What changed in this filing

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Item 1. Financial Statements

2023-10-26 compared with 2023-07-27 · 256 added, 251 removed, 1570 unchanged (24% of the section changed)

6 unchanged sentences

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

and subsidiaries (the "Company") as of June 30, 2023, the related condensed consolidated statements of operations, comprehensive income (loss), and changes in stockholders' equity for the three-month and six-month periods ended June 30, 2023 and 2022, and of cash flows for the six-month periods ended June 30, 2023 and 2022, and the related notes (collectively referred to as the "interim financial information").

and subsidiaries (the "Company") as of September 30, 2023, 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, 2023 and 2022, and of cash flows for the nine-month periods ended September 30, 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.

13 unchanged sentences

Hartford, Connecticut

July 27, 2023

October 26, 2023

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

Condensed Consolidated Statements of Operations

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

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

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

25 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Loss)

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

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

(in millions) 2023 2022 2023 2022

7 unchanged sentences

Change in pension and other postretirement plan adjustments 6 13 16 37

Other comprehensive income (loss), net of tax ( 270 ) ( 1,539 ) 317 ( 3,377 )

Other comprehensive loss, net of tax ( 654 ) ( 1,128 ) ( 337 ) ( 4,505 )

Comprehensive income (loss) $ ( 3 ) $ ( 788 ) $ 1,396 $ ( 3,278 )

2 unchanged sentences

Condensed Consolidated Balance Sheets

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

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

2023 December 31, 2022

27 unchanged sentences

Stockholders’ Equity

Preferred stock, $ 0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at June 30, 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 June 30, 2023 and December 31, 2022

Preferred stock, $ 0.01 par value — 50,000,000 shares authorized, 13,800 shares issued at September 30, 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 September 30, 2023 and December 31, 2022

Additional paid-in capital 1,869 1,895

9 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders' Equity

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

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

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

20 unchanged sentences

Accumulated Other Comprehensive Income, net of tax, beginning of period ( 3,524 ) ( 3,249 ) ( 3,841 ) 128

Total other comprehensive income (loss) ( 270 ) ( 1,539 ) 317 ( 3,377 )

Total other comprehensive loss ( 654 ) ( 1,128 ) ( 337 ) ( 4,505 )

Accumulated Other Comprehensive Income (Loss), net of tax, end of period ( 4,178 ) ( 4,377 ) ( 4,178 ) ( 4,377 )

12 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2023 2022

9 unchanged sentences

Change in assets and liabilities:

Decrease (increase) in reinsurance recoverables 42 ( 203 )

Increase in reinsurance recoverables ( 10 ) ( 129 )

Net change in accrued and deferred income taxes ( 73 ) ( 184 )

20 unchanged sentences

Other investing activities, net ( 11 ) 15

Net cash provided by investing activities 53 387

Net cash used for investing activities ( 1,266 ) ( 705 )

Financing Activities

8 unchanged sentences

Foreign exchange rate effect on cash 3 ( 18 )

Net increase (decrease) in cash and restricted cash ( 122 ) 11

Net decrease in cash and restricted cash ( 163 ) ( 52 )

Cash and restricted cash – beginning of period 344 337

18 unchanged sentences

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 2022 Form 10-K Annual Report.

Consolidation

5 unchanged sentences

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.

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;

Actual results could differ from those estimates.

The most significant estimates include those used in determining property and casualty and group long-term disability

("LTD") insurance product reserves, net of reinsurance;

evaluation of goodwill for impairment;

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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 adjustments to the reserve for future policy benefits at adoption resulted in establishing a deferred profit liability 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:

3 unchanged sentences

Impact of Adoption on Reserve for Future Policy Benefits

Payout Annuities Life Conversions Paid-up Life DPL Other Total

Payout Annuities Life Conversions Paid-up Life Deferred Profit Liability 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 — —

Update cash flow assumptions and establish deferred profit liability ( 16 ) — ( 2 ) 18 — —

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

5 unchanged sentences

[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, Condensed

Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 was as follows:

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, Condensed Consolidated Statements of Operations and Condensed

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2022 was as follows:

Impact of Adoption on Condensed Consolidated Balance Sheets

8 unchanged sentences

Impact of Adoption on Condensed Consolidated Statements of Operations

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

As previously reported Effect of change As currently reported As previously reported Effect of change As currently reported

11 unchanged sentences

Impact of Adoption on Condensed Consolidated Statements of Comprehensive Income

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

As previously reported Effect of change As currently reported As previously reported Effect of change As currently reported

18 unchanged sentences

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 and six months ended June 30, 2023 and 2022, and is presented in benefits losses and loss adjustments expense in the Condensed Consolidated Statements of Operations.

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 and nine months ended September 30, 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.

8 unchanged sentences

Computation of Basic and Diluted Earnings per Common Share

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

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

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

11 unchanged sentences

Net Income (Loss)

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

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

2023 2022 2023 2022

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

2023 2022 2023 2022

30 unchanged sentences

$ 6,168 $ 5,580 $ 18,127 $ 16,346

[1] For the three months ended June 30, 2023 and 2022, AARP members accounted for earned premiums of $ 710 and $ 675 , respectively.

For the six months ended June 30, 2023 and 2022, AARP members accounted for earned premiums of $ 1.40 billion and $ 1.34 billion, respectively.

[1] For the three months ended September 30, 2023 and 2022, AARP members accounted for earned premiums of $ 731 and $ 695 , respectively.

