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Item 1. Financial Statements

2023-04-27 compared with 2022-10-27 · 434 added, 487 removed, 1263 unchanged (42% 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 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").

and subsidiaries (the "Company") as of March 31, 2023, the related condensed consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows for the three-month periods ended March 31, 2023 and 2022, 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.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows for the year then ended (not presented herein);

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2022, and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows for the year then ended prior to retrospective adjustment for a change in the Company’s method of accounting for the reserve for future policy benefits (not presented herein);

and in our report dated February 24, 2023, we expressed an unqualified opinion on those consolidated financial statements.

In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

We also audited the adjustments described in Note 1 that were applied to retrospectively adjust the December 31, 2022 consolidated balance sheet of the Company (not presented herein).

In our opinion, such adjustments are appropriate and have been properly applied to the previously issued consolidated balance sheet in deriving the accompanying retrospectively adjusted condensed consolidated balance sheet as of December 31, 2022.

Basis for Review Results

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Hartford, Connecticut

October 27, 2022

April 27, 2023

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Operations

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

Three Months Ended March 31,

(in millions, except for per share data) 2023 2022

2 unchanged sentences

Net investment income 515 509

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

Net realized losses ( 7 ) ( 145 )

Other revenues 20 16

3 unchanged sentences

Amortization of deferred policy acquisition costs ("DAC")

467 419 1,360 1,252

Insurance operating costs and other expenses 1,216 1,210

14 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss)

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

Three Months Ended March 31,

(in millions) 2023 2022

1 unchanged sentence

Other comprehensive income (loss) ("OCI"):

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

Change in net unrealized gain (loss) on fixed maturities, available for sale ("AFS") 586 ( 1,892 )

Change in unrealized losses on fixed maturities for which an allowance for credit losses ("ACL") has been recorded ( 6 ) —

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

Change in net gain (loss) on cash flow hedging instruments 8 ( 1 )

Change in foreign currency translation adjustments 2 —

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

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

Change in liability for future policy benefits adjustments ( 8 ) 43

Change in pension and other postretirement plan adjustments 5 12

Other comprehensive income (loss), net of tax 587 ( 1,838 )

Comprehensive income (loss) $ 1,122 $ ( 1,395 )

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Condensed Consolidated Balance Sheets

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

(in millions, except for share and per share data) March 31,

2023 December 31, 2022

Fixed maturities, available-for-sale ("AFS"), at fair value (amortized cost of $ 39,587 and $ 40,788 , and allowance for credit losses ("ACL") of $ 15 and $ 1 )

Fixed maturities, AFS, at fair value (amortized cost of $ 40,018 and $ 39,533 , and ACL of $ 17 and $ 12 )

$ 37,444 $ 36,231

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Stockholders’ Equity

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

Preferred stock, $ 0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at March 31, 2023 and December 31, 2022, aggregate liquidation preference of $ 345

Common stock, $ 0.01 par value — 1,500,000,000 shares authorized, 344,960,228 shares issued at March 31, 2023 and December 31, 2022

Additional paid-in capital 1,847 1,895

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Condensed Consolidated Statements of Changes in Stockholders' Equity

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

Three Months Ended March 31,

(in millions, except for share and per share data) 2023 2022

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Accumulated Other Comprehensive Income, net of tax, beginning of period ( 3,841 ) 128

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

Total other comprehensive income (loss) 587 ( 1,838 )

Accumulated Other Comprehensive Income (Loss), net of tax, end of period ( 3,254 ) ( 1,710 )

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Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2023 2022

2 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Net realized losses (gains) 649 ( 317 )

Net realized losses 7 145

Amortization of deferred policy acquisition costs 491 437

1 unchanged sentence

Depreciation and amortization 129 171

Loss on extinguishment of debt 9 —

Loss on sale of business — 20

Other operating activities, net 122 31

Change in assets and liabilities:

Increase in reinsurance recoverables ( 132 ) ( 257 )

Decrease (increase) in reinsurance recoverables 29 ( 104 )

Net change in accrued and deferred income taxes 90 41

Increase in insurance liabilities 761 450

Net change in premiums receivable and agents' balances ( 334 ) ( 358 )

Net change in other assets and other liabilities ( 411 ) ( 332 )

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Proceeds from the sale/maturity/prepayment of:

Fixed maturities, available-for-sale 12,418 16,141

Fixed maturities, fair value option 1 —

Fixed maturities, AFS 2,228 6,578

Fixed maturities, FVO — —

Equity securities, at fair value 1,422 257

Mortgage loans 204 438

Partnerships 190 451

Limited partnership and other alternative investments 96 73

Payments for the purchase of:

Fixed maturities, available-for-sale ( 12,480 ) ( 15,898 )

Fixed maturities, fair value option ( 216 ) ( 49 )

Fixed maturities, AFS ( 2,767 ) ( 5,514 )

Fixed maturities, FVO — ( 126 )

Equity securities, at fair value ( 891 ) ( 297 )

Mortgage loans ( 252 ) ( 756 )

Partnerships ( 875 ) ( 830 )

Limited partnership and other alternative investments ( 273 ) ( 317 )

Net proceeds from derivatives 23 26

Net additions of property and equipment ( 49 ) ( 31 )

Net proceeds from (payments for) short-term investments 970 ( 329 )

Net payments for short-term investments ( 180 ) ( 207 )

Other investing activities, net ( 7 ) 2

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

Net cash provided by (used for) investing activities ( 446 ) 126

Financing Activities

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Withdrawals and other deductions from investment and universal life-type contracts ( 42 ) ( 33 )

Repayment of debt ( 600 ) —

Proceeds from the issuance of debt — 588

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

Net return of shares under incentive and stock compensation plans ( 32 ) ( 43 )

Treasury stock acquired ( 350 ) ( 400 )

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Foreign exchange rate effect on cash ( 6 ) —

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

Net decrease in cash and restricted cash ( 126 ) ( 31 )

Cash and restricted cash – beginning of period 344 337

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Supplemental Disclosure of Cash Flow Information

Income tax paid $ 454 $ 439

Income tax paid (received) $ — $ 1

Interest paid $ 61 $ 67

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

On December 29, 2021, the Company completed the sale of Navigators Holdings (Europe) N.V., a Belgium holding company, and its subsidiaries, Bracht, Deckers & Mackelbert N.V.

and Assurances Contintales Contintale Verzekeringen N.V., collectively referred to as "Continental Europe Operations."

The Condens ed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

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

The Company's significant accounting policies are summarized in Note 1 - Basis of Presentation and Significant Accounting

Policies of Notes to Consolidated Financial Statements included in the Company's 2021 Form 10-K Annual Report.

The Company's significant accounting policies are summarized in Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in the Company's 2022 Form 10-K Annual Report.

Consolidation

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GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

results could differ from those estimates.

The most significant estimates include those used in determining property and casualty and group long-term disability insurance product reserves, net of reinsurance;

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Reclassifications

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

Note 2 - Earnings Per Common Share

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

Adoption of New Accounting Standards

Reserve for Future Policy Benefits

On January 1, 2023, the Company adopted the Financial Accounting Standard Board's ("FASB") updated guidance on accounting for long duration insurance contracts, which was applied on a modified retrospective basis as of January 1, 2021.

The new guidance requires the discount rate assumption to be updated, as of the transition date and quarterly going forward, to a current upper-medium grade fixed-income investment yield, which has been interpreted to represent a yield based on single-A credit rated fixed maturity instruments with similar duration to the liability.

The new guidance also eliminated the requirement to adjust the reserve for future policy benefits for unrealized gains and losses on fixed maturity investments as if those unrealized gains and losses were realized (referred to as shadow reserves).

The change in the reserve estimate resulting from updating the discount rate assumptions and eliminating shadow reserves was recognized as a net cumulative effect adjustment that increased the reserve for future policy benefits by $ 85 and decreased AOCI by $ 65 , net of deferred tax effects.

The new guidance also requires that underlying cash flow assumptions (i.e., mortality, lapse and expense) in the reserve for future policy benefits be based on best estimate assumptions.

The adjustments to the reserve for future policy benefits at adoption resulted in establishing a deferred profit liability ("DPL") on limited pay contracts of $ 18 representing the estimated profits based on best estimate cash flow assumptions.

