences

Net Realized Gains (Losses)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(Before tax) 2022 2021 2022 2021

12 unchanged sentences

Net realized gains (losses) $ ( 166 ) $ 70 $ ( 649 ) $ 297

[1] The net unrealized gains (losses) on equity securities still held as of June 30, 2022, and included in net realized gains (losses) were $( 259 ) and $( 366 ) for the three and six months ended June 30, 2022, respectively.

The net unrealized gains (losses) on equity securities still held as of June 30, 2021, and included in net realized gains (losses) were $ 80 and $ 118 for the three and six months ended June 30, 2021, respectively.

[2] For the three and six months ended June 30, 2022, includes gains (losses) from transactional foreign currency revaluation of $ 15 and $ 21 , respectively, and gains (losses) on non-qualifying derivatives of $ 14 and $ 61 , respectively.

For the three and six months ended June 30, 2021 includes gains (losses) from transactional foreign currency revaluation of $ 0 and $( 7 ), respectively, and non-qualifying derivatives of $( 29 ) and $ 6 , respectively.

Proceeds from the sales of fixed maturities, AFS totaled $ 2.6 billion and $ 8.1 billion for the three and six months ended June 30, 2022 , respectively and $ 4.0 billion and $ 8.2 billion for the three and six months ended ended June 30, 2021.

[1] The net unrealized gains (losses) on equity securities still held as of September 30, 2022, and included in net realized gains (losses) were $( 84 ) and $( 439 ) for the three and nine months ended September 30, 2022, respectively.

The net unrealized gains (losses) on equity securities still held as of September 30, 2021, and included in net realized gains (losses) were $( 17 ) and $ 92 for the three and nine months ended September 30, 2021, respectively.

[2] For the three and nine months ended September 30, 2022, includes gains (losses) from transactional foreign currency revaluation of $ 16 and $ 37 , respectively, and gains (losses) on non-qualifying derivatives of $( 19 ) and $ 42 , respectively.

For the three and nine months ended September 30, 2021 includes gains (losses) from transactional foreign currency revaluation of $ 6 and $( 1 ), respectively, and non-qualifying derivatives of $ 10 and $ 16 , respectively.

Proceeds from the sales of fixed maturities, AFS totaled $ 1.5 billion and $ 9.6 billion for the three and nine months ended September 30, 2022 , respectively and $ 2.9 billion and $ 11.1 billion for the three and nine months ended ended September 30, 2021.

Accrued Interest Receivable on Fixed Maturities, AFS and Mortgage Loans

As of June 30, 2022 and December 31, 2021, the Company reported accrued interest receivable related to fixed maturities, AFS of $ 309 and $ 299 , respectively, and accrued interest receivable related to mortgage loans of $ 18 and $ 16 , respectively.

As of September 30, 2022 and December 31, 2021, the Company reported accrued interest receivable related to fixed maturities, AFS of $ 322 and $ 299 , respectively, and accrued interest receivable related to mortgage loans of $ 18 and $ 16 , respectively.

These amounts are recorded in other assets on the Condensed Consolidated Balance Sheets and are not included in the carrying value of the fixed maturities or mortgage loans.

4 unchanged sentences

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

The Company will record an "intent-to-sell impairment" as a reduction to the amortized cost of fixed maturities, AFS in an unrealized loss position if the Company intends to sell or it is more likely than not that the Company will be required to sell the fixed maturity before a recovery in value.

A corresponding

charge is recorded in net realized losses equal to the difference between the fair value on the impairment date and the amortized cost basis of the fixed maturity before recognizing the impairment.

The Company will record an "intent-to-sell impairment" as a reduction to the amortized cost of fixed maturities, AFS in an unrealized loss position if the Company intends to sell or it is

more likely than not that the Company will be required to sell the fixed maturity before a recovery in value.

A corresponding charge is recorded in net realized losses equal to the difference between the fair value on the impairment date and the amortized cost basis of the fixed maturity before recognizing the impairment.

For fixed maturities where a credit loss has been identified and no intent-to-sell impairment has been recorded, the Company will record an ACL for the portion of the unrealized loss related to the credit loss.

6 unchanged sentences

Developing the Company’s best estimate of expected future cash flows is a quantitative and qualitative process that incorporates information received from third-party sources along with certain internal assumptions regarding the future performance.

The Company's considerations include, but are not limited to, (a) changes in the financial condition of the issuer and/or the underlying collateral, (b) whether the issuer is current on contractually obligated interest and principal payments, (c) credit ratings, (d) payment structure of the security and (e) the extent to which the fair value has been less than the amortized cost of the security.

Note 5 - Investments

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

extent to which the fair value has been less than the amortized cost of the security.

For non-structured securities, assumptions include, but are not limited to, economic and industry-specific trends and fundamentals, instrument-specific developments including changes in credit ratings, industry earnings multiples and the issuer’s ability to restructure, access capital markets, and execute asset sales.

For structured securities, assumptions include, but are not limited to, various performance indicators such as historical and

projected default and recovery rates, credit ratings, current and projected delinquency rates, loan-to-value ratios (" LTVs "), average cumulative collateral loss rates that vary by vintage year, prepayment speeds, and property value declines.

projected default and recovery rates, credit ratings, current and projected delinquency rates, loan-to-value (" LTV") ratios, average cumulative collateral loss rates that vary by vintage year, prepayment speeds, and property value declines.

These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries which may include estimating the underlying collateral value.

ACL on Fixed Maturities, AFS by Type

Three Months Ended June 30,

Three Months Ended September 30,

(Before tax) Corporate Foreign govt./govt.

1 unchanged sentence

Balance as of beginning of period $ 8 $ 4 $ 1 $ 13 $ 4 $ 4

Credit losses on fixed maturities where an allowance was not previously recorded — — 6 6 — —

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

Net increases (decreases) on fixed maturities where an allowance was previously recorded ( 1 ) 1 — — — —

Reduction due to intent to sell — ( 3 ) — ( 3 ) — —

Balance as of end of period $ 8 $ — $ 7 $ 15 $ 4 $ 4

ACL on Fixed Maturities, AFS by Type

Six Months Ended June 30,

Nine Months Ended September 30,

(Before tax) Corporate Foreign govt./govt.

3 unchanged sentences

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

Reduction due to intent to sell — ( 3 ) — ( 3 ) — —

Net increases (decreases) on fixed maturities where an allowance was previously recorded ( 1 ) 1 — — ( 6 ) ( 6 )

Balance as of end of period $ 8 $ — $ 7 $ 15 $ 4 $ 4

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fixed Maturities, AFS

Fixed Maturities, AFS, by Type

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Cost ACL Gross

10 unchanged sentences

Total fixed maturities, AFS $ 39,587 $ ( 15 ) $ 91 $ ( 3,946 ) $ 35,717 $ 40,788 $ ( 1 ) $ 2,204 $ ( 144 ) $ 42,847

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fixed Maturities, AFS, by Contractual Maturity Year

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Amortized Cost Fair Value Amortized Cost Fair Value

11 unchanged sentences

applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk.

The Company had no investment exposure to any credit concentration risk of a single issuer greater than 10% of the Company's stockholders' equity as of June 30, 2022 or December 31, 2021 other than U.S.

The Company had no investment exposure to any credit concentration risk of a single issuer greater than 10% of the Company's stockholders' equity as of September 30, 2022 or December 31, 2021 other than U.S.

government securities and certain U.S.

government agencies.

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unrealized Losses on Fixed Maturities, AFS

Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of June 30, 2022

Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of September 30, 2022

Less Than 12 Months 12 Months or More Total

23 unchanged sentences

Total fixed maturities, AFS in an unrealized loss position $ 10,933 $ ( 121 ) $ 608 $ ( 23 ) $ 11,541 $ ( 144 )

As of June 30, 2022, fixed maturities, AFS in an unrealized loss position consisted of 4,747 instruments, and were primarily depressed due to higher interest rates and/or wider credit

spreads since the purchase date.