For the nine months ended September 30, 2023 and 2022, AARP members accounted for earned premiums of $ 2.1 billion and $ 2.0 billion, respectively.

Note 3 - Segment Information

2 unchanged sentences

Non-Insurance Revenue from Contracts with Customers

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

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

Revenue Line Item 2023 2022 2023 2022

26 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of June 30, 2023

Assets and (Liabilities) Carried at Fair Value by Hierarchy Level as of September 30, 2023

Total Quoted Prices in

21 unchanged sentences

Derivative assets

Credit derivatives ( 58 ) — ( 58 ) —

Foreign exchange derivatives 9 — 9 —

7 unchanged sentences

Foreign exchange derivatives 31 — 31 —

Interest rate derivatives ( 3 ) — ( 3 ) —

Total derivative liabilities [2] 30 — 30 —

36 unchanged sentences

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

The Company has overseas deposits included in other investments of $ 70 and $ 62 as of June 30, 2023 and December 31, 2022, 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 $ 65 and $ 62 as of September 30, 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

108 unchanged sentences

Input on Fair Value [2]

As of June 30, 2023

As of September 30, 2023

CLO [3] $ 82 Discounted cash flows Spread 286 bps 288 bps 287 bps Decrease

21 unchanged sentences

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

As of June 30, 2023 and December 31, 2022, the fair values of the Company's level 3 derivatives were less than $ 1 for both periods.

As of September 30, 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.

2 unchanged sentences

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

As of June 30, 2023, no significant adjustments were made by the Company to broker prices received.

As of September 30, 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

5 unchanged sentences

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Total realized/unrealized gains (losses)

Fair value as of March 31, 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 June 30, 2023

Fair value as of June 30, 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 September 30, 2023

Fixed maturities, AFS

10 unchanged sentences

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Total realized/unrealized gains (losses)

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 June 30, 2023

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 September 30, 2023

Fixed Maturities, AFS

13 unchanged sentences

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Total realized/unrealized gains (losses)

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

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

Fixed Maturities, AFS

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

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

10 unchanged sentences

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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Total realized/unrealized gains (losses)

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

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

Fixed Maturities, AFS

20 unchanged sentences

Level 3 Still Held at End of Period

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

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

2023 2022 2023 2022 2023 2022 2023 2022

18 unchanged sentences

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

As of June 30, 2023 and December 31, 2022, the fair value of assets using the fair value option was $ 320 and $ 333 ,

As of September 30, 2023 and December 31, 2022, the fair value of assets using the fair value option was $ 332 and $ 333 ,

respectively, of which $ 173 and $ 178 , respectively, were residual interests of securitizations.

For the three and six months ended June 30, 2023, realized losses related to the change in fair value of assets using the fair value option were $ 3 and $ 11 , respectively.

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

For the three and nine months ended September 30, 2023, realized gains related to the change in fair value of assets using the fair value option were $ 16 and $ 5 , 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.

Financial Instruments Not Carried at Fair Value

Financial Assets and Liabilities Not Carried at Fair Value

June 30, 2023 December 31, 2022

September 30, 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 $ 425 Level 2 $ 499 $ 419

[1] As of June 30, 2023 and December 31, 2022, the carrying amount of mortgage loans is net of ACL of $ 41 and $ 36 , respectively.

[1] As of September 30, 2023 and December 31, 2022, the carrying amount of mortgage loans is net of ACL of $ 46 and $ 36 , respectively.

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

3 unchanged sentences

Net Realized Gains (Losses)

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

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

(Before tax) 2023 2022 2023 2022

12 unchanged sentences

Net realized gains (losses) $ ( 90 ) $ ( 166 ) $ ( 161 ) $ ( 649 )

[1] The change in net unrealized gains (losses) on equity securities still held as of June 30, 2023 and included in net realized gains (losses) were $ 7 and $ 7 for the three and six months ended June 30, 2023, respectively.

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

[2] For the three and six months ended June 30, 2023 includes gains (losses) from transactional foreign currency revaluation of $( 9 ) and $( 16 ), respectively, and gains (losses) on non-qualifying derivatives of $( 39 ) and $( 34 ), respectively.

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

Proceeds from the sales of fixed maturities, AFS totaled $ 0.6 billion and $ 2.0 billion for the three and six months ended June 30, 2023, respectively, and $ 2.6 billion and $ 8.1 billion for the three and six months ended June 30, 2022, respectively.

[1] The change in net unrealized gains (losses) on equity securities still held as of September 30, 2023 and included in net realized gains (losses) were $( 14 ) and $( 5 ) for the three and nine months ended September 30, 2023, respectively.

The change in 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.

[2] For the three and nine months ended September 30, 2023 includes gains (losses) from transactional foreign currency revaluation of $ 13 and $( 3 ), respectively, and gains (losses) on non-qualifying derivatives of $( 74 ) and $( 108 ), respectively.

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.

Proceeds from the sales of fixed maturities, AFS totaled $ 0.8 billion and $ 2.8 billion for the three and nine months ended September 30, 2023, respectively, and $ 1.5 billion and $ 9.6 billion for the three and nine months ended September 30, 2022, respectively.

Accrued Interest Receivable on Fixed Maturities, AFS and Mortgage Loans

As of June 30, 2023 and December 31, 2022, the Company reported accrued interest receivable related to fixed maturities, AFS of $ 346 and $ 338 , respectively, and accrued interest receivable related to mortgage loans of $ 19 and $ 18 , respectively.