The effect of adopting this guidance on the Company’s reserve for future policy benefits was as follows:

Note 1 - Basis of Presentation and Significant Accounting Policies

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Impact of Adoption on Reserve for Future Policy Benefits

Payout Annuities Life Conversions Paid-up Life DPL Other Total

Reserve for Future Policy Benefits as of December 31, 2020 $ 189 $ 94 $ 267 $ — $ 88 $ 638

Removal of shadow reserve [1] ( 26 ) — — — — ( 26 )

Update cash flow assumptions and establish DPL ( 16 ) — ( 2 ) 18 — —

Effect of measurement at current single-A rate [1] 59 21 29 — 2 111

Total Adjustments 17 21 27 18 2 85

Reserve for Future Policy Benefits as of January 1, 2021 206 115 294 18 90 723

Change in reserves due to changes in the single-A rate ( 11 ) ( 7 ) ( 15 ) — — ( 33 )

Other changes in reserves ( 7 ) ( 14 ) ( 17 ) 2 ( 8 ) ( 44 )

Reserve for Future Policy Benefits as of December 31, 2021 $ 188 $ 94 $ 262 $ 20 $ 82 $ 646

[1] These changes were reflected as an adjustment to opening AOCI as of January 1, 2021, with a corresponding deferred tax benefit and increase in reinsurance recoverables of $ 18 and $ 2 , respectively, resulting in a net decrease to AOCI of $ 65 .

The effect of adopting this guidance on the Company’s Condensed Consolidated Balance Sheets as of January 1, 2021 as well as December 31, 2022 and 2021 and Condensed

Consolidated Statements of Operations for the three months ended March 31, 2022 was as follows:

Impact of Adoption on Condensed Consolidated Balance Sheets

As of December 31, 2022 As of December 31, 2021 As of January 1, 2021

As previously reported Effect of change As currently reported As previously reported Effect of change As currently reported Balance prior to adoption Effect of change As currently reported

Reinsurance recoverables $ 6,966 $ ( 2 ) $ 6,964 $ 6,523 $ 1 $ 6,524 $ 6,011 $ 2 $ 6,013

Deferred income taxes, net $ 1,449 $ ( 12 ) $ 1,437 $ 270 $ 11 $ 281 $ 46 $ 18 $ 64

Reserve for future policy benefits $ 561 $ ( 59 ) $ 502 $ 596 $ 50 $ 646 $ 638 $ 85 $ 723

Retained earnings $ 17,048 $ 10 $ 17,058 $ 15,764 $ 6 $ 15,770 $ 13,918 $ — $ 13,918

AOCI $ ( 3,876 ) $ 35 $ ( 3,841 ) $ 172 $ ( 44 ) $ 128 $ 1,170 $ ( 65 ) $ 1,105

Total stockholders' equity $ 13,631 $ 45 $ 13,676 $ 17,843 $ ( 38 ) $ 17,805 $ 18,556 $ ( 65 ) $ 18,491

Impact of Adoption on Condensed Consolidated Statement of Operations

Three months ended March 31, 2022

As previously reported Effect of change As currently reported

Benefits, losses and loss adjustment expenses $ 3,118 $ 2 $ 3,120

Income before income taxes $ 543 $ ( 2 ) $ 541

Income tax expense $ 98 $ — $ 98

Net income $ 445 $ ( 2 ) $ 443

Net income available to common stockholders $ 440 $ ( 2 ) $ 438

Net income available to common stockholders per common share

Basic $ 1.32 $ — $ 1.32

Diluted $ 1.30 $ — $ 1.30

Note 1 - Basis of Presentation and Significant Accounting Policies

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

SIGNIFICANT ACCOUNTING POLICIES

Reserve for Future Policy Benefits

The Company’s reserves for future policy benefits includes paid-up life insurance and whole-life policies resulting from conversion from group life policies included within the Group Benefits segment and reserves for run-off structured settlement and terminal funding agreement liabilities, which are reported in the Corporate category.

Contracts are grouped into cohorts by contract type and issue year.

The Company establishes reserves for future policy benefits using the net premium approach, which represents the present value of future policyholder benefits and related expenses less the present value of future net premiums.

Net premiums are calculated by multiplying gross premiums for the contracts in a specific cohort by a net premium ratio.

The net premium ratio is determined for the lifetime of a given cohort as the present value of net benefits divided by the present value of gross premiums.

Related expenses include termination and settlement costs and exclude acquisition costs and non-claim related costs, such as costs relating to investments, general administration, policy maintenance, product development, market research and general overhead or any other costs, which are expensed as incurred.

The Company estimates premiums, benefits and related expense cash flows using methods that include assumptions, such as estimates of mortality, lapse, and claim-related expenses, and the possible impact of inflation on those expenses.

Benefits include all guaranteed cash flows to be paid to the policyholder.

The reserve for future policy benefits is adjusted for differences between actual and expected experience.

Each quarter, the Company updates its estimates of cash flows expected over the life of a group of contracts using actual historical experience.

These updated cash flows are used to calculate the revised net premiums and net premium ratio, which are used to derive an updated reserve for future policy benefits.

In subsequent periods, the revised net premiums are used to measure the reserve for future policy benefits, subject to future revisions.

Future cash flow assumptions, including mortality, lapse and expense are reviewed and, if a change is indicated, updated at least annually in the third quarter.

The difference between the newly calculated reserve balance and the reserve balance before updating for actual experience and/or future cash flow assumptions is the remeasurement gain or loss, which is immaterial for the three months ended March 31, 2023 and 2022, and is presented in benefits losses and loss adjustments expense in the Condensed Consolidated Statements of Operations.

Changes to the reserve due to updates to cash flow assumptions discounted at the discount rate used immediately prior to transition are recognized on a catch-up basis in the Condensed Consolidated Statement of Operations.

The discount rate assumption is an equivalent single rate that is based on a current market observable, upper-medium grade fixed maturity yield.

This has been interpreted to represent a yield based on single-A credit rated fixed maturity instruments with similar duration to the liability.

The Company uses the yield of a market observable index of single-A credit rated fixed maturities as the basis for setting the discount rate.

The discount rate assumption is updated quarterly and the change in the reserve estimate resulting from updating the discount rate assumption is recognized in other comprehensive income.

EARNINGS PER COMMON SHARE

Computation of Basic and Diluted Earnings per Common Share

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

Three Months Ended March 31,

(In millions, except for per share data) 2023 2022

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Diluted $ 1.66 $ 1.30

Note 3 - Segment Information

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

SEGMENT INFORMATION

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Net Income (Loss)

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

2022 2021 2022 2021

Three Months Ended March 31,

Commercial Lines $ 421 $ 383

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

2022 2021 2022 2021

Three Months Ended March 31,

Earned premiums and fee income:

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Liability 486 424

Marine 60 57 175 172

Package business 484 435

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Professional liability 188 178

Bond 77 72 226 212

Assumed reinsurance 138 100

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Group life 643 597

Other 88 79 265 235

Total Group Benefits 1,609 1,490

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Net investment income 515 509

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

Net realized (losses) ( 7 ) ( 145 )

Other revenues 20 16

1 unchanged sentence

$ 5,910 $ 5,393

[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.

[1] For the three months ended March 31, 2023 and 2022, AARP members accounted for earned premiums of $ 689 and $ 667 , respectively.

[2] Represents revenues earned for investment advisory services on third-party life and annuity separate account assets under management ("AUM") by the Company's Hartford Funds segment.

Note 3 - Segment Information

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue from Non-Insurance Contracts with Customers

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

Non-Insurance Revenue from Contracts with Customers

Three Months Ended March 31,

Revenue Line Item 2023 2022

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Investment management and other fees Fee income 9 13

Other Other revenues — — 1 1

Total non-insurance revenues with customers $ 338 $ 379

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of March 31, 2023

Total Quoted Prices in

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Treasuries 2,060 1 2,059 —

Total fixed maturities 35,717 46 33,582 2,089

Total fixed maturities, AFS 37,444 1 35,325 2,118

Fixed maturities, FVO 326 — 154 172

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Treasuries 2,197 — 2,197 —

Total fixed maturities 42,847 882 39,561 2,404

Total fixed maturities, AFS 36,231 — 34,180 2,051

Fixed maturities, FVO 333 — 155 178

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Foreign exchange derivatives 32 — 32 —

Interest rate derivatives ( 1 ) — ( 1 ) —

Total derivative assets [1] 34 — 34 —

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[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 $ 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.

The Company has overseas deposits included in other investments of $ 66 and $ 62 as of March 31, 2023 and December 31, 2022, 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.