As of June 30, 2022, 95 % of these fixed maturities were depressed less than 20% of cost or amortized cost.

The increase in unrealized losses during the six

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

months ended June 30, 2022, was primarily attributable to higher interest rates and wider credit spreads.

Most of the fixed maturities depressed for twelve months or more relate to the corporate sector, RMBS, and CLO which were primarily depressed because current rates are higher and/or market spreads are wider than at the respective purchase dates.

As of September 30, 2022, fixed maturities, AFS in an unrealized loss position consisted of 5,242 instruments, and were primarily depressed due to higher interest rates and/or wider credit spreads since the purchase date.

As of September 30, 2022, 88 % of these fixed maturities were depressed less than 20% of cost or amortized cost.

The increase in unrealized losses during the nine months ended September 30, 2022, was primarily attributable to higher interest rates and wider credit spreads.

Most of the fixed maturities depressed for twelve months or more relate to the corporate sector and RMBS which were primarily depressed because current rates are higher and/or market spreads are wider than at the respective purchase dates.

Additionally, certain corporate fixed maturities were also depressed because of their variable-rate coupons and long-dated maturities.

1 unchanged sentence

The decision to record credit losses on fixed maturities, AFS in the form of an ACL requires us to make qualitative and quantitative estimates of expected future cash flows.

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MORTGAGE LOANS

12 unchanged sentences

The Company records the change in the ACL on mortgage loans based on the weighted-average expected credit losses across the selected economic scenarios.

When a borrower is experiencing financial difficulty, including

when foreclosure is probable, the Company measures an ACL on individual mortgage loans.

When a borrower is experiencing financial difficulty, including when foreclosure is probable, the Company measures an ACL on individual mortgage loans.

The ACL is established for any shortfall between the amortized cost of the loan and the fair value of the collateral less costs to sell.

Estimates of collectibility from an individual borrower require the use of significant management judgment and include the probability and timing of borrower default and loss severity estimates.

In addition, cash flow projections may change based upon new information about the borrower's ability to pay and/or the value of underlying collateral such as changes in projected property value estimates.

As of June 30, 2022, the Company did no t have any mortgage loans for which an ACL was established on an individual basis.

There were no mortgage loans held-for-sale as of June 30, 2022 or December 31, 2021.

For the three and six months ended June 30, 2022 and 2021, respectively, the Company had no mortgage loans that have had extensions or restructurings other than what is allowable under the original terms of the contract.

In addition, cash flow projections may change based upon new information about

the borrower's ability to pay and/or the value of underlying collateral such as changes in projected property value estimates.

As of September 30, 2022, the Company did no t have any mortgage loans for which an ACL was established on an individual basis.

There were no mortgage loans held-for-sale as of September 30, 2022 or December 31, 2021.

For the three and nine months ended September 30, 2022 and 2021, respectively, the Company had no mortgage loans that have had extensions or restructurings other than what is allowable under the original terms of the contract.

ACL on Mortgage Loans

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

1 unchanged sentence

Current period provision (release) — 2 7 ( 12 )

ACL as of June 30, $ 36 $ 24 $ 36 $ 24

The increase in the allowance for the 2022 period i s primarily attributable to the potential impact of current economic conditions on real estate property valuations and net additions of new loans.

The weighted-average LTV ratio of the Company’s mortgage loan portfolio was 50 % as of June 30, 2022, while the weighted-average LTV ratio at origination of these loans was 59 %.

ACL as of September 30, $ 36 $ 26 $ 36 $ 26

The increase in the allowance for the 2022 period wa s primarily attributable to the deteriorating economic conditions and the potential impact on real estate property valuations, and to a lesser extent, net additions of new loans.

The weighted-average LTV ratio of the Company’s mortgage loan portfolio was 50 % as of September 30, 2022, while the weighted-average LTV ratio at origination of these loans was 59 %.

LTV ratios compare the loan amount to the value of the underlying property collateralizing the loan with property values based on appraisals updated no less than annually.

1 unchanged sentence

DSCR compares a property’s net operating income to the borrower’s principal and interest payments and are updated no less than annually through reviews of underlying properties.

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Mortgage Loans LTV & DSCR by Origination Year as of June 30, 2022

Mortgage Loans LTV & DSCR by Origination Year as of September 30, 2022

2022 2021 2020 2019 2018 2017 & Prior Total

11 unchanged sentences

[1]Amortized cost of mortgage loans excludes ACL of $ 36 .

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Mortgage Loans LTV & DSCR by Origination Year as of December 31, 2021

13 unchanged sentences

Mortgage Loans by Region

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Amortized Cost Percent of Total Amortized Cost Percent of Total

13 unchanged sentences

Mortgage Loans by Property Type

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Amortized Cost Percent of Total Amortized Cost Percent of Total

11 unchanged sentences

Mortgage loans are considered past due if a payment of principal or interest is not received according to the contractual terms of the loan agreement, which typically includes a grace period.

As of June 30, 2022 and December 31, 2021, the Company held no mortgage loans considered past due.

As of September 30, 2022 and December 31, 2021, the Company held no mortgage loans considered past due.

Mortgage Servicing

The Company originates, sells and services commercial mortgage loans on behalf of third parties and recognizes servicing fee income over the period that services are performed.

As of June 30, 2022, under this program, the Company serviced mortgage loans with a total outstanding

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

principal of $ 9.1 billion, of which $ 4.3 billion was serviced on behalf of third parties and $ 4.8 billion was retained and reported in total investments on the Company's Condensed Consolidated Balance Sheets.

As of September 30, 2022, under this program, the Company serviced mortgage loans with a total outstanding principal of $ 9.3 billion, of which $ 4.4 billion was serviced on behalf of third parties and $ 4.9 billion was retained and reported in total investments on the Company's Condensed Consolidated Balance Sheets.

As of December 31, 2021, the Company serviced mortgage loans with a total outstanding principal balance of $ 8.2 billion, of which $ 3.9 billion was serviced on behalf of third parties and $ 4.3 billion was retained and reported in total investments on the Company's Condensed Consolidated Balance Sheets.

Servicing rights are carried at the lower of cost or fair value and were $ 0 as of June 30, 2022 and December 31, 2021, because servicing fees were market-level fees at origination and remain adequate to compensate the Company for servicing the loans.

Servicing rights are carried at the lower of cost or fair value and were $ 0 as of September 30, 2022 and December 31, 2021, because servicing fees were market-level fees at origination and remain adequate to compensate the Company for servicing the loans.

VARIABLE INTEREST ENTITIES

4 unchanged sentences

Based on the Company’s assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in the Company’s Condensed Consolidated Financial Statements.

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated VIEs

As of June 30, 2022 and December 31, 2021, the Company did no t hold any securities for which it is the primary beneficiary.

As of September 30, 2022 and December 31, 2021, the Company did no t hold any securities for which it is the primary beneficiary.

Non-Consolidated VIEs

1 unchanged sentence

For these non-consolidated VIEs, the Company has determined it is not the primary beneficiary as it has no ability to direct activities that could significantly affect the economic performance of the investments.

The Company’s maximum exposure to loss as of June 30, 2022 and December 31, 2021 was limited to the total carrying value of $ 2.3 billion and $ 1.9 billion, respectively, which are a portion of the investments in limited partnerships and other alternative investments in the Company's Condensed Consolidated Balance Sheets that are primarily recorded using the equity method of accounting.

As of June 30, 2022 and December 31, 2021, the Company has outstanding commitments totaling $ 1.7 billion and $ 1.4 billion, respectively, whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses.

The Company’s maximum exposure to loss as of September 30, 2022 and December 31, 2021 was limited to the total carrying value of $ 2.4 billion and $ 1.9 billion, respectively, which are a portion of the investments in limited partnerships and other alternative investments in the Company's Condensed Consolidated Balance Sheets that are primarily recorded using the equity method of accounting.