As of September 30, 2023 and December 31, 2022, the Company reported accrued interest receivable related to fixed maturities, AFS of $ 369 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.

6 unchanged sentences

The ACL is written off against the amortized cost in the period in which all or a portion of the related fixed maturity is determined to be uncollectible .

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

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

Note 5 - Investments

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

For non-structured securities, assumptions include, but are not limited to, economic and industry-specific trends and fundamentals, instrument-specific developments including

changes in credit ratings, industry earnings multiples and the issuer’s ability to restructure, access capital markets, and execute asset sales.

For structured securities, assumptions include, but are not limited to, various performance indicators such as historical and projected default and recovery rates, credit ratings, current and projected delinquency rates, loan-to-value (" LTV") ratios, average cumulative collateral loss rates that vary by vintage year, prepayment speeds, and property value declines.

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

ACL on Fixed Maturities, AFS by Type

Three Months Ended June 30,

Three Months Ended September 30,

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

3 unchanged sentences

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

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

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

1 unchanged sentence

ACL on Fixed Maturities, AFS by Type

Six Months Ended June 30,

Nine Months Ended September 30,

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

3 unchanged sentences

Reduction due to sales ( 5 ) — ( 5 ) — ( 1 ) — ( 1 )

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

Net increases (decreases) on fixed maturities where an allowance was previously recorded 2 2 4 ( 1 ) 1 — —

5 unchanged sentences

Fixed Maturities, AFS, by Type

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cost ACL Gross

11 unchanged sentences

Fixed Maturities, AFS, by Contractual Maturity Year

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amortized Cost Fair Value Amortized Cost Fair Value

9 unchanged sentences

Concentration of Credit Risk

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

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

The Company had no investment exposure to any credit concentration risk of a single issuer greater than 10% of the Company's stockholders' equity as of June 30, 2023 or December 31, 2022 other than U.S.

The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification, where applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate credit risk.

The Company had 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, 2023 or December 31, 2022 other than U.S.

government securities and certain U.S.

4 unchanged sentences

Unrealized Losses on Fixed Maturities, AFS

Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of June 30, 2023

Unrealized Loss Aging for Fixed Maturities, AFS by Type and Length of Time as of September 30, 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 June 30, 2023, fixed maturities, AFS in an unrealized loss position consisted of 4,667 instruments, and were primarily depressed due to higher interest rates and/or wider credit spreads since the purchase date.

As of June 30, 2023, 93 % of these fixed maturities were depressed less than 20% of cost or amortized cost.

The decrease in unrealized losses during the six months ended June 30, 2023, was primarily attributable to tighter credit spreads.

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

As of September 30, 2023, fixed maturities, AFS in an unrealized loss position consisted of 5,020 instruments and were primarily depressed due to higher interest rates and/or wider credit spreads since the purchase date.

As of September 30, 2023, 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, 2023, was primarily due to a decrease in valuations as a result of higher interest rates.

Most of the fixed maturities depressed for twelve months or more relate to the corporate sector, municipal bonds, RMBS, and CMBS 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.

8 unchanged sentences

The first two to four years of the 10-year period assume a specific modeled economic scenario (including moderate upside, moderate recession and severe recession scenarios) and then revert to historical long-term assumptions over the remaining period.

Using these economic scenarios, the forecasting model projects property-specific operating income and capitalization rates used to estimate the value of a future operating income stream.

Using these economic scenarios, the forecasting model projects property-specific operating income and capitalization rates used

Note 5 - Investments

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

operating income and the property valuations derived from capitalization rates are compared to loan payment and principal amounts to create debt service coverage ratios ("DSCRs") and LTVs over the forecast period.

to estimate the value of a future operating income stream.

The operating income and the property valuations derived from capitalization rates are compared to loan payment and principal amounts to create debt service coverage ratios ("DSCRs") and LTVs over the forecast period.

The Company's process also considers qualitative factors.

6 unchanged sentences

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

As of June 30, 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 June 30, 2023 or December 31, 2022.

For the three and six months ended June 30, 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.

As of September 30, 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 September 30, 2023 or December 31, 2022.

For the three and nine months ended September 30, 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 June 30, Six Months Ended June 30,

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

2023 2022 2023 2022

1 unchanged sentence

Current period provision (release) 5 — 10 7

ACL as of June 30, $ 41 $ 36 $ 41 $ 36

The increase in the allowance for the 2023 period is primarily attributable to the overall weaker projected real estate fundamentals, and to a lesser extent, net additions of new loans.

The weighted-average LTV ratio of the Company’s mortgage loan portfolio was 52 % as of June 30, 2023, while the weighted-average LTV ratio at origination of these loans was 59 %.

ACL as of September 30, $ 46 $ 36 $ 46 $ 36

The increase in the allowance for the 2023 period is primarily attributable to revised economic scenarios, lower property valuations, and overall weaker real estate fundamentals.

The weighted-average LTV ratio of the Company’s mortgage loan portfolio was 53 % as of September 30, 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.

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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 June 30, 2023

Mortgage Loans LTV & DSCR by Origination Year as of September 30, 2023

2023 2022 2021 2020 2019 2018 & Prior Total

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Mortgage Loans by Region

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amortized Cost Percent of Total Amortized Cost Percent of Total

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Mortgage Loans by Property Type

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amortized Cost Percent of Total Amortized Cost Percent of Total

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

As of June 30, 2023 and December 31, 2022, the Company held no mortgage loans considered past due.