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 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:

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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

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

Note 4 - Fair Value Measurements

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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.

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• Cross currency basis curves

• Independent broker quotes

• Not applicable

Interest rate derivatives

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Input on Fair Value [2]

As of September 30, 2022

As of March 31, 2023

CLO [3] $ 111 Discounted cash flows Spread 326 bps 326 bps 326 bps Decrease

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Loss severity [6] 10 % 100 % 40 % Decrease

Short Term [3] $ 154 Discounted cash flows Spread 243 bps 587 bps 251 bps Decrease

As of December 31, 2022

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[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 September 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 March 31, 2023 and December 31, 2022, 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.

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

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

As of March 31, 2023, 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

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

Three Months Ended September 30, 2022

Total realized/unrealized gains (losses)

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

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

CMBS 224 — ( 1 ) 4 ( 7 ) — — — 220

Corporate 1,609 ( 1 ) ( 52 ) 75 ( 13 ) ( 9 ) 24 ( 31 ) 1,602

Foreign Govt./Govt.

Agencies 5 1 — — — ( 2 ) — — 4

RMBS 130 — ( 3 ) — ( 19 ) — — — 108

Total fixed maturities, AFS 2,132 — ( 56 ) 110 ( 52 ) ( 11 ) 24 ( 58 ) 2,089

Fixed maturities, FVO 193 ( 4 ) — — ( 3 ) — — — 186

Equity securities, at fair value 60 1 — — — — — — 61

Short-term investments 60 — — 36 ( 3 ) — — — 93

Total Assets $ 2,445 $ ( 3 ) $ ( 56 ) $ 146 $ ( 58 ) $ ( 11 ) $ 24 $ ( 58 ) $ 2,429

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

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

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 September 30, 2022

Fair value as of January 1, 2023 Included in net income [1] Included in OCI [2] Purchases Settlements Sales Transfers into Level 3 [3] Transfers out of Level 3 [3] Fair value as of March 31, 2023

Fixed Maturities, AFS

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Corporate 1,589 1 31 66 ( 51 ) ( 7 ) 27 ( 13 ) 1,643

Foreign Govt./Govt.

Agencies 5 — ( 1 ) — — ( 3 ) 3 — 4

RMBS 95 — — — ( 8 ) — — ( 30 ) 57

4 unchanged sentences

Total Assets $ 2,483 $ ( 8 ) $ 26 $ 148 $ ( 69 ) $ ( 7 ) $ 37 $ ( 73 ) $ 2,537

Note 4 - Fair Value Measurements

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended September 30, 2021

Three Months Ended March 31, 2022

Total realized/unrealized gains (losses)

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

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 March 31, 2022

Fixed Maturities, AFS

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Total Fixed Maturities, AFS 2,404 ( 2 ) ( 71 ) 315 ( 122 ) ( 8 ) — ( 227 ) 2,289

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

Fixed maturities, FVO 160 2 — 20 ( 8 ) — — — 174

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

Total Assets $ 2,010 $ 4 $ ( 8 ) $ 471 $ ( 120 ) $ ( 1 ) $ — $ ( 182 ) $ 2,174

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

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 September 30, 2021

Fixed Maturities, AFS

ABS $ — $ — $ — $ 42 $ — $ — $ — $ ( 19 ) $ 23

CLO 360 — — 391 ( 79 ) — — ( 318 ) 354

CMBS 77 — 2 68 ( 3 ) — 5 ( 48 ) 101

Corporate 881 6 ( 18 ) 405 ( 105 ) ( 45 ) 172 ( 42 ) 1,254

Foreign Govt./Govt.

Agencies 6 — — 5 — ( 6 ) — — 5

RMBS 381 — ( 3 ) 221 ( 148 ) ( 14 ) — ( 169 ) 268

Total Fixed Maturities, AFS 1,705 6 ( 19 ) 1,132 ( 335 ) ( 65 ) 177 ( 596 ) 2,005

Equity Securities, at fair value 64 7 — — ( 14 ) — — — 57

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

Short-term investments 80 — — 4 ( 2 ) — — ( 50 ) 32

9 unchanged sentences

Level 3 Still Held at End of Period

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

Three Months Ended March 31,

2023 2022 2023 2022

Changes in Unrealized Gain/(Loss) included in Net Income [1] [2] Changes in Unrealized Gain/(Loss) included in OCI [3] Changes in Unrealized Gain/(Loss) included in Net Income [1] [2] Changes in Unrealized Gain/(Loss) included in OCI [3]

Changes in Unrealized Gains (Losses) included in Net Income [1] [2] Changes in Unrealized Gains (Losses) included in OCI [3]

Fixed Maturities, AFS

2 unchanged sentences

Corporate — ( 2 ) 31 ( 59 )

Foreign Govt./Govt.

Agencies 1 — — — — — ( 1 ) —

RMBS — — — ( 6 )

1 unchanged sentence

Fixed maturities, FVO ( 8 ) 2 — —

Equity Securities, at fair value 1 1 — — 2 4 — —

Total Assets $ ( 8 ) $ — $ 26 $ ( 71 )

[1] All amounts in these rows are reported in net gains (losses).

[1] All amounts in these rows are reported in net realized gains (losses).

All amounts are before income taxes.

[2] Amounts presented are for Level 3 only and therefore may not agree to other disclosures included herein.

[3] Changes in unrealized gain (loss) on fixed maturities, AFS are reported in changes in net unrealized gain on securities in the Condensed Consolidated Statements of Comprehensive Income.

[3] Changes in unrealized gains (losses) on fixed maturities, AFS are reported in changes in net unrealized gain (loss) on fixed maturities in the Condensed Consolidated Statements of Comprehensive Income.

Fair Value Option

1 unchanged sentence

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 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 .

As of March 31, 2023 and December 31, 2022, the fair value of assets using the fair value option was $ 326 and $ 333 , respectively, of which $ 172 and $ 178 , respectively, were residual interests of securitizations.

For the three months ended March 31, 2023 and 2022, realized losses related to the change in fair value of assets using the fair value option were $ 8 and $ 2 , respectively.

Financial Instruments Not Carried at Fair Value

Financial Assets and Liabilities Not Carried at Fair Value

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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 $ 403 Level 2 $ 499 $ 419

[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.

[1] As of both March 31, 2023 and December 31, 2022, the carrying amount of mortgage loans is net of ACL of $ 36 .

[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 September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Before tax) 2023 2022

Gross gains on sales of fixed maturities

$ 16 $ 63 $ 54 $ 162

Gross losses on sales of fixed maturities

9 unchanged sentences

Net realized gains (losses) $ ( 7 ) $ ( 145 )

[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.

[1] The change in net unrealized gains (losses) on equity securities still held as of March 31, 2023, and included in net realized gains (losses) were $ 2 and $( 131 ) for the three months ended March 31, 2023, and 2022, respectively.

[2] For the three months ended March 31, 2023 and 2022 includes gains (losses) from transactional foreign currency revaluation of $( 7 ) and $ 6 , respectively, and gains (losses) on non-qualifying derivatives of $ 5 and $ 47 , respectively.

Proceeds from the sales of fixed maturities, AFS totaled $ 1.4 billion and $ 5.5 billion for the three months ended March 31, 2023, and 2022 respectively.

Accrued Interest Receivable on Fixed Maturities, AFS and Mortgage Loans

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.

As of March 31, 2023 and December 31, 2022, the Company reported accrued interest receivable related to fixed maturities, AFS of $ 345 and $ 338 , respectively, and accrued interest receivable related to mortgage loans of $ 19 and $ 18 , 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

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

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 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 (" LTV") ratios, average cumulative collateral loss rates that vary by vintage year, prepayment speeds, and property value declines.

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 (" 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 September 30,

(Before tax) Corporate Foreign govt./govt.

agencies CMBS Total Corporate Total

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 ) — —

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

Nine Months Ended September 30,

(Before tax) Corporate Foreign govt./govt.

agencies CMBS Total Corporate Total

Three Months Ended March 31,

(Before tax) Corporate CMBS Total Corporate Foreign govt./govt.

agencies CMBS Total

Balance as of beginning of period $ 2 $ 10 $ 12 $ 1 $ — $ — $ 1

Credit losses on fixed maturities where an allowance was not previously recorded 4 — 4 8 3 1 12

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 — — — —

Balance as of end of period $ 6 $ 11 $ 17 $ 9 $ 3 $ 1 $ 13

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fixed Maturities, AFS

Fixed Maturities, AFS, by Type

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Cost ACL Gross

11 unchanged sentences

Fixed Maturities, AFS, by Contractual Maturity Year

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Amortized Cost Fair Value Amortized Cost Fair Value

6 unchanged sentences

Total fixed maturities, AFS $ 40,018 $ 37,444 $ 39,533 $ 36,231

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Estimated maturities may differ from contractual maturities due to call or prepayment provisions.