As of September 30, 2022 and December 31, 2021, the Company has outstanding commitments totaling $ 1.7 billion and $ 1.4 billion, respectively, whereby the Company is committed to fund these investments and may be called by the partnership during the commitment period to fund the purchase of new investments and partnership expenses.

These investments are generally of a passive nature in that the Company does not take an active role in management.

For further discussion of these investments, see Equity Method

Investments within Note 6 - Investments of Notes to Consolidated Financial Statements included in the Company’s 2021 Form 10-K Annual Report.

For further discussion of these investments, see Equity Method Investments within Note 6 - Investments of Notes to Consolidated Financial Statements included in the Company’s 2021 Form 10-K Annual Report.

In addition, the Company makes passive investments in structured securities issued by VIEs for which the Company is not the manager.

5 unchanged sentences

Reverse Repurchase Agreements

From time to time, the Company enters into reverse repurchase agreements where the Company purchases securities and simultaneously agrees to resell the same or substantially the same securities.

From time to time, the Company enters into reverse repurchase agreements where the Company purchases securities and

simultaneously agrees to resell the same or substantially the same securities.

The maturity of these transactions is generally within one year.

1 unchanged sentence

The Company accounts for reverse repurchase agreements as collateralized financing.

As of June 30, 2022 and December 31, 2021, the Company reported $ 60 and $ 30 , respectively, within short-term investments on the Condensed Consolidated Balance Sheets representing a receivable for the amount of cash transferred to purchase the securities.

As of September 30, 2022 and December 31, 2021, the Company reported $ 91 and $ 30 , respectively, within short-term investments on the Condensed Consolidated Balance Sheets representing a receivable for the amount of cash transferred to purchase the securities.

Other Collateral Transactions

As of June 30, 2022 and December 31, 2021, the Company pledged collateral of $ 7 and $ 9 , respectively, of U.S.

As of September 30, 2022 and December 31, 2021, the Company pledged collateral of $ 7 and $ 9 , respectively, of U.S.

government securities or cash primarily related to certain bank loan participations committed through a limited partnership agreement.

2 unchanged sentences

The Company is required by law to deposit securities with government agencies in certain states in which it conducts business.

In addition, the Company is required to hold fixed maturities and short-term investments in trust for the benefit of syndicate policyholders, hold fixed maturities in a Lloyd's of

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

London ("Lloyd's") trust account to provide a portion of the required capital, and maintain other investments primarily consisting of overseas deposits in various countries with Lloyd's to support underwriting activities in those countries.

In addition, the Company is required to hold fixed maturities and short-term investments in trust for the benefit of syndicate policyholders, hold fixed maturities in a Lloyd's of London ("Lloyd's") trust account to provide a portion of the required capital, and maintain other investments primarily consisting of overseas deposits in various countries with Lloyd's to support underwriting activities in those countries.

Lloyd's is an insurance market-place operating worldwide.

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The following table presents the components of the Company’s exposure to other restricted investments.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Fair Value Fair Value

Securities on deposit with government agencies $ 2,078 $ 2,376

Fixed maturities in trust for benefit of syndicate policyholders 673 712

Short-term investments in trust for benefit of syndicate policyholders 6 7

Fixed maturities in trust for benefit of Lloyd's Syndicate policyholders 651 712

Short-term investments in trust for benefit of Lloyd's Syndicate policyholders 7 7

Fixed maturities in Lloyd's trust account 141 160

1 unchanged sentence

Total Other Restricted Investments $ 2,935 $ 3,320

Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company utilizes a variety of OTC, OTC-cleared and exchange traded derivative instruments as a part of its overall risk management strategy as well as to enter into replication transactions or income generation covered call transactions.

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The Company has also entered into interest rate swaps to convert the variable interest payments on 3 month London Inter-Bank Offered Rate ("LIBOR") + 2.125% junior subordinated debt to fixed interest payments.

information, see the Junior Subordinated Debentures section within Note 14 - Debt of Notes to the Consolidated Financial Statements, included in The Hartford's 2021 Form 10-K Annual Report.

For further information, see the Junior Subordinated Debentures section within Note 14 - Debt of Notes to the Consolidated Financial Statements, included in The Hartford's 2021 Form 10-K Annual Report.

Foreign currency swaps are used to convert foreign currency denominated cash flows related to certain investment receipts to U.S.

9 unchanged sentences

These contracts require the Company to pay or receive a periodic fee in exchange for compensation from the counterparty or the Company should the referenced security issuers experience a credit event, as defined in the contract.

The Company also enters into credit default swaps to terminate existing credit

Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

default swaps, thereby offsetting the changes in value of the original swap going forward.

The Company also enters into credit default swaps to terminate existing credit default swaps, thereby offsetting the changes in value of the original swap going forward.

Interest Rate Swaps, Swaptions and Futures

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In addition, the Company enters into interest rate swaps to terminate existing swaps, thereby offsetting the changes in value of the original swap going forward.

As of June 30, 2022 and December 31, 2021, the notional amount of interest rate swaps in offsetting relationships was $ 6.6 billion and $ 7.2 billion, respectively.

As of September 30, 2022 and December 31, 2021, the notional amount of interest rate swaps in offsetting relationships was $ 6.6 billion and $ 7.2 billion, respectively.

Foreign Currency Swaps and Forwards

1 unchanged sentence

Equity Index Options

The Company has previously entered into equity index options to hedge the impact of a decline in the equity markets on the investment portfolio.

The Company has also entered into covered call options on equity securities to generate additional return.

The Company may enter into equity index options to hedge the impact of a decline in the equity markets on the investment portfolio.

The Company has also previously entered into covered call options on equity securities to generate additional return.

Commodity Options

During the first quarter of 2022, the Company paid $ 10 to purchase call option contracts on oil futures in order to partially

offset potential changes in value related to certain fixed maturity securities that could arise if oil prices increased substantially.

During the first quarter of 2022, the Company paid $ 10 to purchase call option contracts on oil futures in order to partially offset potential changes in value related to certain fixed maturity securities that could arise if oil prices increased substantially.

The option contracts were either terminated or were closed by entering into offsetting positions during the first quarter of 2022, resulting in a realized gain of $ 14 .

1 unchanged sentence

For reporting purposes, the Company has elected to offset within assets or liabilities based upon the net of the fair value amounts, income accruals and related cash collateral receivables and payables of OTC derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset.

The following fair value amounts do not include income accruals or related cash collateral receivables and payables, which are netted with derivative fair value amounts to determine balance sheet presentation.

The following fair value amounts do not

Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

include income accruals or related cash collateral receivables and payables, which are netted with derivative fair value amounts to determine balance sheet presentation.

The Company’s derivative instruments are held for risk management purposes, unless otherwise noted in the following table.

The notional amount of derivative contracts represents the basis upon which payments or receipts are calculated and is presented in the table to quantify the volume of the Company’s derivative activity.

The notional amount of derivative contracts represents the basis

upon which payments or receipts are calculated and is presented in the table to quantify the volume of the Company’s derivative activity.

Notional amounts are not necessarily reflective of credit risk.

3 unchanged sentences

Notional Amount Fair Value Fair Value Fair Value

Hedge Designation/ Derivative Type Jun 30, 2022 Dec.

31, 2021 Jun 30, 2022 Dec.

Hedge Designation/ Derivative Type Sep 30, 2022 Dec.

31, 2021 Sep 30, 2022 Dec.

Cash flow hedges

17 unchanged sentences

Total derivatives $ 11,454 $ 11,224 $ 86 $ ( 42 ) $ 102 $ 17 $ ( 16 ) $ ( 59 )

Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Offsetting of Derivative Assets/Liabilities

3 unchanged sentences

Also included in the tables are financial collateral receivables and payables, which are contractually permitted to be offset upon an event of default, although are disallowed for offsetting under U.S.

Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Offsetting Derivative Assets and Liabilities

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Gross Amounts of Recognized Assets (Liabilities) Gross Amounts Offset in the Statement of Financial Position Derivative Assets [1] (Liabilities) [2] Accrued Interest and Cash Collateral (Received) [3] Pledged [2] Financial Collateral (Received) Pledged [4] Net Amount

As of June 30, 2022

As of September 30, 2022

Other investments $ 102 $ 98 $ 12 $ ( 8 ) $ 3 $ 1

12 unchanged sentences

Gain (Loss) Recognized in OCI

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

3 unchanged sentences

Gain (Loss) Reclassified from AOCI into Income

Three months ended June 30, Six Months Ended June 30,

Three months ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

4 unchanged sentences

Total amounts presented on the Condensed Consolidated Statement of Operations $ 487 $ 50 $ 650 $ 58 $ 1,537 $ 163 $ 1,740 $ 172

As of September 30, 2022, the before tax deferred net losses on derivative instruments recorded in AOCI that are expected to be reclassified to earnings during the next twelve months are $ 3 .

This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities and long-term debt that will occur over the next twelve months.

At that time, the Company will recognize the deferred net gains (losses) as an adjustment to net investment income or interest expense,

as applicable, over the term of the hedged instrument cash flows.

During the three and nine months ended September 30, 2022 and 2021, the Company had no net reclassifications from AOCI to earnings resulting from the discontinuance of cash-flow hedges due to forecasted transactions that were no longer probable of occurring.

Note 6 - Derivatives

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2022, the before tax deferred net losses on derivative instruments recorded in AOCI that are expected to be reclassified to earnings during the next twelve months are $ 2 .

This expectation is based on the anticipated interest payments on hedged investments in fixed maturity securities and long-term debt that will occur over the next twelve months.

At that time, the Company will recognize the deferred net gains (losses) as an adjustment to net investment income or interest expense, as applicable, over the term of the hedged instrument cash flows.

During the three and six months ended June 30, 2022 and 2021, the Company had no net reclassifications from AOCI to

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

NON-QUALIFYING STRATEGIES

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

For non-qualifying strategies, including embedded derivatives that are required to be bifurcated from their host contracts and

accounted for as derivatives, the gain or loss on the derivative is recognized currently in earnings within net realized gains (losses).

Non-Qualifying Strategies Recognized within Net Realized Gains (Losses)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

6 unchanged sentences

Credit derivatives that assume credit risk — — — 6

Equity contracts

Equity options ( 2 ) — ( 2 ) —

Commodity contracts

16 unchanged sentences

Obligation(s) [1]

As of June 30, 2022

As of September 30, 2022

Basket credit default swaps [4]

19 unchanged sentences

The Company enters into various collateral arrangements in connection with its derivative instruments, which require both the pledging and accepting of collateral.

As of June 30, 2022 and December 31, 2021, the Company ha s pl edged cash collateral associated with derivative instruments of $ 0 and $ 2 , respectively .

As of September 30, 2022 and December 31, 2021, the Company ha s pl edged cash collateral associated with derivative instruments of less than $ 1 and $ 2 , respectively .

In general, collateral receivable is recorded in other assets or other liabilities on the Company's Condensed Consolidated Balance Sheets as determined by the Company's election to offset on the balance sheet.

As of June 30, 2022 and December 31, 2021, the Company pledged securities collateral associated with derivative instruments with a fair value of $ 16 and $ 48 , respectively, which have been included in fixed maturities on the Company's Condensed Consolidated Balance Sheets.

As of September 30, 2022 and December 31, 2021, the Company pledged securities collateral associated with derivative instruments with a fair value of $ 8 and $ 48 , respectively, which have been included in fixed maturities on the Company's Condensed Consolidated Balance Sheets.

The counterparties generally have the right to sell or re-pledge these securities.

In addition, as of June 30, 2022 and December 31, 2021, the Company has pledged initial margin of cash related to OTC-cleared and exchange traded derivatives with a fair value of $ 16 and $ 12 , respectively, which is recorded in other investments or other assets on the Company's Condensed Consolidated Balance Sheets.

As of June 30, 2022 and December 31, 2021, the Company has pledged initial margin of securities related to OTC-cleared and exchange traded derivatives with a fair value of $ 21 and $ 82 , respectively, which are included within fixed maturities on the Company's Condensed Consolidated Balance

As of June 30, 2022 and December 31, 2021, the Company accepted cash collateral associated with derivative instruments of $ 40 and $ 7 , respectively, which was invested and recorded in the Company's Condensed Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other investments or other liabilities as determined by the Company's election to offset on the balance sheet.

The Company also accepted securities collateral as of June 30, 2022 and December 31, 2021, with a fair value of $ 17 and $ 5 , respectively, which the Company has the right to repledge or sell.

As of June 30, 2022 and December 31, 2021, the Company had no repledged securities.

In addition, as of June 30, 2022 and December 31, 2021, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Condensed Consolidated Balance Sheets .

In addition, as of September 30, 2022 and December 31, 2021, the Company has pledged initial margin of cash related to OTC-cleared and exchange traded derivatives with a fair value of $ 16 and $ 12 , respectively, which is recorded in other investments or other assets on the Company's Condensed Consolidated Balance Sheets.

As of September 30, 2022 and December 31, 2021, the Company has pledged initial margin of securities related to OTC-cleared and exchange traded derivatives with a fair value of $ 38 and $ 82 , respectively, which are included within fixed maturities on the Company's Condensed Consolidated

Balance Sheets.

As of September 30, 2022 and December 31, 2021, the Company accepted cash collateral associated with derivative instruments of $ 101 and $ 7 , respectively, which was invested and recorded in the Company's Condensed Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other investments or other liabilities as determined by the Company's election to offset on the balance sheet.

The Company also accepted securities collateral as of September 30, 2022 and December 31, 2021, with a fair value of $ 3 and $ 5 , respectively, which the Company has the right to repledge or sell.

As of September 30, 2022 and December 31, 2021, the Company had no repledged securities.

In addition, as of September 30, 2022 and December 31, 2021, non-cash collateral accepted was held in separate custodial accounts and was not included in the Company’s Condensed Consolidated Balance Sheets .

Note 7 - Premiums Receivable and Agents' Balances

3 unchanged sentences

Premiums Receivable and Agents' Balances

As of June 30, 2022 As of December 31, 2021

As of September 30, 2022 As of December 31, 2021

Premiums receivable, excluding receivables for losses within a deductible and retrospectively-rated policy premiums ("loss sensitive business") $ 4,690 $ 4,130

8 unchanged sentences

Balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods.

The Company had an immaterial amount of receivables with a due date of more than one year that are past-due.

Premiums receivable and agents' balances, excluding receivables for loss sensitive business, are primarily comprised of premiums due from policyholders, which are typically collectible within one year or less.

1 unchanged sentence

A portion of the Company's Commercial Lines business is written with large deductibles or under retrospectively-rated plans (referred to as "loss sensitive business").

Under some commercial insurance contracts with a large deductible, the

Company is obligated to pay the claimant the full amount of the claim and the Company is subsequently reimbursed by the policyholder for the deductible amount.

Under some commercial insurance contracts with a large deductible, the Company is obligated to pay the claimant the full amount of the claim and the Company is subsequently reimbursed by the

policyholder for the deductible amount.

As such, the Company is subject to credit risk until reimbursement is made.

12 unchanged sentences

See Note 5 - Investments.

The increase in the ACL in the three and six months ended June 30, 2022 reflected the provision required on premiums written in the quarter and recoveries, offset by write-offs.

During the three and six months ended ended June 30, 2021, the ACL on premiums receivable decreased as the provision required on premiums written in the quarter was more than offset by write-offs and a reduction in the provision reflecting lessening expected impacts of COVID-19 relative to prior assumptions in certain lines of business.

The increase in the ACL in the three and nine months ended September 30, 2022 reflected the provision required on premiums written in the quarter and recoveries, offset by write-offs.

During the three and nine months ended September 30, 2021, the ACL on premiums receivable decreased as the provision required on premiums written in the quarter was more than offset by write-offs and a reduction in the provision reflecting lessening expected impacts of COVID-19 relative to prior assumptions in certain lines of business.