As of September 30, 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 June 30, 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 September 30, 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 June 30, 2023 and December 31, 2022, because servicing fees were market-level fees at origination and remain adequate to compensate the Company for servicing the loans.

Servicing rights are carried at the lower of cost or fair value and were $ 0 as of September 30, 2023 and December 31, 2022, because servicing fees were market-level fees at origination and remain adequate to compensate the Company for servicing the loans.

Variable Interest Entities

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Consolidated VIEs

As of June 30, 2023 and December 31, 2022, the Company did no t hold any securities for which it is the primary beneficiary.

As of September 30, 2023 and December 31, 2022, the Company did no t hold any securities for which it is the primary beneficiary.

Non-Consolidated VIEs

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

The Company’s maximum exposure to loss as of June 30, 2023 and December 31, 2022 was limited to the total carrying value of $ 2.7 billion and $ 2.6 billion, respectively, which are a portion of the investments in limited partnerships and other alternative investments in the Company's Condensed Consolidated Balance Sheets that are primarily recorded using the equity method of accounting.

As of June 30, 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.

The Company’s maximum exposure to loss as of September 30, 2023 and December 31, 2022 was limited to the total carrying value of $ 2.8 billion and $ 2.6 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, 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.

For further discussion of these investments, see Equity Method Investments within Note 5 - Investments of Notes to Consolidated Financial Statements included in the Company’s 2022 Form 10-K Annual Report.

Note 5 - Investments

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

further discussion of these investments, see Equity Method Investments within Note 5 - Investments of Notes to Consolidated Financial Statements included in the Company’s 2022 Form 10-K Annual Report.

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

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The maturity of these transactions is generally within one year.

The agreements require additional collateral to be transferred to the Company under specified conditions and the Company has the right to sell or re-pledge the securities received.

The agreements require additional collateral to be transferred to the Company under specified conditions and the Company has the right to sell or re-pledge the securities

The Company accounts for reverse repurchase agreements as collateralized financing.

As of June 30, 2023 and

December 31, 2022, the Company reported $ 33 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.

As of September 30, 2023 and December 31, 2022, the Company reported $ 32 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 June 30, 2023 and December 31, 2022, the Company pledged collateral of $ 7 and $ 7 , respectively, of U.S.

As of September 30, 2023 and December 31, 2022, the Company pledged collateral of $ 6 and $ 7 , respectively, of U.S.

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

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Fair Value Fair Value

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Some of the Company's derivatives satisfy hedge accounting requirements as outlined in Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements, included in The Hartford’s 2022 Form 10-K Annual Report.

Typically, these hedging instruments include interest rate swaps and, to a lesser extent, foreign currency swaps where the terms or expected cash flows of the hedged item closely match the terms of the swap.

The interest rate swaps are typically used to manage interest rate duration of certain fixed maturity securities or debt instruments issued.

Typically, these hedging instruments include interest rate swaps and, to a lesser extent, foreign currency swaps where the terms or expected cash flows of the hedged

Note 6 - Derivatives

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

item closely match the terms of the swap.

The interest rate swaps are typically used to manage interest rate duration of certain fixed maturity securities or debt instruments issued.

Cash Flow Hedges

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The Company uses interest rate swaps and futures to manage interest rate duration between assets and liabilities.

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

As of June 30, 2023 and December 31, 2022, the notional amount of interest rate swaps

in offsetting relationships was $ 13.1 billion and $ 6.6 billion, respectively.

As of June 30, 2023 the notional amount of interest rate swaps in offsetting relationships included $ 6.5 billion of OTC-cleared swaps as part of the Chicago Mercantile Exchange ("CME") cleared swap conversion process related to reference rate reform.

These swaps are expected to mature by September 30, 2023.

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, 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

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Notional Amount Fair Value Fair Value Fair Value

Hedge Designation/ Derivative Type Jun 30, 2023 Dec.

31, 2022 Jun 30, 2023 Dec.

Hedge Designation/ Derivative Type Sep 30, 2023 Dec.

31, 2022 Sep 30, 2023 Dec.

Cash flow hedges

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Total derivatives $ 17,166 $ 10,755 $ ( 15 ) $ 47 $ 57 $ 62 $ ( 72 ) $ ( 15 )

[1] As of June 30, 2023, notional amount includes $ 700 of OTC-cleared cash flow hedge interest rate swaps and $ 6.5 billion of OTC-cleared non-qualifying interest rate swaps as part of the CME cleared swap conversion process due to reference rate reform.

These swaps are expected to mature by September 30, 2023.

Offsetting of Derivative Assets/Liabilities

The following tables present the gross fair value amounts, the offsetting amounts, and net position of derivative instruments eligible for offset in the Company's Condensed Consolidated Balance Sheets.

Offsetting amounts include fair value amounts, income accruals and related cash collateral receivables and

payables associated with derivative instruments that are traded under a common master netting agreement, as described in the preceding discussion.

Offsetting amounts include fair value amounts,

income accruals and related cash collateral receivables and payables associated with derivative instruments that are traded under a common master netting agreement, as described in the preceding discussion.