3 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 September 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 March 31, 2023 or December 31, 2022 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 September 30, 2022

Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of March 31, 2023

Less Than 12 Months 12 Months or More Total

23 unchanged sentences

Total fixed maturities, AFS in an unrealized loss position $ 25,227 $ ( 2,320 ) $ 7,090 $ ( 1,122 ) $ 32,317 $ ( 3,442 )

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.

As of March 31, 2023, fixed maturities, AFS in an unrealized loss position consisted of 4,565 instruments, and were primarily depressed due to higher interest rates and/or wider credit spreads since the purchase date.

As of March 31, 2023, 94 % of these fixed maturities were depressed less than 20% of cost or amortized cost.

The decrease in unrealized losses during the three months ended March 31, 2023, was primarily attributable to lower interest rates, partially offset by wider credit spreads.

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

The Company neither has an intention to sell nor does it expect to be required to sell the fixed maturities outlined in the preceding discussion.

19 unchanged sentences

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 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.

Estimates of collectibility from an individual borrower require the use of significant management judgment and include the probability and timing of

borrower default and loss severity estimates.

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

As of March 31, 2023, 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 March 31, 2023 or December 31, 2022.

For the three months ended March 31, 2023 and 2022, 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 September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

ACL as of beginning of period $ 36 $ 29

Current period provision (release) — 2

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 %.

ACL as of March 31, $ 36 $ 31

For the three months ended March 31, 2023, there was no change to the ACL on mortgage loans which currently incorporates a level of economic uncertainty and the potential impact it might have on real estate property valuations.

The weighted-average LTV ratio of the Company’s mortgage loan portfolio was 52 % as of March 31, 2023, 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.

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

Mortgage Loans LTV & DSCR by Origination Year as of March 31, 2023

2023 2022 2021 2020 2019 2018 & Prior Total

6 unchanged sentences

DSCR Amortized Cost [1]

Greater than 80% $ — — x $ — — x $ — — x $ — — x $ — — x $ 10 1.92 x $ 10 1.92 x

65% - 80% — — x 16 2.02 x 58 1.84 x 43 2.87 x 100 2.05 x 197 1.34 x 414 1.76 x

8 unchanged sentences

2022 2021 2020 2019 2018 2017 & Prior Total

Loan-to-value Amortized Cost

Amortized Cost Avg.

Loan-to-value Amortized Cost Avg.

DSCR Amortized Cost Avg.

2 unchanged sentences

DSCR Amortized Cost Avg.

DSCR Amortized Cost [1]

DSCR Amortized Cost Avg.

DSCR Amortized Cost [1] Avg.

Greater than 80% $ — — x $ — — x $ — — x $ — — x $ — — x $ 23 1.40 x $ 23 1.40 x

65% - 80% 16 2.02 x 59 2.61 x 43 2.78 x 100 1.95 x 108 1.11 x 117 1.91 x 443 1.91 x

4 unchanged sentences

Mortgage Loans by Region

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Amortized Cost Percent of Total Amortized Cost Percent of Total

13 unchanged sentences

Mortgage Loans by Property Type

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Amortized Cost Percent of Total Amortized Cost Percent of Total

3 unchanged sentences

Retail [1] 945 15.5 % 947 15.7 %

Single Family — — % 30 0.5 %

Other — — % 40 0.7 %

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

As of March 31, 2023 and December 31, 2022, 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 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 March 31, 2023, under this program, the Company serviced mortgage loans with a total outstanding principal of $ 9.5 billion, of which $ 4.5 billion was serviced on behalf of third parties and $ 5.0 billion was retained and reported in total investments on the Company's Condensed Consolidated Balance Sheets.

As of December 31, 2022, the Company serviced mortgage loans with a total outstanding principal balance 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.

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.

Servicing rights are carried at the lower of cost or fair value and were $ 0 as of March 31, 2023 and December 31, 2022, because servicing fees were market-level fees at origination and remain adequate to compensate the

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

As of March 31, 2023 and December 31, 2022, 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 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.

The Company’s maximum exposure to loss as of March 31, 2023 and December 31, 2022 was limited to the total carrying value of $ 2.6 billion for both periods, 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 March 31, 2023 and December 31, 2022, the Company has outstanding commitments totaling $ 1.8 billion for both periods, 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.

2 unchanged sentences

These investments are included in ABS, CLO, CMBS, and RMBS and are reported in fixed maturities, AFS, and fixed maturities, FVO, on the Company's Condensed Consolidated Balance Sheets.

The Company has not provided financial or other support with respect to these investments other than its original investment.

The Company has not provided

financial or other support with respect to these investments other than its original investment.

For these investments, the Company determined it is not the primary beneficiary due to the relative size of the Company’s investment in comparison to the principal amount of the structured securities issued by the VIEs, the Company’s inability to direct the activities that most significantly impact the economic performance of the VIEs, and, where applicable, the level of credit subordination which reduces the Company’s obligation to absorb losses or right to receive benefits.

2 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 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.

As of March 31, 2023 and December 31, 2022, the Company reported $ 34 and $ 41 , 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 September 30, 2022 and December 31, 2021, the Company pledged collateral of $ 7 and $ 9 , respectively, of U.S.

As of March 31, 2023 and December 31, 2022, the Company pledged collateral of $ 7 and $ 7 , respectively, of U.S.

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

6 unchanged sentences

The Company accepts risks as the sole member of Lloyd's Syndicate 1221 ("Lloyd's Syndicate").

Note 5 - Investments

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Fair Value Fair Value

5 unchanged sentences

Total Other Restricted Investments $ 3,374 $ 3,138

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.

12 unchanged sentences

dollars in order to reduce cash flow fluctuations due to changes in currency rates.

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

The Company also previously entered into forward starting swap agreements to hedge the interest rate exposure related to the future purchase of fixed-rate securities, primarily to hedge

interest rate risk inherent in the assumptions used to price certain group benefits liabilities.

Non-qualifying Strategies

10 unchanged sentences

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

As of September 30, 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 March 31, 2023 and December 31, 2022, the notional amount of interest rate swaps in offsetting relationships was $ 6.6 billion for both periods.

Foreign Currency Swaps and Forwards

2 unchanged sentences

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.

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 .

DERIVATIVE BALANCE SHEET CLASSIFICATION

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

The following fair value amounts do not

The Company has also previously entered into

Note 6 - Derivatives

1 unchanged sentence

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.

covered call options on equity securities to generate additional return.

Commodity Options

The Company previously purchased 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.

Derivative Balance Sheet Classification

For reporting purposes, the Company has elected to offset within assets or liabilities based upon the net of the fair value amounts, income accruals and related cash collateral

receivables and payables of OTC derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset.

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

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

The notional amount of derivative contracts represents the basis

upon which 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 Sep 30, 2022 Dec.

31, 2021 Sep 30, 2022 Dec.

Hedge Designation/ Derivative Type Mar 31, 2023 Dec.

31, 2022 Mar 31, 2023 Dec.

Cash flow hedges

29 unchanged sentences

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 September 30, 2022

As of March 31, 2023

Other investments $ 60 $ 55 $ 50 $ ( 45 ) $ — $ 5

11 unchanged sentences

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

Gain (Loss) Recognized in OCI

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

2022 2021 2022 2021

Gains (Losses) Recognized in OCI

Three Months Ended March 31,

Interest rate swaps $ 11 $ ( 2 )

1 unchanged sentence

Total $ 7 $ 7

Gain (Loss) Reclassified from AOCI into Income

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

2022 2021 2022 2021

Net Investment Income Interest Expense Net Investment Income Interest Expense Net Investment Income Interest Expense Net Investment Income Interest Expense

Gains (Losses) Reclassified from AOCI into Income

Three Months Ended March 31,

Net Investment Income Interest Expense Net Investment Income Interest Expense

Interest rate swaps $ ( 8 ) $ 3 $ 9 $ ( 3 )

2 unchanged sentences

Total amounts presented on the Condensed Consolidated Statement of Operations $ 515 $ 50 $ 509 $ 62

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 .