Note 7 - Premiums Receivable and Agents' Balances

2 unchanged sentences

Rollforward of ACL on Premiums Receivable and Agents' Balances for the Three Months Ended

June 30, 2022 June 30, 2021

September 30, 2022 September 30, 2021

Premiums Receivable and Agents' Balances, Excluding Receivables for Loss Sensitive Business Receivables for Loss Sensitive Business Total Premiums Receivable and Agents' Balances, Excluding Receivables for Loss Sensitive Business Receivables for Loss Sensitive Business Total

4 unchanged sentences

Ending ACL $ 85 $ 23 $ 108 $ 87 $ 37 $ 124

Rollforward of ACL on Premiums Receivable and Agents' Balances for the Six Months Ended

June 30, 2022 June 30, 2021

Rollforward of ACL on Premiums Receivable and Agents' Balances for the Nine Months Ended

September 30, 2022 September 30, 2021

20 unchanged sentences

Reinsurance Recoverables by Credit Quality Indicator

As of June 30, 2022 As of December 31, 2021

As of September 30, 2022 As of December 31, 2021

Property and Casualty

43 unchanged sentences

As a result, there is limited history of losses from insurer defaults.

The decrease in the ACL for the six months ended June 30, 2021 was primarily due to higher than expected recovery from one reinsurer on which the Company had recognized an ACL.

The decrease in the ACL for the nine months ended September 30, 2021 was primarily due to higher than expected recovery from one reinsurer on which the Company had recognized an ACL.

Note 8 - Reinsurance

2 unchanged sentences

Allowance for Uncollectible Reinsurance for the Three Months Ended

June 30, 2022 June 30, 2021

September 30, 2022 September 30, 2021

Property and Casualty Group Benefits Corporate Total Property and Casualty Group Benefits Corporate Total

9 unchanged sentences

$ 102 $ 1 $ 2 $ 105 $ 96 $ 1 $ 2 $ 99

Allowance for Uncollectible Reinsurance for the Six Months Ended

June 30, 2022 June 30, 2021

Allowance for Uncollectible Reinsurance for the Nine Months Ended

September 30, 2022 September 30, 2021

Property and Casualty Group Benefits Corporate Total Property and Casualty Group Benefits Corporate Total

15 unchanged sentences

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

For the six months ended June 30,

For the nine months ended September 30,

Beginning liabilities for unpaid losses and loss adjustment expenses, gross

24 unchanged sentences

Unfavorable (Favorable) Prior Accident Year Development

For the six months ended June 30,

For the nine months ended September 30,

Workers’ compensation $ ( 143 ) $ ( 113 )

1 unchanged sentence

General liability 33 451

Marine ( 3 ) 1

Package business ( 35 ) ( 66 )

12 unchanged sentences

Total prior accident year development $ ( 147 ) $ 170

[1]The change in deferred gain for the six months ended June 30, 2021 included $ 45 of adverse development on Navigators 2018 and prior accident year reserves, primarily driven by professional liability.

Re-estimates of prior accident year reserves for the six months ended June 30, 2022

Workers’ compensation reserves were decreased for the 2014 through 2018 accident years, predominately within small commercial, driven by lower than previously estimated claim severity.

[1]The change in deferred gain for the nine months ended September 30, 2021 included $ 73 of adverse development on Navigators 2018 and prior accident year reserves, primarily driven by professional liability.

Re-estimates of prior accident year reserves for the nine months ended September 30, 2022

Workers’ compensation reserves were decreased for the 2014 through 2018 accident years, predominately within small commercial, driven by lower than previously estimated claim severity and, to a lesser extent, a $ 14 reduction of COVID-19 related claims from 2020.

General liability reserves were increased, driven by an increase in the estimated cost to settle large individual claims in middle and large commercial for the 2016 to 2019 accident years, an increase in excess casualty for the 2019 accident year, and increases in primary construction on older accident years, partially offset by a decrease in reserves for other mass torts.

Package business reserves decreased due to lower estimated loss adjustment expenses for accident years 2015 to 2018 and a reduction in property reserves for the 2020 and 2021 accident years.

Package business reserves decreased due to lower estimated severity and lower estimated loss adjustment expenses for accident years 2013 to 2018 and a reduction in property reserves for the 2020 and 2021 accident years.

Commercial property reserves were decreased primarily due to favorable development for the 2020 accident year in middle & large commercial related to COVID-19 claims and a reduction in property reserves for the 2021 accident year.

Professional liability reserves were decreased primarily due to favorable development on directors’ and officers’ claims for the 2018 to 2020 accident years and on

errors and omissions claims for the 2013 to 2017 accident years, partially offset by large losses related to 2018 and prior accident years for primary and excess directors’ and officers’ claims.

Professional liability reserves were decreased primarily due to favorable development on directors’ and officers’ claims for the 2018 to 2020 accident years and on errors and omissions claims for the 2013 to 2017 accident years, partially offset by large losses related to 2018 and prior accident years for primary and excess directors’ and officers’ claims.

Assumed reinsurance reserves were increased primarily due to higher reserve estimates for syndicate property claims, including higher expected COVID-19 property losses in the 2020 accident year and increased reserves for international agriculture related to drought claims.

2 unchanged sentences

Other reserve re-estimates, net, were increased primarily due to an increase in automobile physical damage severity and unfavorable development from participation in involuntary market pools.

Re-estimates of prior accident year reserves for the six months ended June 30, 2021

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

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

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

General liability reserves were increased including an increase for sexual molestation and sexual abuse claims above the amount of reserves previously recorded for this exposure, primarily to reflect an increase in reserves for claims made against the Boy Scouts of America ("BSA") as discussed further below, partially offset by reserve decreases for other mass torts and extra contractual liability claims.

In addition, the Company recognized reserve increases on Navigators’ wholesale construction business for 2018 and prior accident years included in the change in deferred gain on retroactive reinsurance in the above table.

Package business reserves decreased largely due to lower estimated loss adjustment expenses for accident years 2014 to 2018 and a reduction in estimated reserves for extra contractual liability claims.

2 unchanged sentences

More than offsetting this favorable reserve development were reserve increases on legacy Navigators public company directors’ and officers’ insurance for 2018 and prior accident years which is reflected within the change in deferred gain on retroactive reinsurance in the above table.

Bond reserves were reduced mostly due to favorable emergence on contract surety claims driven by higher than previously anticipated recoveries, largely for the 2016 to 2017 accident years.

Automobile liability reserves were decreased in Personal Lines principally due to lower estimated severity on

Note 9 - Reserves for Unpaid Losses and Loss Adjustment Expenses

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AARP Direct and Agency claims, primarily within accident years 2015 to 2020, and a reduction in estimated reserves for extra contractual liability claims.

Bond reserves were reduced mostly due to favorable emergence on contract surety claims driven by higher than previously anticipated recoveries, largely for the 2016 to 2017 accident years.

Automobile liability reserves were decreased in Personal Lines principally due to lower estimated severity on AARP Direct and Agency claims, primarily within accident years 2017 to 2020, and a reduction in estimated reserves for extra contractual liability claims.

Catastrophes reserves were decreased in both Commercial and Personal Lines primarily driven by a reduction in reserves for 2019 and 2020 wind and hail events, lower estimated losses from 2017 and 2018 hurricanes and a reduction in estimated losses from the 2017 and 2018 California wildfires, including an expected recovery of subrogation from a utility related to the 2018 Woolsey wildfire in California.

6 unchanged sentences

In addition, the representatives for the claimants joining this agreement-in-principle will support a plan of reorganization which incorporates the settlement.

The agreement-in-principle was reached in connection with BSA’s Chapter 11 bankruptcy and a written settlement agreement (the "Settlement") was executed on February 14, 2022.

The Settlement will become final upon the occurrence of certain conditions, including, but not limited to, confirmation of BSA’s plan of reorganization, receipt of executed releases from the local councils, and approval of the Settlement as part of the confirmation of BSA's plan of reorganization by the bankruptcy and district courts.