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

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

As of June 30, 2023

As of September 30, 2023

Other investments $ 57 $ 53 $ ( 45 ) $ 49 $ — $ 4

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Gains (Losses) Recognized in OCI

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

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

2023 2022 2023 2022

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Gains (Losses) Reclassified from AOCI into Income

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

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

2023 2022 2023 2022

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Total amounts presented on the Condensed Consolidated Statement of Operations $ 597 $ 50 $ 487 $ 50 $ 1,652 $ 150 $ 1,537 $ 163

As of June 30, 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 $ 4 .

As of September 30, 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 $ 2 .

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

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

During the three and six months ended June 30, 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.

During the three and nine months ended September 30, 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

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

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

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

2023 2022 2023 2022

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Credit derivatives that purchase credit protection ( 3 ) — ( 55 ) 5

Equity contracts

Equity options — ( 2 ) — ( 2 )

Commodity contracts

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

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

A credit event payment will typically be

equal to the notional value of the swap contract less the value of the referenced security issuer’s debt obligation after the occurrence of the credit event.

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

there is a credit event.

A credit event payment will typically be equal to the notional value of the swap contract less the value of the referenced security issuer’s debt obligation after the occurrence of the credit event.

A credit event is generally defined as a default on contractually obligated interest or principal payments or bankruptcy of the referenced entity.

The credit default swaps in which the Company assumes credit risk reference baskets of standard diversified portfolios of CMBS issuers.

Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Credit Risk Assumed Derivatives by Type

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Obligation(s) [1]

As of June 30, 2023

As of September 30, 2023

Basket credit default swaps [4]

Investment grade risk exposure $ 100 $ ( 1 ) 5 years CMBS Credit AAA $ 100 $ 1

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

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

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

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

Note 6 - Derivatives

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

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 June 30, 2023 and December 31, 2022, the Company ha s pl edged cash collateral associated with derivative instruments of $ 65 and less than $ 1 , respectively .

As of September 30, 2023 and December 31, 2022, the Company ha s pl edged cash collateral associated with derivative instruments of $ 63 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 June 30, 2023 and December 31, 2022, the Company pledged securities collateral associated with derivative instruments with a fair value of $ 6 and $ 8 , respectively, which have been included in fixed maturities on the Company's Condensed Consolidated Balance Sheets.

As of September 30, 2023 and December 31, 2022, the Company pledged securities collateral associated with derivative instruments with a fair value of $ 2 and $ 8 , respectively, which have been included in fixed maturities on the Company's Condensed Consolidated Balance Sheets.

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

In addition, as of June 30, 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

As of June 30, 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 $ 196 and $ 57 , respectively, which are included within fixed maturities on the Company's Condensed Consolidated Balance Sheets.

As of June 30, 2023 and December 31, 2022, the Company accepted cash collateral associated with derivative instruments of $ 45 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 June 30, 2023 and December 31, 2022, with a fair value of $ 0 and $ 1 , respectively, which the Company has the right to repledge or sell.

As of June 30, 2023 and December 31, 2022, the Company had no repledged securities.

In addition, as of June 30, 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 .

In addition, as of September 30, 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 September 30, 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 $ 217 and $ 57 , respectively, which are included within fixed maturities on the Company's Condensed Consolidated Balance Sheets.

As of September 30, 2023 and December 31, 2022, the Company accepted cash collateral associated with derivative instruments of $ 46 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 September 30, 2023 and December 31, 2022, with a fair value of $ 0 and $ 1 , respectively, which the Company has the right to repledge or sell.

As of September 30, 2023 and December 31, 2022, the Company had no repledged securities.

In addition, as of September 30, 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

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PREMIUMS RECEIVABLE AND AGENTS' BALANCES

Premiums Receivable and Agents' Balances

As of June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

Premiums receivable, excluding receivables for losses within a deductible and retrospectively-rated policy premiums ("loss sensitive business") $ 5,281 $ 4,698

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

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.

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.

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.

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The probability of default factors are historical corporate defaults for receivables with similar durations estimated through multiple economic cycles.

Credit ratings are

Note 7 - Premiums Receivable and Agents' Balances

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

forward-looking and consider a variety of economic outcomes.

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

The loss given default factors are based on a study of historical recovery rates for general creditors through multiple economic cycles.

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See Note 5 - Investments.

The increase in the ACL in the three and six months ended June 30, 2023 reflected the provision required on increased premiums written in the quarter and recoveries, partially offset by write-offs.

The increase in the ACL in the nine months ended September 30, 2023 reflected the provision required on increased premiums written in the quarter and recoveries, partially offset by write-offs.

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

June 30, 2023 June 30, 2022

September 30, 2023 September 30, 2022

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

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Ending ACL $ 92 $ 25 $ 117 $ 85 $ 23 $ 108

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

June 30, 2023 June 30, 2022

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 Nine Months Ended

September 30, 2023 September 30, 2022

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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 June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

Group Benefits

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Balances are considered past due when amounts that have been billed are not collected within contractually stipulated time periods, generally 30, 60 or 90 days.

To manage reinsurer credit risk, a reinsurance security review committee evaluates the credit standing, financial performance, management and operational quality of each potential reinsurer.

In placing reinsurance, the Company considers the nature of the risk reinsured, including the expected liability payout duration, and establishes limits tiered by reinsurer credit rating.

To manage reinsurer credit risk, a reinsurance security review committee evaluates the

credit standing, financial performance, management and operational quality of each potential reinsurer.

In placing reinsurance, the Company considers the nature of the risk

Note 8 - Reinsurance

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

reinsured, including the expected liability payout duration, and establishes limits tiered by reinsurer credit rating.