As of March 31, 2023, 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 $ 12 .

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.

1 unchanged sentence

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.

During the three months ended March 31, 2023 and 2022, 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

5 unchanged sentences

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

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

2022 2021 2022 2021

Three Months Ended March 31,

Foreign exchange contracts

4 unchanged sentences

Credit derivatives that purchase credit protection ( 16 ) —

Credit derivatives that assume credit risk — — — 6

Equity contracts

Equity options ( 2 ) — ( 2 ) —

Commodity contracts

4 unchanged sentences

Credit Risk Assumed through Credit Derivatives

The Company primarily enters into credit default swaps that assume credit risk of a referenced market index in order to synthetically replicate investment transactions that are permissible under the Company's investment policies.

The Company enters into credit default swaps that assume credit risk of a single entity or referenced index in order to synthetically replicate investment transactions that are permissible under the Company's investment policies.

The Company will receive periodic payments based on an agreed upon rate and notional amount and will only make a payment if there is a credit event.

9 unchanged sentences

Obligation(s) [1]

As of September 30, 2022

As of March 31, 2023

Basket credit default swaps [4]

Investment grade risk exposure $ 100 $ ( 2 ) 5 years CMBS Credit AAA $ 100 $ 2

Below investment grade risk exposure 4 ( 2 ) Less than 1 year CMBS Credit B 4 2

Below investment grade risk exposure 3 ( 2 ) Less than 1 year CMBS Credit CCC+ 3 2

Total [5] $ 103 $ ( 4 ) $ 103 $ 4

2 unchanged sentences

Investment grade risk exposure $ 100 $ ( 1 ) 6 years CMBS Credit AAA $ 100 $ 1

Below investment grade risk exposure 4 ( 2 ) Less than 1 year CMBS Credit CCC 4 2

Below investment grade risk exposure 3 ( 2 ) Less than 1 year CMBS Credit B- 3 2

Total [5] $ 103 $ ( 3 ) $ 103 $ 3

8 unchanged sentences

[5] Excludes investments that contain an embedded credit derivative for which the Company has elected the fair value option.

For further discussion, see the Fair Value Option section in Note 4 - Fair Value Measurements of Notes to Consolidated Financial Statements.

For further discussion, see the Fair Value Option section in Note 4 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.

Derivative Collateral Arrangements

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

As of 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 .

As of March 31, 2023 and December 31, 2022, the Company ha s pl edged cash collateral associated with derivative instruments of $ 22 and less than $ 1 , 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 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.

As of March 31, 2023 and December 31, 2022, the Company pledged securities collateral associated with derivative instruments with a fair value of $ 8 for both periods, 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 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 .

In addition, as of March 31, 2023 and December 31, 2022, the Company has pledged initial margin of cash related to OTC-cleared and exchange traded derivatives with a fair value of $ 16 for both periods, which is recorded in other investments or other assets on the Company's Condensed Consolidated Balance Sheets.

As of March 31, 2023 and December 31, 2022, the Company has pledged initial margin of securities related to OTC-cleared and exchange traded derivatives with a fair value of $ 90 and $ 57 , respectively, which are included within fixed maturities on the Company's Condensed Consolidated Balance Sheets.

As of March 31, 2023 and December 31, 2022, the Company

accepted cash collateral associated with derivative instruments of $ 49 and $ 56 , respectively, which was invested and recorded in the Company's Condensed Consolidated Balance Sheets in fixed maturities and short-term investments with corresponding amounts recorded in other investments or other liabilities as determined by the Company's election to offset on the balance sheet.

The Company also accepted securities collateral as of March 31, 2023 and December 31, 2022, with a fair value of $ 1 for both periods, which the Company has the right to repledge or sell.

As of March 31, 2023 and December 31, 2022, the Company had no repledged securities.

In addition, as of March 31, 2023 and December 31, 2022, 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 September 30, 2022 As of December 31, 2021

As of March 31, 2023 As of December 31, 2022

Premiums receivable, excluding receivables for losses within a deductible and retrospectively-rated policy premiums ("loss sensitive business") $ 5,013 $ 4,698

10 unchanged sentences

For these balances, the ACL is estimated based on an aging of receivables and recent historical credit loss and collection experience, adjusted for current economic conditions and reasonable and supportable forecasts, when appropriate.

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

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.

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 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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

Beginning ACL $ 84 $ 23 $ 107 $ 97 $ 37 $ 134

Current period provision (release) 12 1 13 1 — 1

Current period write-offs ( 13 ) ( 1 ) ( 14 ) ( 13 ) — ( 13 )

Current period recoveries 2 — 2 2 — 2

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

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

September 30, 2022 September 30, 2021

March 31, 2023 March 31, 2022

5 unchanged sentences

$ 86 $ 25 $ 111 $ 84 $ 22 $ 106

Note 8 - Reinsurance

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company cedes insurance risk to reinsurers to enable the Company to manage capital and risk exposure.

9 unchanged sentences

Accordingly, the Company’s estimate of reinsurance recoverables is subject to similar risks and uncertainties as the estimate of the gross reserve for unpaid losses and loss adjustment expenses.

Note 8 - Reinsurance

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Reinsurance Recoverables by Credit Quality Indicator

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

As of March 31, 2023 As of December 31, 2022

Property and Casualty

31 unchanged sentences

Credit ratings are reviewed on a quarterly basis and any significant changes are reflected in an updated estimate.

The probability of default

factors are historical insurer and reinsurer defaults for liabilities with similar durations to the reinsured liabilities as estimated through multiple economic cycles.

The probability of default factors are historical insurer and reinsurer defaults for liabilities with similar durations to the reinsured liabilities as estimated

Note 8 - Reinsurance

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

through multiple economic cycles.

Credit ratings are forward-looking and consider a variety of economic outcomes.

2 unchanged sentences

Reinsurance recoverables due from pools are backed by the financial position of all insurance companies participating in the pools and the credit backing the reinsurance recoverable is not limited to the financial strength of each pool.

The mandatory pools generally are funded through policy assessments or surcharges and if any participant in the pool defaults, remaining liabilities are apportioned among the other members.

The mandatory pools generally are funded through policy assessments or

surcharges and if any participant in the pool defaults, remaining liabilities are apportioned among the other members.

The Company's evaluation of the required ACL for reinsurance recoverables considers the current economic environment as well as macroeconomic scenarios similar to the approach used to estimate the ACL for mortgage loans.

3 unchanged sentences

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

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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Uncollectible Reinsurance for the Three Months Ended

September 30, 2022 September 30, 2021

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

Beginning allowance for uncollectible reinsurance

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

Beginning allowance for disputed amounts 61 — — 61 56 — — 56

Beginning ACL

41 1 2 44 40 1 2 43

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

42 1 2 45 41 1 2 44

Ending allowance for disputed amounts 60 — — 60 55 — — 55

Ending allowance for uncollectible reinsurance

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

Allowance for Uncollectible Reinsurance for the Nine Months Ended

September 30, 2022 September 30, 2021

March 31, 2023 March 31, 2022

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

Note 9 - Reserves for Unpaid Losses and Loss Adjustment Expenses

Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

3 unchanged sentences

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

For the nine months ended September 30,

For the three months ended March 31,

Beginning liabilities for unpaid losses and loss adjustment expenses, gross

7 unchanged sentences

Total provision for unpaid losses and loss adjustment expenses

Change in deferred gain on retroactive reinsurance included in other liabilities [1] — ( 73 )

Current accident year ( 321 ) ( 281 )

8 unchanged sentences

$ 33,398 $ 31,617

[1]Prior accident year development does not include the benefit of a portion of losses ceded under the Navigators and Asbestos and Environmental ("A&E") Adverse Development Cover ("ADC") which, under retroactive reinsurance accounting, is deferred and is recognized over the period the ceded losses are recovered in cash from National Indemnity Company (" NICO "), a subsidiary of Berkshire Hathaway Inc.

For additional information regarding the two adverse development cover reinsurance agreements, refer to Adverse Development Covers discussion below.