While the confirmation hearing regarding BSA’s bankruptcy plan concluded in April, a final decision from the bankruptcy court on whether to approve BSA's plan of reorganization is not expected until later in third quarter 2022, with civil district court approval expected after that.

The agreement-in-principle was reached in connection with the BSA’s Chapter 11 bankruptcy and a written settlement agreement (the "Settlement") was executed on February 14, 2022.

The Settlement will become final upon the occurrence of certain conditions, including, but not limited to, confirmation of the BSA’s plan of reorganization by both the bankruptcy and district courts, receipt of executed releases from the local councils, and approval of the Settlement as part of the confirmation of the BSA's plan of reorganization by the bankruptcy and district courts.

On September 8, 2022, the bankruptcy court approved the BSA's plan of reorganization, including the Settlement.

The BSA's plan of reorganization is now before the civil district court for approval.

Upon civil district court approval, the Company will pay the settlement amount of $ 787 .

However, no assurance can be given that all the conditions precedent to the Settlement will be satisfied or that final court approval, if obtained, will not be delayed for various procedural reasons.

If the conditions precedent to the Settlement are not satisfied or the requisite court approvals for BSA’s plan of reorganization are not obtained, it is possible that adverse outcomes, if any, could have a material adverse effect on the Company’s consolidated operating results.

However, no assurance can be given that all the conditions precedent to the Settlement will be satisfied or that

final court approval, if obtained, will not be delayed for various procedural reasons.

If the conditions precedent to the Settlement are not satisfied or the requisite court approvals for the BSA’s plan of reorganization are not obtained, it is possible that adverse outcomes, if any, could have a material adverse effect on the Company’s consolidated operating results.

Adverse Development Covers

7 unchanged sentences

Cumulative ceded losses exceeding the $ 650 reinsurance premium paid result in a deferred gain.

As of June 30, 2022, the Company has incurred $ 1,015 in cumulative adverse development on asbestos and environmental reserves that have been ceded under the A&E ADC treaty with NICO with $ 485 of available limit remaining under the A&E ADC.

As of September 30, 2022, the Company has incurred $ 1,015 in cumulative adverse development on asbestos and environmental reserves that have been ceded under the A&E ADC treaty with NICO with $ 485 of available limit remaining under the A&E ADC.

As a result, the Company has recorded a $ 365 deferred gain within other liabilities, representing the difference between the reinsurance recoverable of $ 1,015 and ceded premium paid of $ 650 .

2 unchanged sentences

Immediately after closing on the acquisition of Navigators Group, effective May 23, 2019, the Company purchased the Navigators ADC, an aggregate excess of loss reinsurance agreement covering adverse reserve development, from NICO, on behalf of Navigators Insurers.

Under the Navigators ADC, the Navigators Insurers paid NICO a reinsurance premium of $ 91 in exchange for reinsurance coverage of $ 300 of adverse net loss reserve development that attaches $ 100 above the Navigators Insurers' existing net loss and allocated loss adjustment reserves as of December 31, 2018 subject to the treaty of $ 1.816 billion for accidents and losses prior to December 31, 2018.

As of June 30, 2022, the Company has recorded a reinsurance recoverable under the Navigators ADC of $ 300 , as estimated cumulative loss development on the 2018 and prior accident year reserves has exhausted the treaty limit.

Note 9 - Reserves for Unpaid Losses and Loss Adjustment Expenses

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

reinsurance recoverable is $ 300 , the Company has recorded a $ 209 cumulative deferred gain within other liabilities since, under retroactive reinsurance accounting, ceded losses in excess of the $ 91 of ceded premium paid must be recognized

as a deferred gain.

reserves as of December 31, 2018 subject to the treaty of $ 1.816 billion for accidents and losses prior to December 31, 2018.

As of September 30, 2022, the Company has recorded a reinsurance recoverable under the Navigators ADC of $ 300 , as estimated cumulative loss development on the 2018 and prior accident year reserves has exhausted the treaty limit.

While the reinsurance recoverable is $ 300 , the Company has recorded a

$ 209 cumulative deferred gain within other liabilities since, under retroactive reinsurance accounting, ceded losses in excess of the $ 91 of ceded premium paid must be recognized as a deferred gain.

The deferred gain is recognized over the claim settlement period in the proportion of the amount of cumulative ceded losses collected from the reinsurer to the estimated ultimate reinsurance recoveries.

1 unchanged sentence

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

For the six months ended June 30,

For the nine months ended September 30,

Beginning liabilities for unpaid losses and loss adjustment expenses, gross $ 8,210 $ 8,233

13 unchanged sentences

[1] Prior incurral year development represents the change in estimated ultimate incurred losses and loss adjustment expenses for prior incurral years on a discounted basis.

[2] Includes unallocated loss adjustment expenses ("ULAE") of $ 92 and $ 87 for the six months ended June 30, 2022 and 2021, respectively, that are recorded in insurance operating costs and other expenses in the Condensed Consolidated Statements of Operations .

Re-estimates of prior incurral years reserves for the six months ended June 30, 2022

Group disability- Prior period reserve estimates decreased by approximately $ 195 largely driven by group long-term disability claim incidence lower than prior assumptions together with strong recoveries on prior incurral year claims.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $ 40 largely driven by continued low incidence in group life premium waiver as well as a reduction in estimated excess mortality group term life losses incurred in fourth quarter 2021.

[2] Includes unallocated loss adjustment expenses ("ULAE") of $ 138 and $ 131 for the nine months ended September 30, 2022 and 2021, respectively, that are recorded in insurance operating costs and other expenses in the Condensed Consolidated Statements of Operations .

Re-estimates of prior incurral years reserves for the nine months ended September 30, 2022

Group disability- Prior period reserve estimates decreased by approximately $ 275 largely driven by group long-term disability claim incidence lower than prior assumptions, strong recoveries on prior incurral year claims and higher estimated claim termination rates.

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

Re-estimates of prior incurral years reserves for the six months ended June 30, 2021

Group disability- Prior period reserve estimates decreased by approximately $ 240 largely driven by group long-term disability claim incidence lower than prior assumptions together with strong recoveries on prior incurral year claims.

Also contributing was group short-term disability non-COVID-19 claim incidence lower than previously expected and a New York Paid Family Leave risk adjustment benefit.

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

Group disability- Prior period reserve estimates decreased by approximately $ 320 largely driven by group long-term disability claim incidence lower than prior assumptions together with strong recoveries on prior incurral year claims, and a New York Paid Family Leave risk adjustment benefit.

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

1 unchanged sentence

Note 10 - Reserve for Future Policy Benefits

T HE HARTFORD FINANCIAL SERVICES GROUP, INC.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

Changes in Reserves for Future Policy Benefits[1]

For the six months ended June 30,

For the nine months ended September 30,

Beginning liability balance $ 596 $ 638

14 unchanged sentences

Note 12 - Income Taxes

T HE HARTFORD FINANCIAL SERVICES GROUP, INC.

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

Income Tax Rate Reconciliation

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Tax-exempt interest ( 9 ) ( 10 ) ( 26 ) ( 31 )

Increase in deferred tax valuation allowance 6 ( 1 ) 14 6

Tax credits ( 7 ) ( 8 ) ( 10 ) ( 9 )

Other 11 ( 2 ) 1 ( 25 )

2 unchanged sentences

Rollforward of Unrecognized Tax Benefits

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2022 2021 2022 2021

1 unchanged sentence

Gross increases - tax positions in current period 3 5 5 5

Lapse of statute of limitations — ( 5 ) — ( 5 )

Balance, end of period $ 21 $ 15 $ 21 $ 15

The entire amount of unrecognized tax benefits, if recognized, would affect the effective tax rate in the period of the release.

In the three and nine months ended September 30, 2021, the Company recognized $ 5 of its previously unrecognized tax benefits associated with dividends from segregated asset accounts of the life and annuity business sold in 2018.

This liability was subject to a tax indemnification agreement and a corresponding receivable included in other assets was taken down upon lapse of the statute of limitations.