Where its contracts permit, the Company secures future claim obligations with various forms of collateral or other credit enhancement, including irrevocable letters of credit, secured trusts, funds held accounts and group wide offsets.

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The probability of default is assigned based on each reinsurer's credit rating, or a rating is estimated if no external rating is available.

Credit ratings are

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

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

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

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

through multiple economic cycles.

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

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

Note 8 - Reinsurance

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Uncollectible Reinsurance for the Three and Six Months Ended

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

Allowance for Uncollectible Reinsurance for the Three and Nine Months Ended

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

2023 2022 2023 2022

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Total allowance for uncollectible reinsurance $ 109 $ 105 $ 109 $ 105

Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

RESERVE FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

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Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

For the six months ended June 30,

For the nine months ended September 30,

Beginning liabilities for unpaid losses and loss adjustment expenses, gross

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Unfavorable (Favorable) Prior Accident Year Development

For the six months ended June 30,

For the nine months ended September 30,

Workers’ compensation $ ( 174 ) $ ( 143 )

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Total prior accident year development $ ( 82 ) $ ( 147 )

Re-estimates of prior accident year reserves for the six months ended June 30, 2023

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

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Also included was a decrease in reserves for extra contractual liability claims and other miscellaneous run-off lines.

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.

Package business reserves decreased primarily due to lower than previously estimated property severity for accident year 2019 and 2021.

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

Commercial property reserves were flat primarily due to unfavorable development for accident year 2022 in middle & large commercial, offset by favorable development in global specialty.

Professional liability reserves decreased modestly due to favorable development on directors' and officers' claims for the 2019 to 2021 accident years partially offset by deterioration

on errors and omissions claims primarily for the 2018 accident year.

Bond reserves were increased primarily due to unfavorable development for 2013 and prior accident years related to customs bonds.

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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 six months ended June 30, 2022

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

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 & large commercial for the 2016 to 2019 accident years, an increase in excess casualty for the 2019 accident year, and increases in primary construction on older accident years, partially offset by a decrease in reserves for other mass torts.

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

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

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

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

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 2016 to 2020 and were increased in Commercial Lines principally due to a higher number of large claims in accident years 2017 to 2019.

Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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Settlement Agreement with Boy Scouts of America

agreed to pay $ 787 for sexual molestation and sexual abuse claims associated with liability policies issued by various Hartford Writing Companies in the 1970s and early 1980s.

On February 14, 2022, the Company executed a final settlement agreement (the “Settlement”) with the Boy Scouts of America (“BSA”), the Local Councils, and the attorneys representing a majority of the alleged victims, pursuant to which The Hartford agreed to pay $ 787 for sexual molestation and sexual abuse claims associated with liability policies issued by various Hartford Writing Companies in the 1970s and early 1980s.

In exchange for its payment, the Company receives a complete release of its policies issued to BSA and the Local Councils, as well as an injunction against further abuse claims involving BSA.

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Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses

For the six months ended June 30,

For the nine months ended September 30,

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

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[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 $ 91 and $ 92 for the six months ended June 30, 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 six months ended June 30, 2023

[2] Includes unallocated loss adjustment expenses ("ULAE") of $ 136 and $ 138 for the nine months ended September 30, 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 nine months ended September 30, 2023

Group disability- Prior period reserve estimates decreased by approximately $ 369 largely driven by group long-term disability claim incidence lower than prior assumptions and strong recoveries on prior incurral year claims.

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Supplemental accident and health- Prior period reserve estimates decreased by approximately $ 9 driven by lower than previously expected claim incidence.

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

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

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

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

Note 10 - Reserve for Future Policy Benefits

Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

RESERVE FOR FUTURE POLICY BENEFITS

Rollforward of Reserve for Future Policy Benefits

For the six months ended June 30,

For the nine months ended September 30,

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

6 unchanged sentences

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

Effect of changes in cash flow assumptions ( 2 ) 1 — — — —

Effect of actual variances from expected experience 1 4 ( 1 ) — 5 —

Adjusted beginning balance 135 131 230 141 138 248

Interest accrual 4 9 3 4 8 4

Interest accrual and other 5 14 7 6 13 5

Benefit Payments ( 9 ) ( 20 ) ( 17 ) ( 9 ) ( 21 ) ( 19 )

5 unchanged sentences

Net Reserve for Future Policy Benefits

As of June 30,

As of September 30,

Payout Annuities $ 128 $ 139

1 unchanged sentence

Paid-up Life 176 193

Deferred Profit Liability 20 19

Total $ 463 $ 508

Note 10 - Reserve for Future Policy Benefits

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Undiscounted Expected Future Gross Premiums and Benefit Payments

As of June 30,

As of September 30,

Payout Annuities [1]

6 unchanged sentences

[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 six months ended June 30,

As of September 30,

Payout Annuities

6 unchanged sentences

Current discount rate 5.9 % 5.3 %

Gross premiums and interest accretion recognized on long-duration insurance policies for the six months ended June 30, 2023 and 2022 were immaterial.

The Company completed a review of cash flow assumptions in the third quarter 2023, resulting in immaterial changes to the reserve for future policy benefits.

For payout annuities, the net effect of updating cash flow assumptions was partially offset by a corresponding impact to the deferred profit liability.

Gross premiums and interest accretion recognized on long-duration insurance policies for the nine months ended September 30, 2023 and 2022 were immaterial.

OTHER POLICYHOLDER FUNDS AND BENEFITS PAYABLE

Other policyholder funds and benefits payable of $ 647 and $ 664 as of June 30, 2023 and 2022 respectively, included universal life long-duration contacts of $ 228 and $ 242 as well as policyholder balances related to short-duration contracts of $ 419 and $ 422 .

Other policyholder funds and benefits payable of $ 645 and $ 659 as of September 30, 2023 and 2022 respectively, included universal life long-duration contacts of $ 226 and $ 236 as well as policyholder balances related to short-duration contracts of $ 419 and $ 423 .

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 six months ended June 30,

For the nine months ended September 30,

Balance, beginning of the period $ 232 $ 253

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[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 June 30, 2023 and 2022, universal life contracts of $ 227 and $ 240 , respectively, had crediting rates at their guaranteed minimums ranging from 4 %- 5 % .

As of September 30, 2023 and 2022, universal life contracts of $ 225 and $ 234 , respectively, had crediting rates at their guaranteed minimums ranging from 4 %- 5 % .

Note 12 - Income Taxes

3 unchanged sentences

Income Tax Rate Reconciliation

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

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

2023 2022 2023 2022

6 unchanged sentences

Rollforward of Unrecognized Tax Benefits

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

2023 2022 2023 2022

5 unchanged sentences

Other Tax Matters

As of June 30, 2023, the Company has a deferred tax asset for foreign net operating losses of $ 40 partially offset by a valuation allowance of $ 21 .

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

As of September 30, 2023, the Company has a deferred tax asset for foreign net operating losses ("NOLs") of $ 42 partially offset by a valuation allowance of $ 20 .

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

Management has assessed the need for a valuation allowance against its deferred tax assets based on tax character and jurisdiction.

5 unchanged sentences

Junior Subordinated Debentures

Financial Conduct Authority ("FCA") announced that publication of U.S.

dollar London Inter Bank Offered Rate (“LIBOR”) on a representative basis will cease immediately after June 30, 2023.

LIBOR is used as a benchmark or reference rate for certain investments and derivatives the Company owns, and floating rate debt the Company has issued.

Financial Conduct Authority ("FCA") ceased publication of U.S.

dollar London Interbank Offered Rate ("LIBOR") on a representative basis immediately after June 30, 2023.

LIBOR was used as a benchmark or reference rate for certain investments and derivatives the Company owns, and floating rate debt the Company has issued.

Uncertainties and risks relating to the transition from LIBOR have been reduced by the federal Adjustable Interest Rate (LIBOR) Act, which addresses replacement of LIBOR in certain contracts governed by U.S.

2 unchanged sentences

Prior to July 1, 2023, the Company's $ 500 junior subordinated debentures due 2067 paid interest at a rate of LIBOR plus 2.125 %.

Effective July 1, 2023, the interest rate on the $ 500 junior subordinated debentures due 2067 is determined based on a reference rate of 3-month CME term Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment of 0.26161 % plus 2.125 %.

Effective July 1, 2023, the interest rate on the $ 500 junior subordinated debentures due 2067 is determined based on a reference rate of 3-month Chicago Mercantile Exchange ("CME") term Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment of 0.26161 % plus 2.125 %.

The Company's interest rate swap agreements that converted the LIBOR variable interest payments on the $ 500 junior subordinated debentures to fixed interest payments were terminated and new interest rate swap agreements were entered into that reference SOFR so that interest rate swaps continue to effectively convert the variable interest payments to fixed interest payments of approximately 4.39 %.

Note 14 - Commitments and Contingencies

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

Management establishes liabilities for these contingencies at its “best estimate,” or, if no one number within the range of possible losses is more probable than any other, the Company records an estimated liability at the low end of the range of losses.

The Hartford is involved in claims litigation arising in the ordinary course of business, both as a liability insurer defending or providing indemnity for third-party claims brought against insureds and as an insurer defending coverage claims brought against it.

Note 14 - Commitments and Contingencies

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

8 unchanged sentences

COVID-19 Pandemic Business Income Insurance Litigation

Like many others in the property and casualty insurance industry, beginning in April 2020, various direct and indirect subsidiaries of the Company (collectively the "Hartford Writing

Companies”), and in some instances the Company itself, have been served as defendants in lawsuits seeking insurance coverage under commercial insurance policies issued by the Hartford Writing Companies for alleged losses resulting from the shutdown or suspension of their businesses due to the spread of COVID-19.

Like many others in the property and casualty insurance industry, beginning in April 2020, various direct and indirect subsidiaries of the Company (collectively the "Hartford Writing Companies”), and in some instances the Company itself, have been served as defendants in lawsuits seeking insurance coverage under commercial insurance policies issued by the Hartford Writing Companies for alleged losses resulting from the shutdown or suspension of their businesses due to the spread of COVID-19.

More than 300 such lawsuits have been filed, of which more than 60 purport to be filed on behalf of broad nationwide or statewide classes of policyholders.

1 unchanged sentence

Although the allegations vary, the plaintiffs generally seek a declaration of insurance coverage, damages for breach of contract in unspecified amounts, interest, and attorneys' fees.

Many of the lawsuits also allege that the insurance claims were denied in bad faith or otherwise in violation of state laws and seek extra-contractual or punitive damages.

Many of the lawsuits also allege that the insurance claims were denied in bad faith or otherwise in violation of state laws and

seek extra-contractual or punitive damages.

Some of the lawsuits also allege that the Hartford Writing Companies engaged in unfair business practices by collecting or retaining excess premium.