Note 9 - Reserves for Unpaid Losses and Loss Adjustment Expenses

Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

1 unchanged sentence

Unfavorable (Favorable) Prior Accident Year Development

For the nine months ended September 30,

For the three months ended March 31,

Workers’ compensation $ ( 61 ) $ ( 45 )

4 unchanged sentences

Professional liability — —

Bond ( 4 ) ( 26 )

Assumed reinsurance 2 12

2 unchanged sentences

Homeowners ( 1 ) —

Net asbestos and environmental reserves — —

Catastrophes — ( 3 )

1 unchanged sentence

Other reserve re-estimates, net 28 10

Prior accident year development before change in deferred gain ( 147 ) 97

Change in deferred gain on retroactive reinsurance included in other liabilities [1] — 73

Total prior accident year development $ — $ ( 36 )

[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 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.

Re-estimates of prior accident year reserves for the three months ended March 31, 2023

Workers’ compensation reserves were decreased within the 2014 to 2019 accident years primarily in small commercial, driven by lower than previously estimated claim severity.

In addition, the 2020 accident year reflects a $ 20 reduction of COVID-19 related reserves.

General liability reserves were increased in middle and large commercial, driven by an increase in the frequency and estimated cost to settle large individual claims for the 2016 to 2021 accident years.

Package business reserves decreased primarily due to lower than previously estimated property severity for accident year 2021.

Package liability is flat overall with improvement in accident year 2020 due to favorable claim count emergence offset by reserve increases in accident years 2019 and prior related to higher severity.

Commercial property reserves were increased due to unfavorable development for accident year 2022 in middle & large commercial.

Automobile liability reserves - Personal Lines were flat as decreases due to lower estimated severity, within accident years 2019 to 2021 were offset by increases in accident year 2022 due to higher estimated severity and increasing attorney representation rates.

Uncollectible reinsurance was increased primarily in Commercial Lines related to a captive reinsurer, and to a lesser extent in P&C Other Operations related to one larger reinsurer entering liquidation proceedings.

Other reserve re-estimates, net, were increased primarily due to an increase in accident year 2022 Personal Lines automobile physical damage severity.

Re-estimates of prior accident year reserves for the three months ended March 31, 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.

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.

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

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.

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.

Automobile liability reserves were decreased in Personal Lines principally due to lower estimated severity on AARP Direct claims, primarily within accident years 2015 to 2020 and were increased in Commercial Lines principally due to a higher number of large claims in accident years 2017 to 2019.

Catastrophe reserves were decreased in both Commercial and Personal Lines with the largest reduction related to 2019 and 2020 wind and hail events.

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 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.

Commercial property reserves were decreased primarily due to favorable development for the 2020 accident year in both middle & large commercial and global specialty.

Professional liability reserves were decreased due to lower estimated severity in both large and middle market directors’ and officers’ (“D&O”) insurance for older accident years.

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.

Note 9 - Reserves for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

Uncollectible reinsurance reserves were decreased due to a higher than expected recovery from one reinsurer on which the Company had recognized an allowance for credit losses.

Other reserve re-estimates, net, were increased primarily due to an increase in reserves for sexual molestation and sexual abuse claims within P&C Other Operations, principally on assumed reinsurance.

Automobile liability reserves were decreased in Personal Lines principally due to lower estimated severity on AARP Direct claims, primarily within accident years 2016 to 2020.

Other reserve re-estimates, net, were increased primarily due to unfavorable development from participation in involuntary market pools.

Settlement Agreement with Boy Scouts of America

On September 14, 2021, the Company announced that it entered into a new agreement-in-principle with the BSA, related to sexual molestation and sexual abuse claims associated with liability policies issued by various Hartford writing companies in the 1970s and early 1980s, with the agreement in-principle including the BSA, its local councils and the representatives of a majority of the sexual abuse claimants.

As part of the agreement-in-principle, The Hartford will pay $ 787 , before tax, for claims associated with policies mostly issued in the 1970s.

On September 14, 2021, the Company announced that it entered into a new agreement-in-principle with the Boy Scouts of America ("BSA"), related to sexual molestation and sexual abuse claims associated with liability policies issued by various Hartford writing companies in the 1970s and early 1980s, with the agreement in-principle including the BSA, its local councils and the representatives of a majority of the sexual abuse claimants.

As part of the agreement-in-principle, The Hartford will pay $ 787 , before tax, for claims associated with these policies.

In exchange for The Hartford’s payment, the BSA and its local councils will fully release The Hartford from any obligation under policies The Hartford issued to the BSA and its local councils.

1 unchanged sentence

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 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

The Company has an adverse development cover reinsurance agreement with NICO, a subsidiary of Berkshire Hathaway Inc., to reinsure loss development after 2016 on substantially all of the Company’s asbestos and environmental reserves (the “A&E ADC”).

Under the A&E ADC, the Company paid a reinsurance premium of $ 650 for NICO to assume adverse net loss reserve development up to $ 1.5 billion above the Company’s existing net A&E reserves as of December 31, 2016 of approximately $ 1.7 billion including reserves for A&E exposure for accident years prior to 1986 that are reported in Property & Casualty Other Operations ("Run-off A&E") and reserves for A&E exposure for accident years 1986 and subsequent from policies underwritten prior to 2016 that are reported in ongoing Commercial Lines and Personal Lines.

The $ 650 reinsurance premium was placed into a collateral trust account as security for NICO’s claim payment obligations to the Company.

The Company has retained the risk of collection on amounts due from other third-party reinsurers and continues to be responsible for claims handling and other administrative services, subject to certain conditions.

The A&E ADC covers substantially all the Company’s A&E reserve development up to the reinsurance limit.

Under retroactive reinsurance accounting, net adverse A&E reserve development after December 31, 2016 results in an offsetting reinsurance recoverable up to the $ 1.5 billion limit.

Cumulative ceded losses up to the $ 650 reinsurance premium paid have been recognized as a dollar-for-dollar offset to direct losses incurred.

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

As of 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 .

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

Consequently, until periods when the deferred gain is recognized as a benefit to earnings, cumulative adverse development of asbestos and environmental claims will result in charges against earnings which may be significant.

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

Under the Navigators ADC, the Navigators Insurers paid NICO a reinsurance premium of $ 91 in exchange for reinsurance coverage of $ 300 of adverse net loss reserve development that attaches $ 100 above the Navigators Insurers' existing net loss and allocated loss adjustment

Note 9 - Reserves for Unpaid Losses and Loss Adjustment Expenses

Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

March 28, 2023, the civil district court affirmed the bankruptcy court’s ruling.

The civil district court’s ruling is now final, all conditions precedent to Settlement have been satisfied and on April 20, 2023, The Hartford paid the Settlement amount of $ 787 .

Certain objecting parties have indicated that they will appeal the civil district court’s ruling.

If the court approvals for the BSA’s plan of reorganization are not affirmed on appeal, it is possible that adverse outcomes, if any, could have a material adverse effect on the Company’s operating results.

| GROUP LIFE, DISABILITY AND ACCIDENT PRODUCTS

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

For the nine months ended September 30,

For the three months ended March 31,

Beginning liabilities for unpaid losses and loss adjustment expenses, gross $ 8,160 $ 8,210

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 $ 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.

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 losses incurred in fourth quarter 2021.

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 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.

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

[2] Includes unallocated loss adjustment expenses ("ULAE") of $ 45 and $ 46 for the three months ended March 31, 2023 and 2022, 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 three months ended March 31, 2023

Group disability- Prior period reserve estimates decreased by approximately $ 120 largely driven by group long-term disability claim incidence lower than prior assumptions and strong recoveries on prior incurral year claims.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $ 8 largely driven by continued low incidence in group life premium waiver.

Supplemental accident and health- Prior period reserve estimates decreased by approximately $ 5 driven by lower than previously expected claim incidence.

Re-estimates of prior incurral years reserves for the three months ended March 31, 2022

Group disability- Prior period reserve estimates decreased by approximately $ 80 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 $ 35 largely driven by a reduction in estimated mortality group term life losses incurred in fourth quarter 2021, as well as continued low incidence in group life premium waiver.

Note 10 - Reserve for Future Policy Benefits

2 unchanged sentences

RESERVE FOR FUTURE POLICY BENEFITS

Changes in Reserves for Future Policy Benefits[1]

For the nine months ended September 30,

Beginning liability balance $ 596 $ 638

Incurred 80 45

Paid ( 91 ) ( 74 )

Change in unrealized investment gains and losses ( 18 ) ( 7 )

Ending liability balance $ 567 $ 602

Ending reinsurance recoverable asset $ 31 $ 22

[1]Reserves for future policy benefits includes paid-up life insurance and whole-life policies resulting from conversion from group life policies included within the Group Benefits segment and reserves for run-off structured settlement and terminal funding agreement liabilities which are in the Corporate category.

Junior Subordinated Debentures

On April 15, 2022, The Hartford redeemed at par $ 600 aggregate principal amount of its 7.875 % junior subordinated debentures due 2042 and recognized, in insurance operating costs and other expenses, a loss on extinguishment of debt of $ 9 , before tax, for unamortized debt issuance costs.

Shelf Registrations

On February 22, 2022, the Company filed with the Securities and Exchange Commission an automatic shelf registration statement (Registration No.

333-262879) for the potential offering and sale of debt and equity securities.

The registration statement allows for the following types of securities to be offered:

debt securities, junior subordinated debt securities, guarantees, preferred stock, common stock, depositary shares, warrants, stock purchase contracts, and stock purchase units.

In that The Hartford is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act of 1933, the registration statement went effective immediately upon filing and The Hartford may offer and sell an unlimited amount of securities under the registration statement during the three -year life of the registration statement.

Rollforward of Reserve for Future Policy Benefits

For the three months ended March 31,

Payout Annuities Life Conversions Paid-up Life Payout Annuities Life Conversions Paid-up Life

Present Value of Expected Net Premiums

Balance, beginning of the period $ 47 $ 58

Balance, ending of the period $ 46 $ 52

Present Value of Expected Future Policy Benefits

Beginning balance at single-A rate $ 140 $ 112 $ 192 $ 188 $ 152 $ 262

Beginning adjustment for changes in single-A rate 4 ( 14 ) ( 39 ) 47 19 14

Beginning balance at original discount rate 136 126 231 141 133 248

Effect of actual variances from expected experience — 2 — 1 1 —

Adjusted beginning balance 136 128 231 142 134 248

Interest accrual 2 4 2 2 4 2

Benefit Payments ( 3 ) ( 7 ) ( 6 ) ( 3 ) ( 7 ) ( 5 )

Ending balance at original discount rate 135 125 227 141 131 245

Ending adjustment for changes in single-A rate 8 ( 12 ) ( 35 ) 28 5 ( 11 )

Ending balance at single-A rate $ 143 $ 113 $ 192 $ 169 $ 136 $ 234

Net reserve for future policy benefits $ 143 $ 67 $ 192 $ 169 $ 84 $ 234

Weighted-average duration of the reserve for future policy benefits (years) 9.1 12.3 6.5 9.2 14.1 7.5

Net Reserve for Future Policy Benefits

As of March 31,

Payout Annuities $ 143 $ 169

Life Conversions 67 84

Paid-up Life 192 234

Total $ 508 $ 592

Undiscounted Expected Future Gross Premiums and Benefit Payments

As of March 31,

Payout Annuities [1]

Expected future benefit payments $ 269 $ 281

Life Conversions

Expected future gross premiums $ 118 $ 126

Expected future benefit payments $ 208 $ 221

Paid-up Life [1]

Expected future benefit payments $ 295 $ 319

[1]Payout Annuities and Paid-up Life have no expected future gross premiums.

Note 10 - Reserve for Future Policy Benefits

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Weighted-Average Interest Rates

For the three months ended March 31,

Payout Annuities

Interest accretion rate 5.6 % 5.6 %

Current discount rate 5.0 % 3.7 %

Life Conversions

Interest accretion rate 4.2 % 4.1 %

Current discount rate 5.1 % 3.8 %

Interest accretion rate 2.9 % 2.9 %

Current discount rate 5.0 % 3.3 %

Gross premiums and interest accretion recognized on long-duration insurance policies for the three months ended March 31, 2023 and 2022 were immaterial.

OTHER POLICYHOLDER FUNDS AND BENEFITS PAYABLE

Other policyholder funds and benefits payable of $ 647 and $ 677 as of March 31, 2023 and 2022 respectively, include universal life long-duration contacts of $ 231 and $ 250 as well as policyholder balances related to short-duration contracts of $ 416 and $ 427 .

The universal life long-duration contacts presented in the table below were economically ceded to Prudential as part of the sale of the Company's former individual life business, which closed in 2013.

Universal Life Long Duration Contracts Rollforward

For the three months ended March 31,

Balance, beginning of year $ 232 $ 253

Premiums Received 3 4

Policy Charges ( 5 ) ( 6 )

Surrenders and Withdrawals ( 1 ) ( 1 )

Benefit Payments ( 1 ) ( 3 )

Interest Credited 3 3

Balance, End of Year $ 231 $ 250

Weighted-average crediting rate 4.2 % 4.2 %

Net Amount at Risk [1] $ 966 $ 1,050

Cash Surrender Value $ 229 $ 247

[1]Net amount at risk is defined as the current death benefit in excess of the current account value as of the balance sheet date.

As of March 31, 2023 and 2022, universal life contracts of $ 229 and $ 248 , respectively, had crediting rates at their guaranteed minimums ranging from 4 %- 5 % .

Note 12 - Income Taxes

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Income Tax Rate Reconciliation

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

2022 2021 2022 2021

Three Months Ended March 31,

Tax provision at U.S.

federal statutory rate $ 137 $ 114

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

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

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

Nontaxable investment income ( 11 ) ( 9 )

Executive compensation 6 7

Stock-based compensation ( 12 ) ( 10 )

Other ( 2 ) ( 4 )

2 unchanged sentences

Rollforward of Unrecognized Tax Benefits

Three Months Ended September 30,

Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

Balance, beginning of period $ 22 $ 16

Gross increases - tax positions in current period 1 1

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

Balance, end of period $ 23 $ 17

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 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 .

As of March 31, 2023, the Company has a deferred tax asset for foreign net operating losses of $ 38 partially offset by a valuation allowance of $ 25 .

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.

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In making the assessment, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryovers, taxable income in open carry back years and other tax planning strategies which management views as prudent and feasible.

The federal income tax audits for the Company have been completed through 2013, and the Company is not currently under federal income tax examination for any open years.

The federal income tax audits for the Company have been completed through 2013.

The acquired Navigators Group is currently under IRS audit for the pre-acquisition 2019 tax period.

The statute of limitations is closed through the 2018 tax year with the exception of NOL carryforwards utilized in open tax years.

6 unchanged sentences

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

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.

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 11 - Reserve for Unpaid Losses and Loss Adjustment Expenses, of the Company's Annual Report on Form 10-K for the year ended December 31, 2022, 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.

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

In addition to the matter described below, these actions include putative class actions seeking certification of a state or national class.

Such putative class actions have alleged, for example, underpayment of claims or improper sales or underwriting practices in connection with various kinds of insurance policies, such as personal and commercial automobile, property, disability, life and inland marine.

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

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

Note 13 - Commitments and Contingencies

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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.

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.

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.

COVID-19 Pandemic Business Income Insurance Litigation

7 unchanged sentences

The Hartford Writing Companies maintain that they have no coverage obligations with respect to these suits for business income allegedly lost by the plaintiffs due to the COVID-19 pandemic based on the clear terms of the applicable insurance policies.

Although the policy terms vary depending, among other things, upon the size, nature, and location of the policyholder’s business, in general, the claims at issue in these lawsuits were denied because the claimant identified no direct physical damage or loss to property at the insured premises, and the governmental orders that led to the complete or partial shutdown of the business were not due to the existence of any direct physical loss or damage in the immediate vicinity of the insured premises and did not prohibit access to the insured premises, as required by the terms of the insurance policies.

Although the policy terms vary depending, among other things, upon the size, nature, and location of the policyholder’s business, in general, the claims at issue in these lawsuits were denied because the claimant identified no direct physical damage or loss to property at the insured premises, and the governmental orders that led to the complete or partial shutdown of the business were not due to the existence of any direct physical damage or loss in the immediate vicinity of the insured premises and did not prohibit access to the insured premises, as required by the terms of the insurance policies.

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

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

lawsuits present numerous uncertainties and contingencies that are not yet 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 additional claims or lawsuits could 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.

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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 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.

underway in certain single plaintiff cases and class actions.

Moreover, dozens of policyholders have appealed dismissals in favor of the Hartford Writing Companies.

The Hartford Writing Companies have received numerous favorable rulings on appeal, with only two adverse appellate rulings to date.

The remainder of the Hartford Writing Companies' appeals are at various stages of the appellate process and have not yet been ruled upon.

In addition, business income calculations depend upon a wide range of factors that are particular to the circumstances of each individual policyholder and, here, almost none of the plaintiffs have submitted proofs of loss or otherwise quantified or factually supported any allegedly covered loss, and, in any event, the Company’s experience shows that demands for damages often bear little relation to a reasonable estimate of potential loss.

2 unchanged sentences

Run-off Asbestos and Environmental Claims

The Company continues to receive A&E claims.

The Company continues to receive asbestos and environmental ("A&E") claims.

Asbestos claims relate primarily to bodily injuries asserted by people who came in contact with asbestos or products containing asbestos.

Environmental claims relate primarily to pollution and related clean-up costs.

The vast majority of the Company's exposure to A&E relates to Run-off A&E, reported within the P&C Other Operations segment.

In addition, since 1986, the Company has written asbestos and environmental exposures under general liability policies and pollution liability under homeowners policies, which are reported in the Commercial Lines and Personal Lines segments.

The vast majority of the Company's exposure to A&E relates to accident years prior to 1986 that are reported in Property & Casualty Other Operations ("Run-off A&E").

Prior to 1986, the Company wrote several different categories of insurance contracts that may cover A&E claims.

3 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

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 from past experience uncertain.

Plaintiffs and insureds also

Note 13 - Commitments and Contingencies

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

In addition, some policyholders have asserted new classes of claims for coverages to which an aggregate limit of liability may not apply.

1 unchanged sentence

Management believes these issues are not likely to be resolved in the near future.

In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liability and damages against insureds, emerging risks such as PFAS, the risks inherent in major litigation, inconsistent and emerging legal doctrines concerning the existence and scope of coverage for environmental claims, and the scope and level of complexity of the remediation required by regulators.

In the case of the reserves for environmental exposures, factors contributing to the high degree of uncertainty include expanding theories of liability and damages against insureds, emerging risks such as per-and polyfluoroalkyl substances ("PFAS"), the risks inherent in major litigation, inconsistent and emerging legal doctrines concerning the existence and scope of coverage for environmental claims, and the scope and level of complexity of the remediation required by regulators.

The reporting pattern for assumed reinsurance claims, including those related to A&E claims, is much longer than for direct claims.

6 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 or liquidity.

For its Run-off A&E, as of September 30, 2022, the Company reported $ 455 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 claims, as of March 31, 2023, the Company reported $ 359 of net asbestos and environmental reserves, including the benefit of losses ceded to an A&E adverse development cover ("ADC") with National Indemnity Company, a subsidiary of Berkshire Hathaway ("NICO") (collectively the "A&E ADC").

In addition, the Company has recorded a $ 594 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.

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 or liquidity.

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

The Company’s A&E ADC reinsurance agreement 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 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.

As of March 31, 2023 , the Company has incurred $ 1,244 in cumulative adverse development on A&E reserves that have been ceded under the A&E ADC treaty, leaving $ 256 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 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 aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of March 31, 2023 was $ 33 for which the legal entities have posted collateral of $ 30 in the normal course of business.

Based on derivative contractual terms as of March 31, 2023, 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 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 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.

During the three months ended March 31, 2023 and 2022, the Company repurchased $ 350 ( 4.7 million shares) and $ 400 ( 5.7 million shares), respectively, of common stock under Board authorized share repurchase programs covering the applicable periods.

As of March 31, 2023, the Company has $ 2.4 billion remaining for equity repurchases under the current $ 3.0 billion share repurchase program, which is effective until December 31, 2024.

During the period April 1, 2023 through April 26, 2023,

the Company repurchased $ 112 ( 1.6 million shares) under this repurchase program.

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 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,

Changes in AOCI, Net of Tax for the Three Months Ended March 31, 2023

Net Unrealized Gain (Loss) on Fixed Maturities, AFS Unrealized Losses on Fixed Maturities with ACL Net Gain (Loss) on Cash Flow Hedging Instruments Foreign Currency Translation Adjustments Liability for Future Policy Benefits Adjustments Pension and Other Postretirement Plan Adjustments AOCI,

Beginning balance $ ( 2,594 ) $ ( 7 ) $ 40 $ 31 $ 35 $ ( 1,346 ) $ ( 3,841 )

8 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Beginning balance $ 1,616 $ ( 2 ) $ 6 $ 41 $ ( 1,489 ) $ 172

OCI before reclassifications ( 6,113 ) ( 6 ) 95 ( 34 ) 1 ( 6,057 )

Amounts reclassified from AOCI 222 — ( 16 ) — 46 252

OCI, before tax ( 5,891 ) ( 6 ) 79 ( 34 ) 47 ( 5,805 )

Income tax benefit (expense) 1,237 1 ( 16 ) 7 ( 10 ) 1,219

OCI, net of tax ( 4,654 ) ( 5 ) 63 ( 27 ) 37 ( 4,586 )

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

Reclassifications from AOCI

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

Three Months Ended March 31, 2023 Affected Line Item in the Condensed Consolidated Statement of Operations

Net Unrealized Gain (Loss) on Fixed Maturities, AFS

Available-for-sale fixed maturities $ ( 27 ) Net realized gains (losses)

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$ ( 21 ) Net income

Net Gains on Cash Flow Hedging Instruments

Net Gain (Loss) on Cash Flow Hedging Instruments

Interest rate swaps $ ( 8 ) Net investment income

11 unchanged sentences

Total amounts reclassified from AOCI $ ( 28 ) Net income

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,

Beginning balance $ 2,204 $ ( 2 ) $ 12 $ 46 $ ( 1,690 ) $ 570

OCI before reclassifications ( 292 ) — 10 ( 5 ) 1 ( 286 )

Amounts reclassified from AOCI ( 55 ) — ( 9 ) — 17 ( 47 )

OCI, before tax ( 347 ) — 1 ( 5 ) 18 ( 333 )

Income tax benefit (expense) 73 — — 1 ( 4 ) 70

OCI, net of tax ( 274 ) — 1 ( 4 ) 14 ( 263 )

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

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

Changes in AOCI, Net of Tax for the Three Months Ended March 31, 2022

Beginning balance $ 1,631 $ ( 2 ) $ 6 $ 41 $ ( 59 ) $ ( 1,489 ) $ 128

5 unchanged sentences

Ending balance $ ( 261 ) $ ( 2 ) $ 5 $ 41 $ ( 16 ) $ ( 1,477 ) $ ( 1,710 )

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 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

Three Months Ended March 31, 2022 Affected Line Item in the Condensed Consolidated Statement of Operations

Net Unrealized Gain (Loss) on Fixed Maturities, AFS

Available-for-sale fixed maturities $ ( 87 ) Net realized gains (losses)

2 unchanged sentences

$ ( 69 ) Net income

Net Gains on Cash Flow Hedging Instruments

Net Gain (Loss) on Cash Flow Hedging Instruments

Interest rate swaps $ 9 Net investment income

11 unchanged sentences

Total amounts reclassified from AOCI $ ( 75 ) Net income

Note 16 - Employee Benefit Plans

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

EMPLOYEE BENEFIT PLANS

The Company’s employee benefit plans are described in Note 19 - Employee Benefit Plans of Notes to Consolidated Financial Statements included in The Hartford’s 2021 Annual Report on Form 10-K.

The Company’s employee benefit plans are described in Note 18 - Employee Benefit Plans of Notes to Consolidated Financial Statements included in The Hartford’s 2022 Form 10-K Annual Report.

Net periodic cost (benefit) is recognized in insurance operating costs and other expenses in the Condensed Consolidated Statement of Operations.

Based on the funded status of the U.S.

qualified defined benefit

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

qualified defined benefit pension plan, the Company does not anticipate contributing to the plan in 2023.

Net Periodic Cost (Benefit)

Pension Benefits Other Postretirement Benefits

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

Three Months Ended March 31, Three Months Ended March 31,

2023 2022 2023 2022

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 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.

and unpaid restructuring costs are included in other liabilities in the March 31, 2023 and December 31, 2022 Condensed Consolidated Balance Sheets.

Subsequent to March 31, 2023, 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 $ 121 , 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 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

Incurred in the Three Months Ended March 31, Cumulative Incurred Through March 31, 2023 Total Amount Expected to be Incurred

Severance benefits $ ( 3 ) $ ( 2 ) $ 38 $ 38

3 unchanged sentences

Accrued Restructuring and Other Costs

Nine Months Ended September 30, 2022

Three Months Ended March 31, 2023

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

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2022

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