OTHER TAX MATTERS

As of June 30, 2022, the Company has a deferred tax asset for foreign net operating losses of $ 36 partially offset by a valuation allowance of $ 15 .

As of September 30, 2022, the Company has a deferred tax asset for foreign net operating losses of $ 36 partially offset by a valuation allowance of $ 21 .

While the foreign net operating losses (" NOLs ") do not expire, this assessment reflects uncertainty in the Company's ability to generate sufficient taxable income in the near term in those specific jurisdictions.

10 unchanged sentences

The Hartford accounts for such activity through the establishment of unpaid loss and loss adjustment expense reserves.

Subject to the uncertainties related to sexual molestation and sexual abuse claims discussed in Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of this Form 10-Q and in Note 12 - Reserve for Unpaid Losses and Loss Adjustment Expenses, of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, and in the following discussion under the caption “COVID-19 Pandemic Business Income Insurance Litigation” and under the caption “Run-off Asbestos and Environmental Claims,” management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

Business Income Insurance Litigation” and under the caption “Run-off Asbestos and Environmental Claims,” management expects that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and costs of defense, will not be material to the consolidated financial condition, results of operations or cash flows of The Hartford.

The Hartford is also involved in other kinds of legal actions, some of which assert claims for substantial amounts.

2 unchanged sentences

The Hartford also is involved in individual actions in which punitive damages are sought, such as claims alleging bad faith in the handling of insurance claims or other allegedly unfair or improper business practices.

Like many other insurers, The Hartford also has been joined in actions by asbestos plaintiffs asserting, among other things, that insurers had a duty to protect the public from the dangers of asbestos and that insurers committed unfair trade practices by asserting defenses on behalf of their policyholders in the underlying asbestos cases.

Management expects that the ultimate liability, if any, with respect to such lawsuits, after consideration of provisions made for estimated losses, will not be material to the consolidated financial condition of The Hartford.

Nonetheless, given the large or indeterminate amounts sought in certain of these actions, and the inherent unpredictability of litigation, the outcome in certain matters could, from time to time, have a material adverse effect on the Company’s results of operations or cash flows in particular quarterly or annual periods.

Like many other insurers, The Hartford also has been joined in actions by asbestos plaintiffs asserting, among other things, that

Note 13 - Commitments and Contingencies

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

insurers had a duty to protect the public from the dangers of asbestos and that insurers committed unfair trade practices by asserting defenses on behalf of their policyholders in the underlying asbestos cases.

COVID-19 Pandemic Business Income Insurance Litigation

9 unchanged sentences

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

In addition to the inherent difficulty in predicting litigation outcomes, the COVID-19 pandemic business income coverage lawsuits present numerous uncertainties and contingencies that are not yet fully known, including how many policyholders will ultimately file claims, the number of lawsuits that will be filed, the extent to which any state or nationwide classes will be certified, and the size and scope of any such classes.

In addition to the inherent difficulty in predicting litigation outcomes, the COVID-19 pandemic business income coverage

lawsuits present numerous uncertainties and contingencies that are not yet fully known, including how many policyholders will ultimately file claims, the number of lawsuits that will be filed, the extent to which any state or nationwide classes will be certified, and the size and scope of any such classes.

The legal theories advocated by plaintiffs vary significantly by case as do the state laws that govern the policy interpretation.

These lawsuits are at various stages of litigation:

some are in the earliest stages of litigation, many complaints are in the process of being amended, some have been dismissed voluntarily and may be refiled, while others have been dismissed through rulings in favor of the Hartford Writing Companies.

some are in the earliest stages of litigation, some complaints may be amended, some have been dismissed voluntarily and may be refiled, while many have been dismissed through rulings in favor of the Hartford Writing Companies.

Discovery is underway in certain single plaintiff cases and class actions.

More than 50 policyholders have appealed dismissals in favor of the Hartford

Writing Companies.

To date, The Hartford Writing Companies have received eight appellate affirmances of trial court decisions in the Hartford Writing Companies' favor, including two decisions from the Second Circuit, and decisions from the Fifth, Sixth, Seventh, Eighth, and Eleventh Circuit Courts of Appeal, as well as one state appellate court.

More than 50 policyholders have appealed dismissals in favor of the Hartford Writing Companies.

To date, The Hartford Writing Companies have received nine appellate affirmances of trial court decisions in the Hartford Writing Companies' favor, including three decisions from the Second Circuit, and decisions from the Fifth, Sixth, Seventh, Eighth, and Eleventh Circuit Courts of Appeal, as well as one state appellate court.

The remainder of the Hartford Writing Companies' appeals are at various stages of the process.

13 unchanged sentences

Significant uncertainty limits the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid gross losses and expenses related to environmental and asbestos claims.

The degree of variability of gross reserve estimates for these exposures is significantly greater than for other more traditional exposures.

In the case of the reserves for asbestos exposures, factors contributing to the high degree of uncertainty include inadequate loss development patterns, plaintiffs’ expanding theories of liability, the risks inherent in major litigation, and inconsistent and emerging legal doctrines with respect to the underlying claims and with respect to the Company's coverage obligations.

Furthermore, over time, insurers, including the Company, have experienced significant changes in the rate at which asbestos claims are brought, the claims experience of particular insureds, and the value of claims, making predictions of future exposure

The degree of variability of gross reserve estimates for

Note 13 - Commitments and Contingencies

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

from past experience uncertain.

these exposures is significantly greater than for other more traditional exposures.

Plaintiffs and insureds also have sought to use bankruptcy proceedings, including “pre-packaged” bankruptcies, to accelerate and increase loss payments by insurers.

11 unchanged sentences

While the Company believes that its current A&E reserves are appropriate, significant uncertainties limit the ability of insurers and reinsurers to estimate the ultimate reserves necessary for unpaid losses and related expenses.

The ultimate liabilities, thus, could exceed the currently recorded reserves, and any such additional liability, while not estimable now, could be material to The Hartford’s consolidated operating results and liquidity.

For its Run-off A&E, as of June 30, 2022, the Company reported $ 485 of net asbestos and environmental reserves.

The ultimate liabilities,

thus, could exceed the currently recorded reserves, and any such additional liability, while not estimable now, could be material to The Hartford’s consolidated operating results or liquidity.

For its Run-off A&E, as of September 30, 2022, the Company reported $ 455 of net asbestos and environmental reserves.

In addition, the Company has recorded a $ 365 deferred gain within other liabilities for losses economically ceded to NICO but for which the benefit is not recognized in earnings until later periods.

While the Company believes that its current run-off A&E reserves are appropriate, significant uncertainties limit our ability to estimate the ultimate reserves necessary for unpaid losses

and related expenses.

The ultimate liabilities, thus, could exceed the currently recorded reserves, and any such additional liability, while not reasonably estimable now, could be material to The Hartford's consolidated operating results and liquidity.

While the Company believes that its current run-off A&E reserves are appropriate, significant uncertainties limit our ability to estimate the ultimate reserves necessary for unpaid losses and related expenses.

The Company’s A&E ADC reinsurance agreement with NICO reinsures substantially all A&E reserve development for 2016 and prior accident years, including Run-off A&E and A&E reserves included in Commercial Lines and Personal Lines.

The A&E ADC has a coverage limit of $ 1.5 billion above the Company’s existing net A&E reserves as of December 31, 2016 of approximately $ 1.7 billion.

As of June 30, 2022 , the Company has incurred $ 1,015 in cumulative adverse development on A&E reserves that have been ceded under the A&E ADC treaty with NICO, leaving $ 485 of coverage available for future adverse net reserve development, if any.

As of September 30, 2022 , the Company has incurred $ 1,015 in cumulative adverse development on A&E reserves that have been ceded under the A&E ADC treaty with NICO, leaving $ 485 of coverage available for future adverse net reserve development, if any.

Cumulative adverse development of A&E claims for accident years 2016 and prior could ultimately exceed the $ 1.5 billion treaty limit in which case any adverse development in excess of the treaty limit would be absorbed as a charge to earnings by the Company.