9 unchanged sentences

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 Hartford Writing Companies have received numerous favorable rulings on appeal, with a few 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.

Accordingly, management cannot now reasonably estimate the possible loss or range of loss, if any.

Nonetheless, given the large number of claims and potential claims, the indeterminate amounts sought, and the inherent unpredictability of litigation, it is possible that adverse outcomes, if any, in the aggregate, could have a material adverse effect on the Company’s consolidated operating results or liquidity.

Note 14 - Commitments and Contingencies

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

Accordingly, management cannot now reasonably estimate the possible loss or range of loss, if any.

Run-off Asbestos and Environmental Claims

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

The Company continues to receive A&E claims.

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

1 unchanged sentence

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").

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, respectively.

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

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

8 unchanged sentences

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

Further uncertainties include insolvencies of other carriers, insolvencies of insureds and unanticipated developments pertaining to the Company’s

ability to recover reinsurance for A&E claims.

Further uncertainties include insolvencies of other carriers, insolvencies of insureds and unanticipated developments pertaining to the Company’s ability to recover reinsurance for A&E claims.

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 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.

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.

7 unchanged sentences

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 June 30, 2023, the Company reported $ 327 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").

For its Run-off A&E claims, as of September 30, 2023, the Company reported $ 292 of net A&E 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.

1 unchanged sentence

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 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, 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

Note 14 - Commitments and Contingencies

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

As of June 30, 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.

could ultimately exceed the $ 1.5 billion treaty limit in which case any adverse development in excess of the treaty limit would be absorbed as a charge to earnings by the Company.

In these scenarios, the effect of these charges could be material to the Company’s consolidated operating results or liquidity.

1 unchanged sentence

Derivative Commitments

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings, as set by nationally recognized statistical agencies, of the individual legal

entity that entered into the derivative agreement.

Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings, as set by nationally recognized statistical agencies, of the individual legal entity that entered into the derivative agreement.

If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could, in certain instances, terminate the agreements and demand immediate settlement of all outstanding derivative positions traded under each impacted bilateral agreement.

1 unchanged sentence

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

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position as of June 30, 2023 was $ 78 for which the legal entities have posted collateral of $ 69 in the normal course of business.

Based on derivative contractual terms as of June 30, 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.

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, 2023 was $ 63 for which the legal entities have posted collateral of $ 64 in the normal course of business.

Based on derivative contractual terms as of September 30, 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.

3 unchanged sentences

Equity Repurchase Program

During the six months ended June 30, 2023 and 2022, the Company repurchased $ 700 ( 9.7 million shares) and $ 850 ( 12.0 million shares), respectively, of common stock under Board authorized share repurchase programs covering the applicable periods.

As of June 30, 2023, the Company has $ 2.0 billion remaining for equity repurchases under the current $ 3.0 billion share repurchase program, which is effective until December 31, 2024.

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

the Company repurchased $ 101 ( 1.4 million shares) under this repurchase program.

During the nine months ended September 30, 2023 and 2022, the Company repurchased $ 1.05 billion ( 14.6 million shares) and $ 1.2 billion ( 17.4 million shares), respectively, of common stock under Board authorized share repurchase programs covering the applicable periods.

As of September 30, 2023, the Company has $ 1.7 billion remaining for equity repurchases under the current $ 3.0 billion share repurchase program, which is effective until December 31, 2024.

During the period

October 1, 2023 through October 25, 2023, the Company repurchased $ 122 ( 1.7 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 June 30, 2023

Changes in AOCI, Net of Tax for the Three Months Ended September 30, 2023

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

9 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in AOCI, Net of Tax for the Six Months Ended June 30, 2023

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

7 unchanged sentences

Reclassifications from AOCI

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Affected Line Item in the Condensed Consolidated Statement of Operations

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Affected Line Item in the Condensed Consolidated Statement of Operations

Net Unrealized Gain (Loss) on Fixed Maturities, AFS

25 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

6 unchanged sentences

Ending balance $ ( 3,038 ) $ ( 7 ) $ 69 $ 14 $ 37 $ ( 1,452 ) $ ( 4,377 )

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

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

7 unchanged sentences

Reclassifications from AOCI

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

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

Net Unrealized Gain (Loss) on Fixed Maturities, AFS

27 unchanged sentences

Pension Benefits Other Postretirement Benefits

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

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

2023 2022 2023 2022 2023 2022 2023 2022

9 unchanged sentences

The activities are expected to be substantially complete by the end of 2023.

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

and unpaid restructuring costs are included in other liabilities in the June 30, 2023 and December 31, 2022 Condensed Consolidated Balance Sheets.

Subsequent to June 30, 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.

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, 2023 and December 31, 2022 Condensed Consolidated Balance Sheets.

Subsequent to September 30, 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 $ 130 , before tax, and will be recognized in Corporate for segment reporting.

1 unchanged sentence

Restructuring and Other Costs, Before Tax

Incurred in the Three Months Ended June 30, Incurred in the Six Months Ended June 30, Cumulative Incurred Through June 30, 2023 Total Amount Expected to be Incurred

Incurred in the Three Months Ended September 30, Incurred in the Nine Months Ended September 30, Cumulative Incurred Through September 30, 2023 Total Amount Expected to be Incurred

2023 2022 2023 2022

7 unchanged sentences

Accrued Restructuring and Other Costs

Six Months Ended June 30, 2023

Nine Months Ended September 30, 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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

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

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