6 unchanged sentences

If the termination rights were to be exercised by the counterparties, it could impact the legal entity’s ability to conduct hedging activities by increasing the associated costs and decreasing the willingness of counterparties to transact with the legal entity.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of June 30, 2022 was $ 22 for which the legal entities have posted collateral of $ 16 in the normal course of business.

Based on derivative contractual terms as of June 30, 2022, a downgrade of the current financial strength ratings by either Moody's or S&P would no t require additional assets to be posted as collateral.

This requirement could change as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of September 30, 2022 was $ 10 for which the legal entities have posted collateral of $ 8 in the normal course of business.

Based on derivative contractual terms as of September 30, 2022, a downgrade of the current financial strength ratings by either Moody's or S&P would no t require additional assets to be posted as collateral.

This requirement could change as a result

Note 13 - Commitments and Contingencies

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of changes in our hedging activities or to the extent changes in contractual terms are negotiated.

The nature of the additional collateral that we would post, if required, would be primarily in the form of U.S.

1 unchanged sentence

Treasury notes and government agency securities.

Note 14 - Equity

T HE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

EQUITY REPURCHASE PROGRAM

During the six months ended June 30, 2022 and 2021, the Company repurchased $ 850.0 ( 12.0 million shares) and $ 691 ( 11.0 million shares), respectively, of common stock under the $ 3.0 billion share repurchase authorization that is effective January 1, 2021 until December 31, 2022 as authorized by the Board of Directors.

As of June 30, 2022, The Hartford has $ 448 remaining for equity repurchases under this share repurchase program.

During the period July 1, 2022 through July 27, 2022, the Company repurchased $ 107 ( 1.7 million shares) under the repurchase program.

In addition to the authorization covering the period from January 1, 2021 to December 31, 2022, in July, 2022, the Board of Directors approved a share repurchase authorization for up to $ 3.0 billion effective from August 1, 2022 to December 31, 2024.

During the nine months ended September 30, 2022 and 2021, the Company repurchased $ 1.2 billion ( 17 million shares) and $ 1.2 billion ( 19 million shares), respectively, of common stock under the $ 3.0 billion share repurchase authorization that is effective until December 31, 2022 as authorized by the Board of Directors.

In addition to this authorization, in July, 2022, the Board of Directors approved a share repurchase authorization for up to $ 3.0 billion effective from August 1, 2022 to December 31, 2024.

As of September 30, 2022, the Company has $ 3.1 billion remaining for equity repurchases under both these share repurchase programs.

During the period October 1, 2022 through October 26, 2022, the Company repurchased $ 98 ( 1.5 million shares) under these repurchase programs.

The timing of any repurchases is dependent on several factors, including the market price of the Company's securities, the Company's capital position, consideration of the effect of any repurchases on the Company's financial strength or credit ratings, the Company's blackout periods, and other considerations .

CHANGES IN AND RECLASSIFICATIONS FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Changes in AOCI, Net of Tax for the Three Months Ended June 30, 2022

Changes in AOCI, Net of Tax for the Three Months Ended September 30, 2022

Net Unrealized Gain (Loss) on Fixed Maturities Unrealized Loss on Fixed Maturities with ACL Net Gain on Cash Flow Hedging Instruments Foreign Currency Translation Adjustments Pension and Other Postretirement Plan Adjustments AOCI,

6 unchanged sentences

Ending balance $ ( 3,038 ) $ ( 7 ) $ 69 $ 14 $ ( 1,452 ) $ ( 4,414 )

Changes in AOCI, Net of Tax for the Six Months Ended June 30, 2022

Note 15 - Accumulated Other Comprehensive Income (Loss)

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in AOCI, Net of Tax for the Nine Months Ended September 30, 2022

6 unchanged sentences

Ending balance $ ( 3,038 ) $ ( 7 ) $ 69 $ 14 $ ( 1,452 ) $ ( 4,414 )

Note 15 - Accumulated Other Comprehensive Income (Loss)

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications from AOCI

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 Affected Line Item in the Condensed Consolidated Statement of Operations

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Affected Line Item in the Condensed Consolidated Statement of Operations

Net Unrealized Gain on Fixed Maturities

17 unchanged sentences

Total amounts reclassified from AOCI $ ( 65 ) $ ( 195 ) Net income

Changes in AOCI, Net of Tax for the Three Months Ended June 30, 2021

Note 15 - Accumulated Other Comprehensive Income (Loss)

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in AOCI, Net of Tax for the Three Months Ended September 30, 2021

Net Unrealized Gain on Fixed Maturities Net Unrealized Loss on Fixed Maturities with ACL Net Gain on Cash Flow Hedging Instruments Foreign Currency Translation Adjustments Pension and Other Postretirement Plan Adjustments AOCI,

6 unchanged sentences

Ending balance $ 1,930 $ ( 2 ) $ 13 $ 42 $ ( 1,676 ) $ 307

Changes in AOCI, Net of Tax for the Six Months Ended June 30, 2021

Changes in AOCI, Net of Tax for the Nine Months Ended September 30, 2021

6 unchanged sentences

Ending balance $ 1,930 $ ( 2 ) $ 13 $ 42 $ ( 1,676 ) $ 307

Note 15 - Accumulated Other Comprehensive Income (Loss)

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications from AOCI

Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Affected Line Item in the Condensed Consolidated Statement of Operations

Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Affected Line Item in the Condensed Consolidated Statement of Operations

Net Unrealized Gain on Fixed Maturities

17 unchanged sentences

Total amounts reclassified from AOCI $ 37 $ 67 Net income

Note 16 - Employee Benefit Plans

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

EMPLOYEE BENEFIT PLANS

1 unchanged sentence

Net periodic cost (benefit) is recognized in insurance operating costs and other expenses in the condensed consolidated statement of operations.

The Company has not determined whether, and to what extent,

contributions may be made to the U.S.

qualified defined benefit pension plan in 2022.

The Company will monitor the funded status of the U.S.

qualified defined benefit pension plan during 2022 to make this determination.

Based on the funded status of the U.S.

qualified defined benefit

pension plan, the Company does not anticipate contributing to the plan in 2022.

Net Periodic Cost (Benefit)

Pension Benefits Other Postretirement Benefits

Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021 2022 2021 2022 2021

13 unchanged sentences

Termination benefits related to workforce reductions and professional fees are included within restructuring and other costs in the Condensed Consolidated Statement of Operations

and unpaid restructuring costs are included in other liabilities in the June 30, 2022 and December 31, 2021 Condensed Consolidated Balance Sheets.

Subsequent to June 30, 2022, the Company expects to incur additional costs including amortization of right of use assets and other lease exit costs, other IT costs to retire applications and other expenses.

and unpaid restructuring costs are included in other liabilities in the September 30, 2022 and December 31, 2021 Condensed Consolidated Balance Sheets.

Subsequent to September 30, 2022, the Company expects to incur additional costs including amortization of right of use assets and other lease exit costs, other IT costs to retire applications and other expenses.

Total restructuring and other costs are expected to be approximately $ 127 , before tax, and will be recognized in Corporate for segment reporting.

1 unchanged sentence

Restructuring and Other Costs, Before Tax

Incurred in the Three Months Ended June 30, Incurred in the Six Months Ended June 30, Cumulative Incurred Through June 30, 2022 Total Amount Expected to be Incurred

Incurred in the Three Months Ended September 30, Incurred in the Nine Months Ended September 30, Cumulative Incurred Through September 30, 2022 Total Amount Expected to be Incurred

2022 2021 2022 2021

4 unchanged sentences

Accrued Restructuring and Other Costs

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Severance Benefits and Related Costs IT Costs Professional Fees and Other Total Restructuring and Other Costs Liability

4 unchanged sentences

Accrued Restructuring and Other Costs

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Severance Benefits and Related Costs IT Costs Professional Fees and Other Total Restructuring and Other Costs Liability

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements