What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-10-26 compared with 2023-07-27 · 383 added, 385 removed, 1514 unchanged (34% of the section changed)

5 unchanged sentences

Part I, Item 1A, Risk Factors in The Hartford’s 2022 Form 10-K Annual Report;

and our other filings with the Securities and Exchange Commission.

and our other filings with the Securities and Exchange Commission ("SEC").

The Hartford undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

65 unchanged sentences

Reconciliation of Net Income to Core Earnings

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

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

2023 2022 2023 2022

9 unchanged sentences

Core earnings $ 708 $ 472 $ 1,832 $ 1,747

[1]Primarily represents the federal income tax expense (benefit) related to before tax items not included in core earnings.

[1]Primarily represents the federal income tax benefit related to before tax items not included in core earnings.

Core Earnings Margin- The Hartford uses the non-GAAP measure core earnings margin to evaluate, and believes it is an important measure of, the Group Benefits segment's operating performance.

6 unchanged sentences

A reconciliation of net income margin to core earnings margin is set forth in the Results of Operations section within MD&A - Group Benefits.

Current Accident Year Catastrophe Ratio- A component of the loss and loss adjustment expense ratio, represents the ratio of catastrophe losses incurred in the current accident year (net of reinsurance) to earned premiums.

events, a catastrophe is an event that causes $25 or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers, as defined by the Property Claim Services office of Verisk.

9 unchanged sentences

The expense ratio for Commercial Lines, Personal Lines and Group Benefits does not include integration and other transaction costs associated with an acquired business.

Fee Income- Is largely driven from amounts earned as a result of contractually defined percentages of assets under management in our Hartford Funds business.

Fee Income- Is largely driven from amounts earned as a result of contractually defined percentages of AUM in our Hartford Funds business.

These fees are generally earned on a daily basis.

13 unchanged sentences

Current Accident Year Loss and Loss Adjustment Expense Ratio Before Catastrophes- A measure of the cost of non-catastrophe loss and loss adjustment expenses incurred in the current accident year divided by earned premiums.

Management believes that the current accident year loss and loss adjustment expense ratio before catastrophes is a performance measure that is useful to investors as it removes the impact of volatile and unpredictable catastrophe losses and prior accident year development.

Loss Ratio, excluding Buyouts- Utilized for the Group Benefits segment and is expressed as a ratio of benefits, losses and loss adjustment expenses, excluding those related to buyout premiums, to premiums and other considerations, excluding buyout premiums.

10 unchanged sentences

Policies in Force- Represents the number of policies with coverage in effect as of the end of the period.

The number of policies in force is a growth measure used for Personal Lines

and standard commercial lines (small commercial and middle market lines within middle & large commercial) and is affected by both new business growth and policy count retention.

The number of

policies in force is a growth measure used for Personal Lines and standard commercial lines (small commercial and middle market lines within middle & large commercial) and is affected by both new business growth and policy count retention.

Policyholder Dividend Ratio- The ratio of policyholder dividends to earned premium.

13 unchanged sentences

Renewal written price changes reflect the property and casualty insurance market cycle.

Prices tend to increase for a particular line of business when insurance carriers

Prices tend to

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

have incurred significant losses in that line of business in the recent past or the industry as a whole commits less of its capital to writing exposures in that line of business.

increase for a particular line of business when insurance carriers have incurred significant losses in that line of business in the recent past or the industry as a whole commits less of its capital to writing exposures in that line of business.

Prices tend to decrease when recent loss experience has been favorable or when competition among insurance carriers increases.

8 unchanged sentences

A reconciliation of ROA to ROA, core earnings is set forth in the Results of Operations section within MD&A - Hartford Funds.

Underlying Combined Ratio- This non-GAAP financial measure of underwriting results represents the combined ratio before catastrophes, prior accident year development and current accident year change in loss reserves upon acquisition of a business.

Combined ratio is the most directly comparable

GAAP measure.

of a business.

Combined ratio is the most directly comparable GAAP measure.

The Company believes this ratio is an important measure of the trend in profitability since it removes the impact of volatile and unpredictable catastrophe losses and prior accident year loss and loss adjustment expense reserve development.

11 unchanged sentences

Reconciliation of Net Income to Underwriting Gain (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

4 unchanged sentences

Net realized losses 38 95 108 384

Other expense — 1 — 7

Other expense (income) (2) 3 (2) 10

Income tax expense 130 84 339 280

2 unchanged sentences

Net income (loss) $ (12) $ (36) $ (73) $ 47

Adjustments to reconcile net income (loss) to underwriting gain (loss):

Adjustments to reconcile net income (loss) to underwriting loss:

Net investment income (47) (31) (119) (99)

Net realized losses 5 11 11 38

Net servicing and other expense (income) (7) (3) (13) (7)

Net servicing and other income (3) (6) (16) (13)

Income tax expense (benefit) (5) (10) (23) 11

Underwriting gain (loss) $ (113) $ (13) $ (158) $ 56

Underwriting loss $ (62) $ (72) $ (220) $ (16)

P&C Other Operations

2 unchanged sentences

Net investment income (18) (14) (51) (46)

Net realized gains 1 9 4 13

Net realized losses 2 4 6 17

Income tax expense (benefit) 2 2 6 (2)

37 unchanged sentences

In addition to appropriately evaluating and pricing risks, the profitability of the Group Benefits business depends on other factors, including the Company’s response to pricing decisions and other actions taken by competitors, its ability to offer voluntary products and self-service capabilities, the persistency of its sold business and its ability to manage its expenses which it seeks to achieve through economies of scale and operating efficiencies.

The financial results of the Company’s mutual fund and ETF businesses depend largely on the amount of assets under management and the level of fees charged based, in part, on asset share class and fund type.

Changes in assets under management are driven by the two main factors of net flows and the market return of the funds, which are heavily influenced by the return realized in the equity and bond markets.

The financial results of the Company’s mutual fund and ETF businesses depend largely on the amount of AUM and the level of fees charged based, in part, on asset share class and fund type.

Changes in AUM are driven by the two main factors of net flows and the market return of the funds, which are heavily influenced by the return realized in the equity and bond markets.

Net flows are comprised of new sales less redemptions by mutual fund and ETF shareowners.

Financial results are highly correlated to the growth in assets under management since these funds generally earn fee income on a daily basis.

Financial results are highly correlated to the growth in AUM since these funds generally earn fee income on a daily basis.

The investment return, or yield, on invested assets is an important element of the Company’s earnings since insurance products are priced with the assumption that premiums received can be invested for a period of time before benefits, losses and loss adjustment expenses are paid.

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The primary investment objective for the Company is to maximize economic value, consistent with acceptable risk parameters, including the management of credit risk and interest rate sensitivity of invested assets, while generating sufficient net of tax income to meet policyholder and corporate obligations.

Investment strategies are developed

Investment strategies are developed based on a variety of factors including business needs, regulatory requirements and tax considerations.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

based on a variety of factors including business needs, regulatory requirements and tax considerations.

Operational transformation and cost reduction plan

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To achieve those expected savings, we expect to incur approximately $390 over the course of the program, with $316

expensed cumulatively through June 30, 2023, and expected expenses of $17 over the last six months of 2023 and $63 after 2023, with the expenses after 2023 consisting mostly of amortization of internal use software and capitalized real estate costs.

expensed cumulatively through September 30, 2023, and expected expenses of $8 over the last three months of 2023 and $66 after 2023, with the expenses after 2023 consisting mostly of amortization of internal use software and capitalized real estate costs.

Included in the estimated costs of $390, we expect to incur restructuring costs of approximately $130, including $36 of employee severance, $24 to retire certain IT applications, and $70 for consulting and lease termination expenses.

Restructuring costs are reported as a charge to net income but not in core earnings.

The following table presents Hartford Next program costs incurred, including restructuring costs, and expense savings relative to 2019 realized in the six months ended June 30, 2023 and expected annual costs and expense savings relative to 2019 for the full year in 2023.

The following table presents Hartford Next program costs incurred, including restructuring costs, and expense savings relative to 2019 realized in the nine months ended September 30, 2023 and expected annual costs and expense savings relative to 2019 for the full year in 2023.

Hartford Next Costs and Expense Savings

Six Months Ended June 30, 2023 Estimate for 2023

Nine Months Ended September 30, 2023 Estimate for 2023

Employee severance $ (5) $ (5)

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Management's Discussion and Analysis of Financial Condition and Results of Operations

SECOND QUARTER FINANCIAL HIGHLIGHTS

THIRD QUARTER FINANCIAL HIGHLIGHTS

Net Income Available to Common Stockholders Net Income Available to Common Stockholders per Diluted Share Book Value per Diluted Share

Ý Increased $311 or 93% Ý Increased $1.07 or 105% Ý Increased $1.83 or 4%

+ Lower net realized losses

+ Increase in net income available to common stockholders + Net income in excess of common stockholder dividends

+ The effect of higher premiums in P&C and Group Benefits

+ Increase in net income available to common stockholders + Net income in excess of common stockholder dividends

+ Higher net investment income

+ Reduction in outstanding shares due to share repurchases

+ An increase in AOCI, primarily driven by lower net unrealized losses on available for sale securities

- Higher P&C current accident year catastrophe losses

- Dilutive effect of share repurchases

+ Lower P&C current accident year catastrophe losses - An increase in net unrealized losses on AFS securities, recorded in AOCI

+ Lower net realized losses

- A higher current accident year loss ratio before catastrophes in Personal Lines

- A higher group life loss ratio

- Less favorable P&C prior accident year reserve development

Investment Yield, After Tax Property & Casualty Combined Ratio Group Benefits Net Income Margin

Þ Decreased 10 bps Ý Increased 4.8 points Ý Increased 0.3 points

- Lower returns on limited partnerships and other alternative investments

+ Higher current accident year catastrophe losses + Lower net realized losses

+ Higher fully insured ongoing premiums

+ A higher yield on fixed maturity securities due to an increased yield on variable-rate securities and reinvesting at higher rates + Higher personal automobile loss costs, driven by severity - Higher group life loss ratio

- Lower net investment income driven by lower income from limited partnerships

Ý Increased 60 bps Þ Improved 3.7 points Ý Increased 3.1 points

+ A higher yield on fixed maturity securities due to reinvesting at higher rates and an increased yield on variable-rate securities - Lower current accident year catastrophe losses + Effects of higher fully insured ongoing premiums, including a lower expense ratio

- A lower expense ratio primarily driven by higher earned premium and lower marketing spend in Personal Lines + Lower group life loss ratio

+ Lower group disability loss ratio primarily due to favorable long term disability claim recoveries

- Lower net non-catastrophe property losses in Commercial Lines

+ Higher personal automobile loss costs driven by severity + Lower net realized losses

+ A lower level of favorable prior accident year reserve development

- A slightly higher group disability loss ratio primarily due to higher paid family leave and short-term disability claim incidence

- A lower expense ratio primarily driven by higher earned premium and lower marketing spend in Personal Lines

Index to MD&A

4 unchanged sentences

Consolidated Results of Operations

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

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

2023 2022 Change 2023 2022 Change

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Net income available to common stockholders $ 645 $ 334 93 % $ 1,717 $ 1,211 42 %

Three months ended June 30, 2023 compared to the three months ended June 30, 2022

Three months ended September 30, 2023 compared to the three months ended September 30, 2022

Net income available to common stockholders increased by $311, primarily driven by:

• Lower net realized losses of $274, before tax, driven by a decline in value of equity securities in the 2022 period;

• In Group Benefits, the effect of higher fully insured ongoing premiums, including a lower expense ratio, partially offset by a higher group life loss ratio and lower net investment income;

• A loss on extinguishment of debt in the 2022 period.

These increases were partially offset by:

• A decrease in P&C underwriting gain of $151, before tax, driven by higher current accident year catastrophe losses, a higher current accident year loss and loss adjustment expense ("LAE") ratio before catastrophes in Personal Lines, and a lower level of favorable prior accident year reserve development, partially offset by the effect of earned premium growth, including a decrease in the expense ratio.

• An increase in P&C underwriting gain of $144, before tax, driven by lower current accident year catastrophe losses, the effect of earned premium growth, including a decrease in the expense ratio, and a lower current accident year loss and loss adjustment expense ("LAE") ratio before catastrophes in Commercial Lines, partially offset by a higher current accident year loss and LAE ratio before catastrophes in Personal Lines;

• Higher net investment income, driven by the impact of reinvesting at higher rates and a higher yield on variable-rate securities;

• Lower net realized losses of $76, before tax, driven by lower net losses on equity securities and on sales of fixed maturity securities in the 2023 period compared to the prior year, partially offset by losses on interest rate derivatives in the 2023 period;

• In Group Benefits, the effect of higher fully insured ongoing premiums, including a lower expense ratio, and lower group life and group disability loss ratios.

For a discussion of the Company's operating results by segment, see MD&A - Segment Operating Summaries.

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Earned Premiums

Earned premiums increased by $410, or 9%, primarily due to:

Earned premiums increased $400,or 8%, primarily due to:

• An increase in P&C reflecting a 9% increase in Commercial Lines and a 5% increase in Personal Lines.

– Contributing to the increase in Commercial Lines was an increase in new business across all lines of business, the effect of earned pricing increases, and the effect of higher insured exposures, principally in workers’ compensation as well as property lines.

– For Personal Lines, earned premium was up due to the effect of earned pricing increases, partially offset by non-renewals.

• An increase in Group Benefits earned premium of 7% due to increases in group life, group disability, and supplemental health product premiums, primarily driven by strong persistency and new business sales as well as an increase in exposure on existing accounts.

Fee income decreased, driven by lower daily average assets within Hartford Funds due to net outflows over the preceding twelve months, partially offset by an increase in equity market levels since the prior year period.

– Contributing to the increase in Commercial Lines was an increase in new business, the effect of earned pricing increases, and the effect of higher insured exposures, principally in workers’ compensation as well as property lines.

– For Personal Lines, earned premium was up primarily due to the effect of earned pricing increases, partially offset by non-renewals.

• An increase in Group Benefits earned premium of 8% due to increases in group disability, group life and supplemental health product premiums, primarily driven by strong persistency and new business sales as well as an increase in exposure on existing accounts.

Net Investment Income

Net investment income remained relatively flat primarily due to lower income from limited partnerships and other alternative investments, offset by the impact of a higher yield on variable-rate securities and reinvesting at higher rates.

The lower limited partnership and other alternative investment income was driven by income from sales of underlying real estate properties in the 2022 period and lower real estate fund valuations in the current year as compared to the prior year.

Net realized losses decreased primarily due to a decline in value of equity securities in the 2022 period driven by lower equity market levels.

Also included were fewer net losses on sales of fixed maturities in the 2023 period compared to the 2022 period, largely offset by losses on credit derivatives in the 2023 period due to credit spread tightening.

Net investment income increased primarily due to the impact of reinvesting at higher rates and a higher yield on variable-rate securities.

Net realized losses decreased primarily due to:

• Greater valuation declines on equity securities in the 2022 period compared to the 2023 period;

• Higher net losses on sales of fixed maturities in the 2022 period compared to the 2023 period.

These increases were partially offset by:

• Greater losses on interest rate derivatives in the 2023 period compared to the 2022 period, due to higher interest rates.

For further discussion of investment results, see MD&A - Investment Results, Net Realized Gains and MD&A - Investment Results, Net Investment Income.

6 unchanged sentences

• An increase in Property & Casualty of $86, which was attributable to:

– An increase in P&C current accident year ("CAY") loss and loss adjustment expenses before catastrophes of $272, before tax, primarily due to the effect of higher earned premiums in Commercial Lines and higher personal automobile claim severity.

– An increase in current accident year catastrophe losses of $103, before tax.

Catastrophe losses in the 2023 period included losses from tornado, wind and hail events across several regions of the United States, mainly in the South, Midwest and Mountain West.

Catastrophe losses in the 2022 period included losses from wind and hail events mostly concentrated in the South, Midwest, and Central Plains.

– An increase in P&C current accident year loss and loss adjustment expenses before catastrophes of $185, before tax, primarily due to the effect of higher earned premiums and, to a lesser extent, higher personal automobile claim severity.

– A decline in P&C net favorable prior accident year reserve development of $10, before tax.

Prior accident year reserve development in the 2023 period was a net favorable $39, before tax, primarily driven by decreases in reserves related to catastrophes and workers’ compensation, partly offset by increases in reserves for general liability, assumed reinsurance, and bond.

Prior accident year reserve development in the 2022 period was a net favorable $58, before tax, primarily driven by reserve decreases in workers' compensation, catastrophes and package business, partially offset by reserve increases in general liability and commercial automobile liability.

Prior accident year reserve development in the 2023 period was a net favorable $43, before tax, primarily driven by decreases in reserves related to workers’ compensation and package business, partly offset by an increase in reserves for general liability.

Prior accident year reserve development in the 2022 period was a net favorable $53, before tax, primarily driven by reserve decreases in workers' compensation, package business, and personal automobile, partially offset by reserve increases in commercial automobile liability.

For further discussion, see Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

– A partially offsetting decline in current accident year catastrophe losses of $109, before tax.

Catastrophe losses in the 2023 period included losses from tornado, wind and hail events across several regions of the United States and, to a lesser extent, losses from hurricanes and tropical storms in the Southeast and West Coast.

Catastrophe losses in the 2022 period primarily included losses from Hurricane Ian, as well as wind and hail events mostly concentrated in the Northern Plains, Midwest, South, and Mountain West.

Losses and LAE Incurred for Group Benefits

– An increase in Group Benefits of $112, before tax, primarily driven by the effect of an increase in earned premiums, as well as the impact of a higher group life loss ratio and a slightly higher group disability loss ratio.

The higher group life loss ratio was driven primarily by favorable prior quarter reserve development benefiting the 2022 period, as well as higher group life severity in the 2023 period.

The slight increase in the group disability loss ratio was driven by higher paid family leave and short-term disability claim incidence as compared to the prior year period, partially offset by favorable long-term disability claim incidence and recoveries.

Amortization of deferred policy acquisition costs increased from the prior year period driven by Commercial Lines, reflecting an increase in earned premiums across all commercial lines of business.

Insurance operating costs and other expenses were flat due to increases related to:

• An increase in Group Benefits of $50, before tax, primarily driven by the effect of an increase in earned premiums, partially offset by lower group life and group disability loss ratios.

The lower group life loss ratio was driven primarily by a lower level of mortality.

The decrease in the group disability loss ratio was largely due to favorable long-term disability claim recoveries, partially offset by higher incidence in paid family leave and short-term disability products.

Amortization of deferred policy acquisition costs increased from the prior year period driven by a $52 increase in Commercial Lines, reflecting an increase in earned premiums across all commercial lines of business.

Insurance operating costs and other expenses increased primarily due to:

• Technology investments made to improve customer and broker experience and data analytics to enhance underwriting and pricing capabilities;

• Increased expense from higher staffing costs and commissions in Commercial Lines and Group Benefits, partly in response to increased business volume, mostly offset by lower incentive compensation.

• Increased expense from higher staffing costs in Commercial Lines and Group Benefits, and higher commissions in Group Benefits, partly in response to increased business volume, partially offset by lower incentive compensation;

• A capital-based state tax expense covering several years recorded in Corporate for the 2023 period related to recently released guidance.

These increases were offset by:

• Lower variable expenses in Hartford Funds;

• Incremental savings from the Company’s Hartford Next operational transformation and cost reduction plan;

• Lower direct marketing costs in Personal Lines;

• A loss on extinguishment of debt in the 2022 period.

• Incremental savings from the Company’s Hartford Next operational transformation and cost reduction plan.

Income tax expense increased primarily due to an increase in income before tax.

For further discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

Income tax expense increased primarily due to an increase in income before tax.

For further discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.

Six months ended June 30, 2023 compared to the six months ended June 30, 2022

Nine months ended September 30, 2023 compared to the nine months ended September 30, 2022

Net income available to common stockholders increased by $506 primarily driven by:

• Lower net realized losses of $412, before tax, driven by a decline in value of equity securities in the 2022 period;

• In Group Benefits, an improved group life loss ratio driven by a lower level of mortality, the effect of higher fully insured ongoing premiums, including a lower expense ratio, and an improved group disability loss ratio, partially offset by lower net investment income;

• A lower level of interest expense on corporate debt in the 2023 period compared to the 2022 period and a loss on extinguishment of debt in the 2022 period.

• Lower net realized losses of $488, before tax, driven by lower net losses on equity securities and on sales of fixed maturities in the 2023 period compared to the 2022 period, partially offset by losses on interest rate derivatives and credit derivatives in the 2023 period;

• In Group Benefits, the effect of higher fully insured ongoing premiums, including a lower expense ratio, and improved group life and group disability loss ratios;

• Higher net investment income, driven by the impact of reinvesting at higher rates and a higher yield on variable-rate securities, partially offset by lower limited partnership and other alternative investment income.

These increases were partially offset by:

• A decrease in P&C underwriting gain of $308, before tax, driven by higher current accident year catastrophe losses, a higher current accident year loss and LAE ratio before catastrophes in Personal Lines, and a lower level of favorable prior accident year reserve development, partially offset by the effect of earned premium growth, including a lower expense ratio;

• A decrease in P&C underwriting gain of $164, before tax, driven by a higher current accident year loss and LAE ratio before catastrophes in Personal Lines, higher current accident year catastrophe losses, and a lower level of favorable prior accident year reserve development, partially offset by the effect of earned premium growth, including a lower expense ratio;

• In Hartford Funds, lower fee income net of variable expenses.

2 unchanged sentences

Earned premiums increased by $1,222, or 9%, primarily due to:

• An increase in P&C reflecting an 11% increase in Commercial Lines and a 4% increase in Personal Lines.

– Contributing to the increase in Commercial Lines was the effect of an increase in new business across lines of business, earned pricing increases, and higher insured exposures, principally in workers’ compensation.

• An increase in P&C reflecting a 10% increase in Commercial Lines and a 4% increase in Personal Lines.

– For Personal Lines, earned premium was up primarily due to the effect of earned pricing increases, partially offset by non-renewals.

• An increase in Group Benefits earned premium of 8% due to increases in group disability, group life and supplemental health product premiums, driven by strong persistency and new business sales as well as an increase in exposure on existing accounts.

Fee income decreased, driven by lower daily average assets within Hartford Funds due to net outflows over the preceding twelve months partly offset by an increase in equity market levels since the prior year period.

Net Investment Income

– For Personal Lines, earned premium was up due to the effect of earned pricing increases, partially offset by non-renewals.

Net investment income increased primarily due to the impact of reinvesting at higher rates and a higher yield on variable-rate securities.

This increase was partially offset by lower limited partnership and other alternative investment income driven by lower real estate fund valuations in the current year and income from sales of underlying real estate properties in the 2022 period.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

Net investment income increased slightly primarily due to the impact of a higher yield on variable-rate securities and reinvesting at higher rates.

This increase was largely offset by lower limited partnership and other alternative investment income driven by income from sales of underlying real estate properties in the 2022 period, lower real estate fund valuations in the current year as compared to the prior year, and an increase in private equity fund valuations in the 2022 period.

Net realized losses decreased primarily due to a decline in value of equity securities in the 2022 period driven by lower equity market levels.

Also included were fewer net losses on sales of fixed maturities in the 2023 period compared to the 2022 period, partially offset by losses on credit derivatives in the 2023 period due to credit spread tightening.

Net realized losses decreased primarily due to:

• A larger decline in value of equity securities in the 2022 period compared to the 2023 period;

• Fewer net losses on sales of fixed maturities in the 2023 period compared to the 2022 period.

The increases were partially offset by:

• Losses on interest rate derivatives in the 2023 period due to higher interest rates and credit derivatives in the 2023 period due to credit spread tightening.

For further discussion of investment results, see MD&A - Investment Results, Net Realized Gains and MD&A - Investment Results, Net Investment Income.

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Catastrophe losses in the 2023 period included losses from tornado, wind and hail events across several regions of the United States, and losses from winter storms along the East and West Coasts.

Catastrophe losses in the 2022 period included losses from tornado, wind and hail events in the South, Midwest and Central Plains, winter storms along the East Coast, and $27 of losses, net of reinsurance, related to the Ukraine conflict.

Catastrophe losses in the 2022 period included losses from Hurricane Ian, as well as from tornado, wind and hail events in the Northern Plains, Midwest, South, and Mountain West, and winter storms along the East Coast, and $27 of losses, net of reinsurance, related to the Ukraine conflict.

Losses and LAE Incurred for Group Benefits

– A decline in P&C net favorable prior accident year reserve development of $65, before tax.

Prior accident year reserve development in the 2023 period was a net favorable $39, before tax, primarily driven by decreases in reserves related to workers' compensation and catastrophes, offset by increases in reserves for general liability, Personal Lines automobile physical damage, assumed reinsurance, bond, and uncollectible reinsurance.

Prior accident year reserve development in the 2022 period was a net favorable $94, before tax, primarily driven by reserve decreases in workers' compensation, catastrophes, package business, and commercial property, partially offset by reserve increases in general liability, assumed reinsurance, and commercial automobile liability.

Prior accident year reserve development in the 2023 period was a net favorable $82, before tax, primarily driven by decreases in reserves related to workers' compensation and catastrophes, offset by increases in reserves for general liability, Personal Lines automobile physical damage, assumed reinsurance and bond.

Prior accident year reserve development in the 2022 period was a net favorable $147, before tax, primarily driven by reserve decreases in workers' compensation, package business, catastrophes, commercial property, and personal automobile, partially offset by reserve increases in general liability, commercial automobile liability, and assumed reinsurance.

For further discussion, see Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

• An increase in Group Benefits of $99, before tax, primarily driven by the effect of an increase in earned premiums and higher incidence on paid family leave products, partially offset by the impact of lower mortality levels and lower incidence and favorable recoveries in long-term disability.

– An increase in Group Benefits of $149, before tax, primarily driven by the effect of an increase in earned premiums and higher incidence on paid family leave and short-term disability products, partially offset by the impact of lower mortality levels and favorable recoveries in long-term disability.

Amortization of deferred policy acquisition costs increased from the prior year period driven by Commercial Lines, reflecting an increase in earned premiums across all commercial lines of business.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

Amortization of deferred policy acquisition costs increased from the prior year period driven by Commercial Lines, reflecting an increase in earned premiums across all commercial lines of business.

Insurance operating costs and other expenses increased slightly due to:

• Technology investments made to improve customer and broker experience and data analytics to enhance underwriting and pricing capabilities;

• Increased expense from higher staffing costs and commissions in Commercial Lines and Group Benefits partly in response to increased business volume, mostly offset by lower incentive compensation.

• Increased expense from higher staffing costs and commissions in Commercial Lines and Group Benefits partly in response to increased business volume, partially offset by lower incentive compensation.

These increases were offset by:

• Lower variable expenses in Hartford Funds;

• Incremental savings from the Company’s Hartford Next operational transformation and cost reduction plan;

• Lower direct marketing costs in Personal Lines;

• Loss on extinguishment of debt in the 2022 period.

• Lower variable expenses in Hartford Funds.

Interest Expense decreased primarily due to the Company redeeming $600 aggregate principal amount of junior subordinated debentures on April 15, 2022.

3 unchanged sentences

Composition of Invested Assets

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amount Percent Amount Percent

9 unchanged sentences

[1] Primarily consists of equity fund investments, overseas deposits, consolidated investment funds, and derivative instruments which are carried at fair value.

June 30, 2023 compared to December 31, 2022

September 30, 2023 compared to December 31, 2022

Total investments increased slightly primarily due to an increase in fixed maturities, AFS, at fair value and limited partnerships and other alternative investments, partially offset by a decrease in equity securities, at fair value and short-term investments.

Fixed maturities, AFS, at fair value increased primarily due to net additions of asset backed securities ("ABS") and corporate bonds and an increase in valuations as a result of tighter credit spreads.

Fixed maturities, AFS, at fair value increased primarily due to net additions of corporate bonds and asset backed securities ("ABS"), partially offset by a decrease in valuations as a result of higher interest rates.

Limited partnerships and other alternative investments increased primarily driven by additional investments.

Equity securities, at fair value decreased primarily due to sales of common stocks.

The remaining equity securities, at fair value is comprised of approximately 50% of preferred stock.

Short-term investments decreased primarily due to the Boy Scouts of America settlement paid on April 20, 2023.

As of September 30, 2023, equity securities, at fair value are comprised of approximately 50% preferred stocks.

Short-term investments decreased primarily due to the Boy Scouts of America ("BSA") settlement paid on April 20, 2023.

Index to MD&A

2 unchanged sentences

Net Investment 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

11 unchanged sentences

[3] Primarily includes changes in fair value of certain equity fund investments and income from derivatives that qualify for hedge accounting and are used to hedge fixed maturities.

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Total net investment income largely flat due to:

• Higher yield on variable-rate securities and the impact of reinvesting at higher rates;

• Largely offset by lower income from limited partnerships and other alternative investments driven by income from sales of underlying real estate properties in the 2022 period and lower real estate fund valuations.

In addition, the six month period of 2022 included valuation increases on private equity funds.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Total net investment income increased primarily due to the impact of reinvesting at higher rates and a higher yield on variable-rate securities.

In addition, for the nine month period, the increase was partially offset by lower limited partnership and other alternative investment income driven by lower real estate fund valuations in the current year and income from sales of underlying real estate properties in the 2022 period.

Annualized net investment income yield, excluding limited partnerships and other alternative investments, was up primarily due to a higher yield on variable-rate securities and higher reinvestment rates.

Average reinvestment rates, on fixed maturities and mortgage loans, excluding certain U.S.

Treasury securities, for the three and six months ended June 30, 2023 were 5.3% and 5.6%, respectively, which were above the average yield of sales and maturities of 4.1% and 4.1%, respectively.

Average reinvestment rates for the three and six months ended June 30, 2022, were 4.5% and 3.8%, respectively, which were above the average yield of sales and maturities of 3.6% and 3.3%, respectively.

Treasury securities, for

the three and nine months ended September 30, 2023 were 6.0% and 5.7%, respectively, which were above the average yield of sales and maturities of 4.5% and 4.2%, respectively.

Average reinvestment rates for the three and nine months ended September 30, 2022, were 4.9% and 4.1%, respectively, which were above the average yield of sales and maturities of 3.7% and 3.4%, respectively.

For the 2023 calendar year, we expect the annualized net investment income yield, excluding limited partnerships and other alternative investments, to be above the portfolio yield earned in 2022 due to the higher rate environment.

4 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

7 unchanged sentences

Net realized 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.

[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] See Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments within the Investment Portfolio Risks and Risk Management section of the MD&A.

[3] See ACL on Mortgage Loans within the Investment Portfolio Risks and Risk Management section of the MD&A.

[4] 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.

Three and six months ended June 30, 2023

[4] 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.

Three and nine months ended September 30, 2023

Gross gains and losses on sales were primarily due to sales of corporate securities and tax-exempt municipals, in addition to sales of U.S.

treasuries for duration and/or liquidity management.

Equity securities net gains were primarily driven by an increase in value due to higher equity market levels.

Other, net losses for the three and six month periods ended June 30, 2023 primarily included losses of $36 and $52, respectively, on credit derivatives primarily due to changes in valuation, and, losses of $9 and $16, respectively, on transactional foreign currency revaluation.

Also included for the six month period ended June 30, 2023 were losses of $11 on FVO securities due to changes in credit spreads and gains of $18 on interest rate derivatives driven by an increase in interest rates.

Three and six months ended June 30, 2022

Equity securities net losses for the three month period ended September 30, 2023 were primarily driven by a decline in value due to lower equity market levels.

Equity securities net gains for the nine month period ended September 30, 2023 were primarily driven by an increase in value due to higher equity market levels.

Other, net losses for the three and nine month periods ended September 30, 2023 primarily included losses of $71 and $53, respectively, on interest rate derivatives driven by an increase in interest rates and losses of $3 and $55, on credit derivatives primarily due to changes in valuations.

Also included for the three month period ended September 30, 2023 were gains of $16 on FVO securities due to changes in credit spreads and gains of $13 on transactional foreign currency revaluation.

Three and nine months ended September 30, 2022

Gross gains and losses on sales were primarily due to sales of U.S.

treasuries for duration management and to fund purchases of spread product, mortgage loans, and alternative investments.

treasuries, which were used to manage duration and liquidity, and to fund purchases of spread product, mortgage loans, and alternative investments.

Also included were sales of corporate securities and tax-exempt municipals and tender activity.

Equity securities net losses were primarily driven by a decline in value due to lower equity market levels.

Other, net gains and losses for the three and six month periods ended June 30, 2022 included gains of $15 and $21, respectively, on transactional foreign currency revaluation, and, losses of $20 and $23, respectively, on FVO securities due to credit spread widening.

Also included for the six month period ended June 30, 2022 were gains of $37 on interest rate derivatives driven by an increase in interest rates and $14 on the termination of commodity derivatives driven by an increase in the price of crude oil.

Other, net gains and losses for the three and nine month periods ended September 30, 2022 included gains of $16 and $37, respectively, on transactional foreign currency revaluation, losses of $3 and $26, respectively, on FVO securities due to credit spread widening, and losses of $6 and $13, respectively, due to impairments of limited partnerships and other alternative investments.

Also included for the three and nine month periods ended September 30, 2022 were losses of $17 and gains of $20, respectively, on interest rate derivatives and, for the nine month period, gains of $14 on the termination of commodity derivatives driven by an increase in the price of crude oil.

CRITICAL ACCOUNTING ESTIMATES

8 unchanged sentences

• contingencies relating to corporate litigation and regulatory matters.

In developing these estimates, management makes subjective and complex judgments that are inherently uncertain and subject to material change as facts and circumstances develop.

Although variability is inherent in these estimates, management believes the amounts provided are appropriate based upon the facts available upon compilation of the financial statements.

Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Condensed Consolidated Financial Statements.

The Company’s critical accounting estimates are discussed in Part II, Item 7 MD&A in the Company’s 2022 Form 10-K Annual

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

to assist with obtaining an understanding of the underlying accounting policies related to these estimates.

The following discussion updates certain of the Company’s critical accounting estimates as of June 30, 2023.

In developing these estimates, management makes subjective and complex judgments that are inherently uncertain and subject to material change as facts and circumstances develop.

Although variability is inherent in these estimates, management believes the amounts provided are appropriate based upon the facts available upon compilation of the financial statements.

The Company’s critical accounting estimates are discussed in Part II, Item 7 MD&A in the Company’s 2022 Form 10-K Annual Report.

In addition, 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 should be read in conjunction with this section to assist with obtaining an understanding of the underlying accounting policies related to these estimates.

The following discussion updates certain of the Company’s critical accounting estimates as of September 30, 2023.

| PROPERTY & CASUALTY INSURANCE PRODUCT RESERVES, NET OF REINSURANCE

P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as of June 30, 2023

P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as of September 30, 2023

Based on the results of the quarterly reserve review process, the Company determines the appropriate reserve adjustments, if any, to record.

10 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations

Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Six Months Ended June 30, 2023

Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Nine Months Ended September 30, 2023

Commercial Lines Personal

9 unchanged sentences

Current accident year catastrophes 376 219 — 595

Prior accident year development (" PYD ")

(61) 17 5 (39)

Prior accident year development (107) 18 7 (82)

Total provision for unpaid losses and loss adjustment expenses

14 unchanged sentences

Current Accident Year Catastrophe Losses, Net of Reinsurance

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Lines Personal

3 unchanged sentences

Winter storms (8) — (8) 68 15 83

Hurricanes and tropical storms 13 7 20 13 7 20

Wildfires 4 8 12 4 8 12

Other international 2 — 2 2 — 2

Catastrophes before assumed reinsurance 94 69 163 323 219 542

7 unchanged sentences

Unfavorable (Favorable) Prior Accident Year Development for the

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Commercial Lines Personal

7 unchanged sentences

Professional liability — — — —

Bond 12 — — 12

Assumed reinsurance 2 — — 2

8 unchanged sentences

Unfavorable (Favorable) Prior Accident Year Development for the

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Commercial Lines Personal

16 unchanged sentences

Total prior accident year development $ (107) $ 18 $ 7 $ (82)

[1] Other reserve re-estimates for the six months ended June 30, 2023 includes a $22 increase in personal automobile physical damage reserves.

[1] Other reserve re-estimates for the nine months ended September 30, 2023 includes a $22 increase in personal automobile physical damage reserves.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Six Months Ended June 30, 2022

Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Nine Months Ended September 30, 2022

Lines Personal

20 unchanged sentences

Current Accident Year Catastrophe Losses, Net of Reinsurance

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

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

Lines Total Commercial

1 unchanged sentence

Winter storms (2) — (2) 17 5 22

Hurricanes and tropical storms [1] 98 81 179 98 81 179

Wildfires — — — — 3 3

Ukraine conflict [2] — — — 23 — 23

Tropical Storms 2 — 2 2 — 2

Other international — — — 2 — 2

Catastrophes before assumed reinsurance 145 114 259 260 187 447

1 unchanged sentence

Total catastrophe losses $ 179 $ 114 $ 293 $ 327 $ 187 $ 514

[1] Total catastrophe losses resulting from the Ukraine conflict were $27, net of reinsurance, including $4 within global assumed reinsurance for the six months ended June 30, 2022, all in the first quarter.

[1] For the three and nine months ended September 30, 2022, included losses from Hurricane Ian of $214, net of reinsurance, including $35 of hurricane losses in the global assumed reinsurance business.

[2] Total catastrophe losses resulting from the Ukraine conflict were $27, net of reinsurance, including $4 within global assumed reinsurance for the nine months ended September 30, 2022, all in the first quarter.

[3] Catastrophe losses incurred on global assumed reinsurance business are not covered under the Company's aggregate property catastrophe treaty.

4 unchanged sentences

Unfavorable (Favorable) Prior Accident Year Development for the

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Commercial Lines Personal

7 unchanged sentences

Professional liability — — — —

Bond (4) — — (4)

Assumed Reinsurance — — — —

8 unchanged sentences

Unfavorable (Favorable) Prior Accident Year Development for the

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Commercial Lines Personal

23 unchanged sentences

Underwriting Summary

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

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

2023 2022 Change 2023 2022 Change

21 unchanged sentences

[2] For discussion of consolidated investment results, see MD&A - Investment Results.

[3] Includes integration costs in connection with the 2019 acquisition of Navigators Group.

[4] For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

Premium Measures

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

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

2023 2022 2023 2022

18 unchanged sentences

Underwriting Ratios

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

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

2023 2022 Change 2023 2022 Change

12 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Net income for the three and six months ended June 30, 2023 increased primarily due to lower net realized losses, partially offset by a lower underwriting gain.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Net income for the three months ended September 30, 2023 increased primarily due to a higher underwriting gain, higher net investment income and lower net realized losses.

Net income for the nine months ended September 30, 2023 increased primarily due to lower net realized losses, higher net investment income and, to a lesser extent, a higher underwriting gain.

For further discussion of investment results, see MD&A - Investment Results.

Underwriting Gain

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Underwriting gain for the three and six months ended June 30, 2023 decreased driven by higher current accident year catastrophes, lower favorable prior accident year development, and a higher current accident year loss and LAE ratio before catastrophes, partially offset by the effect of earned premium growth, including a lower expense ratio.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Underwriting gain for the three months ended September 30, 2023 increased driven by lower current accident year catastrophes, the effect of earned premium growth, and a lower current accident year loss and LAE ratio before catastrophes.

Underwriting gain for the nine months ended September 30, 2023 increased driven by the effect of earned premium growth, partially offset by lower favorable prior accident year development and higher current accident year catastrophes.

Expense ratio decreased in both periods driven by the impact of higher earned premium, lower incentive compensation and incremental savings from the Hartford Next program, partially offset by investments in technology and higher underwriter staffing costs.

3 unchanged sentences

Earned Premiums

[1]Other earned premiums of $13 and $13, for the three months ended June 30, 2022, and 2023, respectively, and $24 and $26 for the six months ended June 30, 2022 and 2023, respectively is included in the total.

[1]Other earned premiums of $12 and $14, for the three months ended September 30, 2022, and 2023, respectively, and $36 and $40 for the nine months ended September 30, 2022 and 2023, respectively is included in the total.

Written Premiums

[1] Other written premiums of $12 and $13 for the three months ended June 30, 2022, and 2023, respectively, and $24 and $26 for the six months ended June 30, 2022 and 2023 is included in the total.

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Earned premiums for the three and six month periods increased due to written premium increases over the prior 12 months, including the effect of higher insured exposures.

Written premiums f or the three and six month periods increased driven by double-digit growth across small commercial, middle & large commercial and global specialty.

• Small commercial written premium increased in both periods driven by double-digit new business growth, renewal written price increases in all lines and higher insured exposures.

Written premium grew in all lines of business, with the most significant growth in package business, workers' compensation and excess and surplus lines.

• Middle & large commercial written premium increased in both periods driven by double-digit new business growth, renewal written price increases in all lines, and higher insured exposures.

Written premium grew in nearly all lines across general industries, industry verticals and specialty markets.

[1] Other written premiums of $11 and $14 for the three months ended September 30, 2022, and 2023, respectively, and $35 and $40 for the nine months ended September 30, 2022 and 2023 is included in the total.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Earned premiums for the three and nine month periods increased due to written premium increases over the prior twelve months, including the effect of higher insured exposures.

Written premiums f or the three and nine month periods increased driven by growth across small commercial, middle & large commercial and global specialty.

• Small commercial written premium increased in both periods driven by double-digit new business growth, renewal written price increases and higher insured exposures.

Written premium grew in all lines of business, including package business, workers' compensation, auto and excess and surplus lines.

• Middle & large commercial written premium increased in both periods driven by renewal written price increases in all lines and higher insured exposures and, for the nine month period only, double-digit new business growth.

Written premium grew in nearly all lines across general industries and specialty markets and, for the nine month period only, industry verticals.

• Global specialty written premium increased in both periods driven by written price increases across almost all lines as well as an increase in gross new business.

Written premiums grew across most U.S.

and international lines, with the most significant growth in global reinsurance.

Renewal written price increases were recognized in nearly all lines in both the three and six month periods, with accelerating price increases across most lines other than workers' compensation and director's and officer's.

and international lines, with the most significant growth in global reinsurance and U.S.

Renewal written price increases were recognized in nearly all lines in both the three and nine month periods, with price increases across most lines other than workers' compensation and director's and officer's.

• In small commercial excluding workers' compensation, renewal written price increases were higher in 2023, with high-single digit price increases in package business and automobile and double-digit increases in excess and surplus lines.

Workers' compensation pricing moderated from 2022 but was slightly positive due to the effect of wage inflation largely offset by lower net rates.

Workers' compensation pricing moderated from 2022 due to lower net rates and wage inflation.

• In middle market, the Company recognized high single-digit to low double-digit price increases in most lines other than workers’ compensation, which was slightly positive due to the effect of wage inflation largely offset by lower net rates.

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Current Accident Year Loss and LAE Ratio before Catastrophes

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Current accident year loss and LAE ratio before catastrophes increased in the three month period due to a higher loss ratio in workers' compensation, and to a lesser extent, slightly elevated losses in a run-off line within the international book.

Current accident year loss and LAE ratio before catastrophes increased in the six month period principally driven by a higher loss ratio in workers' compensation, partially offset by a lower loss ratio in international.

The lower loss ratio in global specialty international was mostly driven by the effect on the prior year ratio of $11 before tax in reinstatement premium owed to reinsurers related to ceding Ukraine conflict losses and a large ocean marine loss from an oil spill off the coast of Peru, both of which occurred in the three months ended March 31, 2022.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Current accident year loss and LAE ratio before catastrophes decreased in the three month period principally due to lower net non-catastrophe property losses driven by middle & large commercial.

Current accident year loss and LAE ratio before catastrophes was flat in the nine month period as a higher loss ratio in workers' compensation was offset by lower net non-catastrophe property losses driven by middle & large commercial.

Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Current accident year catastrophe losses for the three and six months ended June 30, 2023 included losses from tornado, wind and hail events across several regions of the United States and, for the six month period, winter storms primarily on the East and West coasts.

Current accident year catastrophe losses for the three and six months ended June 30, 2022 included losses from tornado, wind and hail events primarily in the South, Midwest and Central Plains, and, for the six month period, winter storms along the East coast and $27 of losses, net of reinsurance, related to the Ukraine conflict.

Prior accident year development was net favorable for the three and six months ended June 30, 2023 and included reserve decreases for workers' compensation and catastrophes, partially offset by reserve increases for general liability, assumed reinsurance and bond.

Prior accident year development was net favorable for the three and six months ended June 30, 2022.

Reserve development in the 2022 periods included reserve decreases for workers' compensation, catastrophes, package business and commercial property, partially offset by reserve increases for automobile liability and, for the six month period, assumed reinsurance.

In the three and six month periods, an increase in reserves for general liability related to excess casualty and primary construction was largely offset by a reallocation of a portion of reserves for sexual molestation and sexual abuse claims from Commercial Lines to P&C Other Operations.

The reallocated reserves relate to excess liability policies written by a legal entity in P&C Other Operations for amounts owed to claimants under the agreement in principle reached with the Boy Scouts of America ("BSA") on sexual molestation and sexual abuse claims in third quarter 2021.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Current accident year catastrophe losses for the three months ended September 30, 2023 included losses from tornado, wind and hail events across several regions of the United States, and to a lesser extent, losses from hurricanes and tropical storms.

Current accident year catastrophe losses for the nine months ended September 30, 2023 included losses from tornado, wind and hail events across several regions of the United States, and losses from winter storms along the East and West coasts.

Current accident year catastrophe losses for the three and nine months ended September 30, 2022 included $133 for Hurricane Ian and losses from wind and hail events primarily in the Great Plains, Midwest, South and Mountain West.

Current accident year catastrophe losses for the nine months ended September 30, 2022 also included losses from winter storms along the East Coast and $27 of losses net of reinsurance, related to the Ukraine conflict.

Prior accident year development was net favorable for the three and nine months ended September 30, 2023 and included reserve decreases for workers' compensation, package business and, for the nine month period, catastrophes, partially offset by reserve increases for general liability and assumed reinsurance.

Prior accident year development was net favorable for the three and nine months ended September 30, 2022.

Reserve development in the 2022 periods included reserve decreases for workers' compensation, package business, catastrophes and, for the nine month period, commercial property and professional liability, partially offset by reserve increases for automobile liability and, for the nine month period, an increase in assumed reinsurance.

In the the nine month period ended September 30, 2022, an increase in reserves for general liability related to excess casualty and primary construction was largely offset by a reallocation of a portion of reserves for sexual molestation and sexual abuse claims from Commercial Lines to P&C Other Operations.

The reallocated reserves relate to excess liability policies written by a legal entity in P&C Other Operations for amounts owed to claimants under the agreement in principle reached with the BSA on sexual molestation and sexual abuse claims in third quarter 2021.

In total for the Company, there was no change in the liability for settlement amounts owed on BSA claims.

The six months ended June 30, 2022 also included reserve decreases for professional liability.

Index to MD&A

3 unchanged sentences

Underwriting Summary

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

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

2023 2022 Change 2023 2022 Change

6 unchanged sentences

Current accident year catastrophes [1] 69 114 (39 %) 219 187 17 %

Prior accident year development [1] (3) — NM 17 (3) NM

Prior accident year development [1] 1 (11) 109 % 18 (14) NM

Total losses and loss adjustment expenses 656 618 6 % 1,922 1,603 20 %

2 unchanged sentences

Amortization of other intangible assets 1 1 — % 2 2 — %

Underwriting gain (loss) (113) (13) NM (158) 56 NM

Underwriting loss (62) (72) 14 % (220) (16) NM

Net investment income [2] 47 31 52 % 119 99 20 %

6 unchanged sentences

[2] For discussion of consolidated investment results, see MD&A - Investment Results.

[3] Includes servicing revenues of $24 and $19 for the three months ended June 30, 2023 and 2022, respectively, and $43 and $36 for the six months ended June 30, 2023 and 2022, respectively.

Includes servicing expenses of $16 and $15 for the three months ended June 30, 2023 and 2022, respectively, and $30 and $28 for the six months ended June 30, 2023 and 2022, respectively.

[3] Includes servicing revenues of $21 and $20 for the three months ended September 30, 2023 and 2022, respectively, and $64 and $56 for the nine months ended September 30, 2023 and 2022, respectively.

Includes servicing expenses of $17 and $15 for the three months ended September 30, 2023 and 2022, respectively, and $47 and $43 for the nine months ended September 30, 2023 and 2022, respectively.

[4] For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.

Written and Earned Premiums

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

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

Written Premiums 2023 2022 Change 2023 2022 Change

10 unchanged sentences

Premium Measures

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

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

Premium Measures 2023 2022 2023 2022

15 unchanged sentences

Underwriting Ratios

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

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

Underwriting Ratios 2023 2022 Change 2023 2022 Change

9 unchanged sentences

Product Combined Ratios

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

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

2023 2022 Change 2023 2022 Change

7 unchanged sentences

Net Income (Loss)

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Net income changed to a net loss for both the three and six months ended June 30, 2022.

For the three month period, the change was largely driven by an increase in the underwriting loss, partially offset by a decrease in net realized losses.

For the six month period, the change was largely driven by a change from an underwriting gain to an underwriting loss, partially offset by a decrease in net realized losses and an increase in net investment income.

Underwriting Gain (Loss)

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Underwriting gain (loss) Underwriting loss increased in the three month period, and changed from a gain to a loss in the six month period, primarily due to higher current accident year losses before catastrophes in automobile and an increase in current accident year catastrophe losses, partially offset by a

decrease in direct marketing costs and an increase in earned premium due to renewal pricing increases.

In the six month period, a change to net unfavorable prior accident year reserve development also contributed.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Net loss in the three month period decreased, driven by an increase in net investment income, a decrease in the underwriting loss, and a decrease in net realized losses.

For the nine month period, net income changed to a net loss largely driven by an increase in the underwriting loss, partially offset by a decrease in net realized losses and an increase in net investment income.

Underwriting (Loss)

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Underwriting loss decreased in the three month period, largely driven by a decrease in current accident year catastrophe losses, a decrease in direct marketing costs and the effect of an increase in earned premium due to renewal pricing

increases, partially offset by higher current accident year losses before catastrophes in automobile and favorable prior accident year development in the 2022 period.

In the nine month period, underwriting loss increased, driven by higher current accident year losses before catastrophes in automobile, an increase in current accident year catastrophe losses and a change from favorable to unfavorable prior accident year development, partially offset by the effect of an increase in earned premium due to renewal written price increases and a decrease in direct marketing costs.

Expense ratio decreased in 2023 primarily due to lower direct marketing costs, and to a lesser extent, the impact of higher earned premium and Hartford Next savings.

1 unchanged sentence

Written Premiums

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Earned premiums increased in both the three and six month periods due to an increase in written premium over the prior twelve months in both automobile and in homeowners.

Written premiums increased in automobile in both the three and six month periods due to the effect of written pricing increases.

Written premiums increased in homeowners in both the three and six month periods primarily due to an increase in new business and the effect of written pricing increases.

Renewal written pricing increases were higher for both automobile and homeowners in the three and six month periods

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Earned premiums increased in both the three and nine month periods due to an increase in written premium over the prior twelve months in both automobile and in homeowners.

Written premiums increased in both the three and nine month periods due to the effect of written pricing increases in both automobile and homeowners.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

ended June 30, 2023 primarily in response to recent higher loss cost trends as well as higher insured values in homeowners.

Policy count retention for automobile was higher while, for homeowners, policy count retention was flat partly due to policyholder response to pricing increases.

Policies in-force decreased in 2023 for both automobile and for homeowners compared to the end of second quarter 2022, reflecting the level of new business in relation to non-renewed policies.

Renewal written pricing increases were higher for both automobile and homeowners in the three and nine month periods ended September 30, 2023 primarily in response to recent higher loss cost trends as well as higher insured values in homeowners.

Policy count retention was stable both for automobile and for homeowners for both the three month and the nine month periods.

Policies in-force decreased in 2023 for both automobile and for homeowners compared to the end of third quarter 2022, reflecting the level of new business in relation to non-renewed policies.

Current Accident Year Loss and LAE Ratio before Catastrophes

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Current accident year Loss and LAE ratio before catastrophes increased in both automobile and homeowners in both the three and six month periods.

The increase in automobile was primarily due to an increase in automobile liability and physical damage claim severity.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Current accident year Loss and LAE ratio before catastrophes increased in both automobile and homeowners in both the three and nine month periods.

The increase in automobile was primarily due to an increase in automobile liability and physical damage claim severity, as well as a higher level of frequency in the current period due to driving continuing to return to more normalized levels, partially offset by the impact of earned pricing increases.

The automobile severity increases include the inflationary effects on bodily injury claims and automobile parts and repairs.

Also impacting the change for automobile between years is a higher level of frequency in the current period due to driving continuing to return to more normalized levels, largely offset by the impact of earned pricing increases.

For homeowners, the increase in the current accident year loss and LAE ratio before catastrophes was due to an increase in severity and frequency for both weather and non-weather claims and an increase in claims settlement costs, partially offset by earned pricing increases.

For homeowners, the increase in the current accident year loss and LAE ratio before catastrophes was due to an increase in severity for both weather and non-weather claims, partially offset by earned pricing increases.

For the nine month period, an increase in frequency and an increase in claims settlement costs also contributed.

Contributing to the increase in homeowners severity was the effect of higher rebuilding costs due to inflation.

Current Accident Year Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Current accident year catastrophe losses increased in both the three and six month periods.

Current accident year catastrophe losses for 2023 included tornado, wind and hail events across several regions of the United States, and for the six month period, included losses from winter storms primarily on the East and West coasts.

Current accident year catastrophe losses for the three and six months ended June 30, 2022 included tornado, wind and hail events primarily in the South, Midwest and Central Plains and for the six month period, winter storms along the East Coast.

Prior accident year development was favorable in the three months ended June 30, 2023 period and unfavorable in the six month period.

Net favorable prior accident year development in the three month period was primarily driven by a reduction in prior accident year catastrophes.

Net unfavorable prior accident year development in the six month period was primarily driven by automobile physical damage.

Net favorable prior accident year development in the six months ended June 30, 2022 period was primarily driven by automobile liability.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Current accident year catastrophe losses decreased in the three month period and increased in the nine month period.

Current accident year catastrophe losses for three months ended September 30, 2023 included tornado, wind and hail events across several regions of the United States, and to a lessor extent, wildfire events and hurricanes and tropical storms.

The nine month period also included losses from winter storms primarily on the East and West coasts.

Current accident year catastrophe losses for the three and nine months ended September 30, 2022 included Hurricane Ian as well as wind and hail events primarily in the Northern Plains, Midwest, South, and Mountain West and, for the nine month period, winter storms along the East Coast.

Prior accident year development was an unfavorable $1 in the three months ended September 30, 2023.

Net unfavorable prior accident year development in the nine months ended September 30, 2023 was primarily driven by automobile physical damage.

Net favorable prior accident year development in the three and nine months ended September 30, 2022 period was primarily driven by automobile liability.

Index to MD&A

4 unchanged sentences

Underwriting Summary

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

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

2023 2022 Change 2023 2022 Change

Losses and loss adjustment expenses

Prior accident year development [1] $ 2 $ 30 (93 %) $ 5 $ 30 (83 %)

Total losses and loss adjustment expenses 2 30 (93 %) 5 30 (83 %)

Prior accident year development [1] $ 2 $ — NM $ 7 $ 30 (77 %)

Total losses and loss adjustment expenses 2 — NM 7 30 (77 %)

Underwriting expenses 3 2 50 % 8 7 14 %

9 unchanged sentences

Net income (loss)

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Net income (loss) changed to net income in the three and six months ended June 30, 2023 compared to net losses in the

comparable 2022 periods primarily due to decreases in underwriting losses and net realized losses.

Underwriting loss decreased in the three and six month periods due to lower unfavorable prior accident year reserve development in the 2023 periods.

Unfavorable prior accident reserve development in the 2022 periods was primarily due to reallocating a portion of general liability reserves from Commercial Lines to P&C Other Operations related to sexual molestation and sexual abuse claims.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Net income increased in the three months ended September 30, 2023 primarily due to an increase in net investment income

and a decrease in net realized losses, partially offset by an increase in underwriting loss.

Net income for the nine months ended September 30, 2023 compared with a net loss in the comparable 2022 period, primarily due to a decrease in underwriting loss and net realized losses, and an increase in net investment income.

Underwriting loss increased for the three months ended September 30, 2023 due to unfavorable prior accident year reserve development in the 2023 period related to uncollectible reinsurance.

Underwriting loss decreased for the nine months ended September 30, 2023 due to lower unfavorable prior accident year reserve development in the 2023 period.

Unfavorable prior accident reserve development in the nine months ended September 30, 2022 was primarily due to reallocating a portion of general liability reserves from Commercial Lines to P&C Other Operations related to sexual molestation and sexual abuse claims.

The reallocated reserves in 2022 related to excess liability policies written by a legal entity in P&C Other Operations for amounts owed to claimants under the agreement in principle reached with BSA on sexual molestation and sexual abuse claims in third quarter 2021.

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Asbestos and environmental reserve comprehensive annual reviews will occur in the fourth quarter of 2023.

For information on asbestos and environmental ("A&E") reserves, see MD&A - Critical Accounting Estimates, Asbestos and Environmental Reserves included in the Company's 2022 Form 10-K Annual Report.

For information on A&E reserves, see MD&A - Critical Accounting Estimates, Asbestos and Environmental Reserves included in the Company's 2022 Form 10-K Annual Report.

Index to MD&A

3 unchanged sentences

Operating Summary

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

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

2023 2022 Change 2023 2022 Change

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Premiums and Other Considerations

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

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

2023 2022 Change 2023 2022 Change

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Ratios, Excluding Buyouts

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

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

2023 2022 Change 2023 2022 Change

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group life and disability business are not included in the expense ratio.

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

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

2023 2022 Change 2023 2022 Change

8 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Net income increased in both the three and six months ended June 30, 2023 due to lower net realized losses in the 2023 period and the effect of higher fully insured ongoing premium, including a lower expense ratio, partially offset by a decrease in net investment income.

In addition, the three month period was impacted by a higher loss ratio in the 2023 period while the six month period benefitted from a lower loss ratio in the 2023 period.

Insurance operating costs and other expenses w ere higher for both the three and six month periods prim arily due to the effect of premium growth, including higher commissions and staffing costs, and investments in technology, partially offset by incremental expense savings from Hartford Next and lower incentive compensation.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Net income increased in both the three and nine months ended September 30, 2023 due to the effect of higher fully insured ongoing premium, including a lower expense ratio, a lower loss ratio, and lower net realized losses.

In addition, the nine month period was impacted by a decrease in net investment income.

Insurance operating costs and other expenses w ere higher for both the three and nine month periods prim arily due to the effect of premium growth, including higher commissions and staffing costs, partially offset by incremental expense savings from Hartford Next and lower incentive compensation.

The nine month period included increased investments in technology.

Fully Insured Ongoing Premiums

[1]Other of $90 and $102 for the three months ended June 30, 2022 and 2023 respectively, and $177 and $202 for the six months ended June 30, 2022 and 2023 respectively which includes other group coverages such as retiree health insurance, critical illness, accident and hospital indemnity coverages.

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Fully insured ongoing premiums increased in both the three and six month periods in group disability, life and other driven by strong persistency and new business sales as well as an increase in exposure on existing accounts.

Fully insured ongoing sales decreased for the three-month period due to lower large account sales.

For the six-month period, sales increased over prior year driven by group life sales.

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Total loss ratio increased 2.0 points in the three months ended June 30, 2023 compared to the prior year period reflecting higher group life and group disability loss ratios.

The group life loss ratio increased 5.5 points as the second quarter of 2022 benefitted from favorable development of $24, or 4.0 points, related to the prior quarter.

Additionally, the life loss ratio was adversely affected by higher severity in the current year as compared to the prior year.

The disability loss ratio increased 0.7 points largely due to higher incidence in paid family leave and short-term disability products, partially offset by favorable long-term disability claim incidence and recoveries.

Total loss ratio decreased 2.4 points in the six months ended June 30, 2023 compa red to the prior year period reflecting a lower group life and group disability loss ratio.

[1]Other of $88 and $102 for the three months ended September 30, 2022 and 2023 respectively, and $265 and $304 for the nine months ended September 30, 2022 and 2023 respectively, which includes other group coverages such as retiree health insurance, critical illness, accident and hospital indemnity coverages.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Fully insured ongoing premiums increased in both the three and nine month periods in group disability, life and other driven by strong persistency and new business sales as well as an increase in exposure on existing accounts.

Fully insured ongoing sales increased in both the three and nine month period.

For the three month period, the increase was driven by group disability sales and for the nine month period, the increase was driven by group life sales.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Total loss ratio decreased 2.6 points in the three months ended September 30, 2023 compared to the prior year period reflecting lower group life and group disability loss ratios.

The group life loss ratio decreased 2.9 points due to improved mortality trends.

The group disability loss ratio decreased 1.1 points largely due to favorable long-term disability claim recoveries, partially offset by higher incidence in paid family leave and short-term disability products.

Total loss ratio decreased 2.4 points in the nine months ended September 30, 2023 compa red to the prior year period reflecting lower group life and group disability loss ratios.

The group life loss ratio decreased 3.1 points driven by a lower level of mortality compared to the prior year period.

The group disability loss ratio decreased 1.1 points due to favorable long-term disability claim incidence and recoveries, partially offset by higher incidence in paid family leave and short-term disability products.

Expense ratio decreased in both the three and six month periods driven by the effect of higher earned premiums and incremental expense savings from Hartford Next, partially offset by higher staffing costs and investments in technology.

Expense ratio decreased in both the three and nine month periods driven by the effect of higher earned premiums, incremental expense savings from Hartford Next and lower incentive compensation, partially offset by higher staffing costs and, for the nine month period, increased investments in technology.

Index to MD&A

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Operating Summary

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

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

2023 2022 Change 2023 2022 Change

Fee income and other revenue $ 248 $ 253 (2 %) $ 733 $ 803 (9 %)

Net investment income 4 1 NM 7 2 NM

Net investment income 4 3 33 % 11 5 120 %

Net realized gains (losses) (4) (9) 56 % 2 (31) 106 %

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Hartford Funds Segment AUM

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

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

2023 2022 Change 2023 2022 Change

2 unchanged sentences

Redemptions - Mutual Fund (6,461) (8,059) 20 % (20,477) (28,046) 27 %

Net flows - ETF 210 (34) NM 277 109 154 %

Net flows - ETF 222 28 NM 499 137 NM

Net flows - Mutual Fund and ETF (1,629) (2,223) 27 % (4,064) (4,658) 13 %

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Mutual Fund and ETF AUM by Asset Class

As of June 30,

As of September 30,

2023 2022 Change

9 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Net income increased for the three and six month periods primarily driven by net realized gains in 2023 compared to net realized losses in 2022, partially offset by lower fee income net of variable expenses driven by a decrease in daily average assets under management.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Net income was unchanged for the three months ended September 30, 2023 as a decrease in net realized losses was offset by a decline in fee income net of variable expenses driven by lower daily average AUM.

Net income increased for the nine months ended September 30, 2023 primarily driven by net realized gains in 2023 compared to net realized losses in 2022, partially offset by a decrease in fee income net of variable expenses driven by a decrease in daily average AUM.

Hartford Funds AUM

June 30, 2023 compared to June 30, 2022

Hartford Funds AUM increased primarily due to an increase in market values over the previous twelve months, partly offset by net outflows.

Net outflows wer e $1.3 billion and $2.4 billion in the three and six months ended June 30, 2023, respectively, compared to net outflows of $2.0 billion and $2.4 billion for the three and six months ended June 30, 2022.

September 30, 2023 compared to September 30, 2022

Hartford Funds AUM increased primarily due to an increase in market values, partly offset by net outflows over the previous twelve months.

Net outflows wer e $1.6 billion and $4.1 billion in the three and nine months ended September 30, 2023, respectively, compared to net outflows of $2.2 billion and $4.7 billion for the three and nine months ended September 30, 2022.

| CORPORATE - RESULTS OF OPERATIONS

Operating Summary

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

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

2023 2022 Change 2023 2022 Change

Fee income [1] $ 10 $ 11 (9 %) $ 30 $ 37 (19 %)

Other revenue — — — % 1 1 — %

Net investment income 8 3 167 % 18 6 NM

Other revenue 1 — NM 2 1 100 %

Net investment income 12 7 71 % 30 13 131 %

Net realized gains (losses) (10) (10) — % 7 (56) 113 %

Total revenues (losses) 30 (14) NM 56 (13) NM

Total revenues (losses) 13 8 63 % 69 (5) NM

Benefits, losses and loss adjustment expenses [2] 1 1 — % 5 5 — %

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Net loss available to common stockholders

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Net loss available to common stockholders for the three and six months ended June 30, 2023 decreased primarily due to a change from net realized losses in the 2022 periods to net realized gains in the 2023 periods, higher net investment income, a loss on extinguishment of debt in the 2022 periods and lower interest expense, partially offset by lower fee income.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Net loss available to common stockholders increased for the three months ended September 30, 2023 primarily driven by a $14, before tax, capital-based state tax expense covering several years recorded in the 2023 period related to recently released guidance, partially offset by an increase in net investment income and lower restructuring costs.

Net loss available to common stockholders decreased for the nine months ended September 30, 2023 primarily due to a change from net realized losses in the 2022 period to net

realized gains in the 2023 period, higher net investment income, lower interest expense, a loss on extinguishment of debt in the 2022 period and lower restructuring costs, partially offset by a $14, before tax, capital-based state tax expense covering several years recorded in the 2023 period related to recently released guidance.

Interest expense

Three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022

Interest expense slightly decreased for the three and six months ended June 30, 2023, largely due to the redemption of $600 in 7.875% junior subordinated debentures in April, 2022.

Three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

Interest expense was flat for the three month period, and decreased for the nine month period due to the redemption of $600 in 7.875% junior subordinated debentures in April, 2022.

ENTERPRISE RISK MANAGEMENT

15 unchanged sentences

• Property- Risk of loss to personal or commercial property from automobile related accidents, weather, explosions, smoke, shaking, fire, theft, vandalism, inadequate installation, faulty equipment, collisions and falling objects, and/or machinery mechanical breakdown resulting in physical damage, losses from political violence and terrorism ("PV&T") and other covered perils.

• Liability- Risk of loss from automobile related accidents, uninsured and underinsured drivers, lawsuits from accidents, defective products, breach of warranty, negligent acts by professional practitioners, environmental claims, latent exposures, fraud, coercion, forgery, failure to fulfill obligations per contract surety, liability from errors and omissions, losses on credit and political risk insurance ("CPRI") coverages, losses from derivative lawsuits, and other securities actions and covered perils.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

("CPRI") coverages, losses from derivative lawsuits, and other securities actions and covered perils.

• Mortality- Risk of loss from unexpected trends in insured deaths impacting timing of payouts from group life insurance, personal or commercial automobile related accidents, and death of employees or executives during the course of employment, while on disability, or while collecting workers compensation benefits.

11 unchanged sentences

The Company has established underwriting guidelines for both individual risks, including individual policy limits, and risks in the aggregate, including aggregate exposure limits by geographic zone and peril.

The Company uses both internal and third-party models to estimate the potential loss resulting from various catastrophe events and the potential financial impact those

events would have on the Company's financial position and results of operations across its businesses.

The Company uses both internal and third-party models to estimate the potential loss resulting from various

catastrophe events and the potential financial impact those events would have on the Company's financial position and results of operations across its businesses.

The Hartford closely monitors scientific literature on climate change to help identify climate change risks impacting our business.

15 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations

Primary Catastrophe Treaty Reinsurance Coverages as of June 30, 2023 [1]

Primary Catastrophe Treaty Reinsurance Coverages as of September 30, 2023 [1]

Portion of losses reinsured Portion of losses retained by The Hartford

35 unchanged sentences

Financial risks include direct and indirect risks to the Company's financial objectives from events that impact financial market conditions and the value of financial assets.

Some events may

Some events may cause correlated movement in multiple risk factors.

The primary sources of financial risks are the Company's invested assets.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

cause correlated movement in multiple risk factors.

The primary sources of financial risks are the Company's invested assets.

Consistent with its risk appetite, the Company establishes financial risk limits to control potential loss on a U.S.

19 unchanged sentences

("HFSG Holding Company") have been and will continue to be met by the HFSG Holding Company's fixed maturities, short-term investments and cash, and dividends from its subsidiaries, principally from its insurance operations, as well as the issuance of common stock, debt or other capital securities and borrowings from its credit facilities, as needed.

The Company maintains multiple sources of contingent liquidity including a revolving credit facility, an intercompany liquidity agreement that allows for short-term advances of funds among

the HFSG Holding Company and certain affiliates, and access to collateralized advances from the Federal Home Loan Bank of Boston (" FHLBB ") for certain affiliates.

The Company maintains multiple sources of contingent liquidity including a revolving credit facility, an intercompany liquidity agreement that allows for short-term advances of funds among the HFSG Holding Company and certain affiliates, and access to collateralized advances from the Federal Home Loan Bank of

Boston (" FHLBB ") for certain affiliates.

The Company's CFO has primary responsibility for liquidity risk.

22 unchanged sentences

• Requiring collateral;

• Non-renewing policies/contracts or reinsurance treaties.

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

• Non-renewing policies/contracts or reinsurance treaties.

The Company has developed credit exposure thresholds which are based upon counterparty ratings.

1 unchanged sentence

Exposures are tracked on a current and potential basis and aggregated by ultimate parent of the counterparty across investments, reinsurance receivables, insurance products with credit risk, and derivatives.

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

As of September 30, 2023, the Company had no investment exposure to any credit concentration risk of a single issuer or counterparty greater than 10% of the Company’s stockholders' equity, other than the U.S.

government and certain U.S.

12 unchanged sentences

In accordance with industry standards and the contractual requirements, collateral is typically settled on the same business day.

For the six months ended June 30, 2023, the Company incurred no losses on derivative instruments due to counterparty default.

For the nine months ended September 30, 2023, the Company incurred no losses on derivative instruments due to counterparty default.

For further discussion, see the Derivative Commitments section of Note 14 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.

21 unchanged sentences

The Company analyzes interest rate risk using various models including parametric models and cash flow simulation under various market scenarios of the liabilities and their supporting investment portfolios.

Key metrics that the Company uses to quantify its exposure to interest rate risk inherent in its invested assets and the associated liabilities include duration, convexity and key rate duration.

Key metrics that the Company uses to quantify its exposure to interest rate risk

Index to MD&A

1 unchanged sentence

Management's Discussion and Analysis of Financial Condition and Results of Operations

inherent in its invested assets and the associated liabilities include duration, convexity and key rate duration.

The Company primarily utilizes interest rate swaps and, to a lesser extent, futures to mitigate interest rate risk associated with its investment portfolio or liabilities and to manage portfolio duration.

Equity risk is the risk of financial loss due to changes in the value of global equities or equity indices.

Sources of Equity Risk The Company has exposure to equity risk from invested assets, assets that support the Company’s pension and other postretirement benefit plans, and fee income derived from Hartford Funds assets under management.

Impact The investment portfolio is exposed to losses from market declines affecting equity securities and derivatives, which could negatively impact the Company's reported earnings.

4 unchanged sentences

and other equity markets.

Generally, declines in equity markets will reduce the value of average daily assets under management and the amount of fee income generated from those assets.

Generally, declines in equity markets will reduce the value of average daily AUM and the amount of fee income generated from those assets.

Increases in equity markets will generally have the inverse impact.

1 unchanged sentence

For assets supporting pension and other postretirement benefit plans, the asset allocation mix is reviewed on a periodic basis.

In order to minimize risk, the pension plans maintain a listing of permissible and prohibited investments and impose

concentration limits and investment quality requirements on permissible investment options.

In order to minimize risk, the pension plans maintain a listing of permissible and prohibited investments and impose concentration limits and investment quality requirements on permissible investment options.

Foreign Currency Exchange Risk

17 unchanged sentences

Fixed Maturities, AFS by Credit Quality

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value

6 unchanged sentences

Total fixed maturities, AFS $ 41,723 $ 37,962 100.0 % $ 39,533 $ 36,231 100.0 %

The fair value of fixed maturities, AFS increased as compared to December 31, 2022, primarily due to net additions of ABS and corporate bonds and an increase in valuations as a result of tighter credit spreads.

The fair value of fixed maturities, AFS increased as compared to December 31, 2022, primarily due to net additions of corporate bonds and ABS, partially offset by a decrease in valuations as a result of higher interest rates.

Fixed maturities, FVO are not included in the preceding table.

4 unchanged sentences

Fixed Maturities, AFS by Type

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amortized Cost ACL Gross Unrealized Gains Gross Unrealized Losses Fair Value Percent of Total Fair Value Amortized Cost ACL Gross Unrealized Gains Gross Unrealized Losses Fair Value Percent of Total Fair Value

29 unchanged sentences

[1] Includes securities with pools of loans issued by the Small Business Administration which are backed by the full faith and credit of the U.S.

The fair value of fixed maturities, AFS increased as compared with December 31, 2022, primarily due to net additions of ABS and corporate bonds and an increase in valuations as a result of tighter credit spreads.

The Company primarily increased holdings of consumer loans and financial services and basic industry corporate bonds, while primarily decreasing holdings of

treasuries and tax-exempt municipal bonds.

The fair value of fixed maturities, AFS increased as compared with December 31, 2022, primarily due to net additions of corporate bonds and ABS, partially offset by a decrease in valuations as a result of higher interest rates.

The Company primarily increased holdings of financial services, utilities, consumer non-cyclical, and basic industry corporate bonds and consumer loans, while primarily decreasing holdings of tax-

exempt municipal bonds and U.S.

Commercial & Residential Real Estate

3 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations

Exposure to CMBS & RMBS Bonds as of June 30, 2023

Exposure to CMBS & RMBS Bonds as of September 30, 2023

AAA AA A BBB BB and Below Total

22 unchanged sentences

[1] Includes securities with pools of loans issued by the Small Business Administration which are backed by the full faith and credit of the U.S.

As of September 30, 2023, the credit quality of agency-backed CMBS and RMBS changed from AAA to AA+ due to a downgrade of U.S.

government-sponsored enterprises by Fitch in August of 2023.

The Company also has exposure to commercial mortgage loans.

2 unchanged sentences

A loan participation interest represents a pro-rata share in interest and principal payments generated by the participated loan, and the relationship between the Company as loan originator, lead participant and servicer and the third party as a participant are governed by a participation agreement.

As of June 30, 2023, mortgage loans had an amortized cost of $6.1 billion and carrying value of $6.0 billion, with an ACL of $41.

As of December 31, 2022, mortgage loans had an amortized cost of $6.0 billion and carrying value of $6.0 billion, with an ACL of $36.

The increase in the allowance is primarily attributable to overall weaker projected real estate

fundamentals, and to a lesser extent, net additions of new loans.

The Company funded $304 of commercial mortgage loans with a weighted average loan-to-value (“ LTV ”) ratio of 58% and a weighted average yield of 6.8% during the six months ended June 30, 2023.

The Company continues to originate commercial mortgage loans in high growth markets across the country focusing primarily on institutional-quality industrial, multi-family, and retail properties with strong LTV ratios.

There were no mortgage loans held for sale as of June 30, 2023, or December 31, 2022.

As of September 30, 2023, mortgage loans had an amortized cost of $6.1 billion and carrying value of $6.0 billion, with an ACL of $46.

As of December 31, 2022, mortgage loans had an

amortized cost of $6.0 billion and carrying value of $6.0 billion, with an ACL of $36.

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

The Company funded $425 of commercial mortgage loans with a weighted average loan-to-value (“ LTV ”) ratio of 58% and a weighted average yield of 6.9% during the nine months ended September 30, 2023.

The Company continues to originate commercial mortgage loans in high growth markets across the country focusing primarily on institutional-quality industrial and multi-family properties with strong LTV ratios.

There were no mortgage loans held for sale as of September 30, 2023, or December 31, 2022.

Municipal Bonds

4 unchanged sentences

Available For Sale Investments in Municipal Bonds

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amortized Cost Fair Value Weighted Average Credit Quality Amortized Cost Fair Value Weighted Average Credit Quality

General Obligation $ 831 $ 771 AA $ 863 $ 838 AA

Pre-refunded [1] 187 191 AAA 235 242 AAA

Pre-refunded [1] 207 208 AA+ 235 242 AAA

Transportation 1,335 1,213 A+ 1,435 1,342 A+

14 unchanged sentences

Lease payments may be subject to annual appropriation by the municipality, or the municipality may be obligated to appropriate general tax revenues to make lease payments.

As of June 30, 2023, the largest issuer concentrations were the Grand Parkway Transportation Corporation of Texas, the New York City Transitional Finance Authority, and the Metropolitan Transportation Authority, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds.

As of September 30, 2023, the largest issuer concentrations were the Grand Parkway Transportation Corporation of Texas, the New York City Transitional Finance Authority, and the Metropolitan Transportation Authority, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds.

As of December 31, 2022, the largest issuer concentrations were the Grand Parkway Transportation Corporation of Texas, the New York City Transitional Finance Authority, and the New York City Municipal Water Finance Authority, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds.

5 unchanged sentences

Limited Partnerships and Other Alternative Investments - Net Investment 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

6 unchanged sentences

[1]Yields calculated using annualized net investment income divided by the monthly average invested assets.

[2]Consists of an insurer-owned life insurance policy which is primarily invested in private equity, fixed income, and hedge funds.

[2]Consists of an insurer-owned life insurance policy which is primarily invested in private equity funds and fixed income.

Index to MD&A

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Investments in Limited Partnerships and Other Alternative Investments

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Amount Percent Amount Percent

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$ 4,664 100.0 % $ 4,177 100.0 %

[1]Consists of an insurer-owned life insurance policy which is primarily invested in private equity, fixed income, and hedge funds.

[1]Consists of an insurer-owned life insurance policy which is primarily invested in private equity funds and fixed income.

Fixed Maturities, AFS — Unrealized Loss Aging

The total gross unrealized losses were $3.1 billion as of June 30, 2023, and have decreased $387 million from December 31, 2022, primarily due to an increase in valuations as a result of tighter credit spreads.

As of June 30, 2023, $2.4 billion of the gross unrealized losses were associated with fixed maturities, AFS depressed less than 20% of amortized cost.

The remaining $624 million of gross unrealized losses were associated with fixed maturities, AFS depressed greater than 20%.

The fixed maturities, AFS depressed more than 20% primarily related to corporate fixed maturities, RMBS, CMBS, and municipal bonds that are mainly depressed because current interest rates are higher and/or market spreads are wider than at the respective purchase dates.

The total gross unrealized losses were $3.8 billion as of September 30, 2023, and have increased $0.4 billion from December 31, 2022, primarily due to a decrease in valuations as a result of higher interest rates.

As of September 30, 2023, $2.5 billion of the gross unrealized losses were associated with fixed maturities, AFS depressed less than 20% of amortized cost.

The remaining $1.3 billion of gross unrealized losses were associated with fixed maturities, AFS depressed greater than 20%.

The fixed maturities, AFS depressed more than 20% primarily related to corporate fixed maturities, municipal bonds, RMBS, and CMBS that are mainly depressed because current interest rates are higher and/or market spreads are wider than at the respective purchase dates.

As part of the Company’s ongoing investment monitoring process, the Company has reviewed its fixed maturities, AFS in an unrealized loss position and concluded that these fixed maturities are temporarily depressed and are expected to recover in value as the investments approach maturity or as market spreads tighten.

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Unrealized Loss Aging for Fixed Maturities, AFS Securities

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Consecutive Months

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Unrealized Loss Aging for Fixed Maturities, AFS Continuously Depressed Over 20%

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Consecutive Months

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Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments

Three and six months ended June 30, 2023

For the three and six months ended June 30, 2023, the Company recorded net credit losses of $3 and $8, respectively.

The net credit losses were primarily attributable to new expected credit losses of $2 and $6, respectively, related to two below investment grade corporate issuers.

For the three and six months ended June 30, 2023, unrealized losses on securities with an ACL recognized in other comprehensive income were $0 and $4, respectively.

Three and nine months ended September 30, 2023

For the three and nine months ended September 30, 2023, the Company recorded net credit losses of $5 and $13, respectively.

The net credit losses were primarily attributable to increases in the ACL of $5 and $11, respectively, related to three below investment grade corporate issuers.

For the three and nine months ended September 30, 2023, unrealized losses on securities with an ACL recognized in other comprehensive income ("OCI") were $0 and $4, respectively.

For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

There were no intent-to-sell impairments in the three and six months ended June 30, 2023.

There were no intent-to-sell impairments in the three and nine months ended September 30, 2023.

The Company incorporates its best estimate of future performance using internal assumptions and judgments that are informed by economic and industry specific trends, as well as our expectations with respect to security specific developments.

Future intent-to-sell impairments or credit losses may develop as the result of changes in our intent to sell specific securities that are in an unrealized loss position or if modeling assumptions, such as macroeconomic factors or security specific developments, change unfavorably from our current modeling assumptions, resulting in lower cash flow expectations.

Three and six months ended June 30, 2022

Changes to the ACL for the three months ended June 30, 2022, were less than $1.

For the six months ended June 30, 2022, the Company recorded a net increase in the ACL of $12.

The increase was primarily attributable to new expected credit losses on four issuers with Russian exposure.

Unrealized losses on

securities with an ACL recognized in other comprehensive income were less than $1 for both the three and six months ended June 30, 2022.

Intent-to-sell impairments were $0 and $3 for the three and six months ended June 30, 2022, respectively, with impairments in the six month period related to one corporate issuer in the financial services sector.

Three and nine months ended September 30, 2022

For the three and nine months ended September 30, 2022, the Company recorded net credit losses of $3 and $15, respectively.

The net credit losses were primarily attributable to increases in the ACL of $6 and $7, respectively, on CMBS where projected cash flows are lower due to faster prepayments on underlying loans, and $2 and $4, respectively, related to a private corporate issuer.

The increases for both periods were partially offset by reversals of the ACL primarily on issuers with exposure to Russia, due to increases in fair market value and one issuer that has since been recognized as an intent-to-sell impairment.

Unrealized losses on securities with an ACL recognized in other comprehensive income were $6 for both the three and nine months ended September 30, 2022.

Intent-to-sell impairments were $2 and $5 for the three and nine months ended September 30, 2022, respectively, related to an issuer with exposure to Russia that had an ACL in prior periods and, for the nine month period, one corporate issuer in the financial services sector.

ACL on Mortgage Loans

Three and six months ended June 30, 2023

Three and nine months ended September 30, 2023

The Company reviews mortgage loans on a quarterly basis to estimate the ACL with changes in the ACL recorded in net realized gains and losses.

Apart from an ACL recorded on individual mortgage loans where the borrower is experiencing financial difficulties, the Company records an ACL on the pool of mortgage loans based on lifetime expected credit losses.

For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

For both the three and six months ended June 30, 2023, the Company recorded an increase in the ACL on mortgage loans of $5.

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

further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

For the three and nine months ended September 30, 2023, the Company recorded an increase in the ACL on mortgage loans of $5 and $10, respectively.

The increase in the allowance is primarily attributable to lower property valuations and overall weaker real estate fundamentals.

The Company did not record an ACL on any individual mortgage loans.

Three and six months ended June 30, 2022

For the three and six months ended June 30, 2022, the Company recorded an increase in the ACL on mortgage loans of $5 and $7, respectively.

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

Three and nine months ended September 30, 2022

For the three and nine months ended September 30, 2022, the Company recorded an increase in the ACL on mortgage loans of $0 and $7, respectively.

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

The Company did not record an ACL on any individual mortgage loans.

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| SUMMARY OF CAPITAL RESOURCES AND LIQUIDITY

Capital available to the holding company as of June 30, 2023:

• Approximately $900 in fixed maturities, short-term investments, investment sales receivable and cash at the HFSG Holding Company;

Capital available to the holding company as of September 30, 2023:

• Approximately $1.0 billion in fixed maturities, short-term investments, investment sales receivable and cash at the HFSG Holding Company;

• A senior unsecured revolving credit facility that provides for borrowing capacity up to $750 of unsecured credit through October 27, 2026.

As of June 30, 2023, there were no borrowings outstanding;

As of September 30, 2023, there were no borrowings outstanding;

• An intercompany liquidity agreement that allows for short-term advances of funds among the HFSG Holding Company and certain affiliates of up to $2.0 billion for liquidity and other general corporate purposes.

As of June 30, 2023, $1.9 billion was available, $100 was outstanding between certain affiliates and there were no amounts outstanding at the HFSG holding company.

Dividends and other sources of capital for the six months ended June 30, 2023:

As of September 30, 2023, $1.9 billion was available, $100 was outstanding between certain affiliates and there were no amounts outstanding at the HFSG holding company.

Dividends and other sources of capital for the nine months ended September 30, 2023:

The future payment of dividends from our subsidiaries is dependent on several factors including the business results, capital position and liquidity of our subsidiaries.

• P&C - HFSG Holding Company received $609 of net dividends from the Company's U.S.

property and casualty insurance subsidiaries through June 30, 2023;

• Group Benefits - HFSG Holding Company received $258 in dividends from Hartford Life and Accident Insurance Company (" HLA ") through June 30, 2023;

• Hartford Funds - HFSG Holding Company received $60 in dividends from Hartford Funds through June 30, 2023.

Expected liquidity requirements for the next twelve months as of June 30, 2023:

• P&C - HFSG Holding Company received $1.1 billion of net dividends from the Company's property and casualty insurance subsidiaries through September 30, 2023;

• Group Benefits - HFSG Holding Company received $333 in dividends from Hartford Life and Accident Insurance Company (" HLA ") through September 30, 2023;

• Hartford Funds - HFSG Holding Company received $93 in dividends from Hartford Funds through September 30, 2023.

Expected liquidity requirements for the next twelve months as of September 30, 2023:

• $194 of interest on debt.

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• $560 of common stockholders' dividends, subject to the discretion of the Board of Directors and before share repurchases.

Expected liquidity requirements for beyond the next twelve months as of June 30, 2023:

Expected liquidity requirements for beyond the next twelve months as of September 30, 2023:

• Interest on and repayments of debt.

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Equity repurchase program:

During the six months ended June 30, 2023, the Company repurchased 9.7 million common shares for $700 under the $3.0 billion share repurchase program authorized by the Board of Directors, effective through December 31, 2024.

As of June 30, 2023, the Company has $2.0 billion remaining for equity repurchases under the share repurchase program.

During the period July 1, 2023 through July 26, 2023, the Company repurchased approximately 1.4 million common shares for $101.

During the nine months ended September 30, 2023, the Company repurchased 14.6 million common shares for $1.05 billion under the $3.0 billion share repurchase program authorized by the Board of Directors, effective through December 31, 2024.

As of September 30, 2023, the Company has $1.7 billion remaining for equity repurchases under the share repurchase program.

During the period October 1, 2023 through October 25, 2023, the Company repurchased approximately 1.7 million common shares for $122.

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.

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The HFSG Holding Company expects to continue to receive dividends from its operating subsidiaries in the future and manages capital in its operating subsidiaries to be sufficient under significant economic stress scenarios.

Dividends from subsidiaries and other sources of funds at the holding company may be used to repurchase shares under the authorized share repurchase program at the discretion of management.

Dividends from subsidiaries and other sources of funds at the holding company

Index to MD&A

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Management's Discussion and Analysis of Financial Condition and Results of Operations

may be used to repurchase shares under the authorized share repurchase program at the discretion of management.

Under significant economic stress scenarios, the Company has the ability to meet short-term cash requirements, if needed, by borrowing under its revolving credit facility or by having its insurance subsidiaries take collateralized advances under a facility with the FHLBB.

The Company could also choose to have its insurance subsidiaries sell certain highly liquid, high quality fixed maturities or the Company could issue debt in the public markets under its shelf registration.

The Hartford's Board of Directors declared the following quarterly dividends since April 1, 2023:

The Hartford's Board of Directors declared the following quarterly dividends since July 1, 2023:

Common Stock Dividends

Declared Record Payable Amount per share

May 17, 2023 June 1, 2023 July 5, 2023 $ 0.425

July 19, 2023 September 1, 2023 October 3, 2023 $ 0.425

October 26, 2023 December 1, 2023 January 3, 2024 $ 0.470

Preferred Stock Dividends

Declared Record Payable Amount per share

May 17, 2023 August 1, 2023 August 15, 2023 $ 375.00

July 19, 2023 November 1, 2023 November 15, 2023 $375.00

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For a discussion of restrictions on dividends to HFSG Holding Company from its insurance subsidiaries see Part II, Item 7, MD&A – Capital Resources and Liquidity - Dividends from Subsidiaries in The Hartford’s 2022 Form 10-K Annual Report.

Through the first six months of 2023, HFSG Holding Company received $927 of net dividends from its subsidiaries, including $258 from HLA, $60 from Hartford Funds and $609 from its U.S.

P&C subsidiaries, excluding $50 of P&C dividends that were subsequently contributed to P&C subsidiaries and $25 of P&C dividends related to interest payments on an intercompany note owed by Hartford Holdings, Inc.

Through the first nine months of 2023, HFSG Holding Company received $1.5 billion of net dividends from its subsidiaries, including $333 from HLA, $93 from Hartford Funds and $1.1 billion from its P&C subsidiaries, excluding $75 of P&C dividends that were subsequently contributed to P&C subsidiaries and $37 of P&C dividends related to interest payments on an intercompany note owed by Hartford Holdings, Inc.

("HHI") to Hartford Fire Insurance Company.

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Shelf Registrations

The Hartford filed an automatic shelf registration statement with the Securities and Exchange Commission ("the SEC") on February 22, 2022 that permits it to offer and sell debt and equity securities during the three-year life of the registration statement.

The Hartford filed an automatic shelf registration statement with the Securities and Exchange Commission on February 22, 2022 that permits it to offer and sell debt and equity securities during the three-year life of the registration statement.

For further information regarding shelf registrations, Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2022 Form 10-K Annual Report.

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The Hartford has a senior unsecured revolving credit facility (the "Credit Facility") that provides up to $750 of unsecured credit through October 27, 2026.

As of June 30, 2023, no borrowings were outstanding and no letters of credit were issued under the Credit Facility and The Hartford was in compliance with all financial covenants.

As of September 30, 2023, no borrowings were outstanding and no letters of credit were issued under the Credit Facility and The Hartford was in compliance with all financial covenants.

For further information regarding the Credit Facility, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2022 Form 10-K Annual Report.

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The Connecticut Department of Insurance ("CTDOI") granted approval for certain affiliated insurance companies that are parties to the agreement to treat receivables from a parent, including the HFSG Holding Company, as admitted assets for statutory accounting purposes.

As of June 30, 2023, $1.9 billion was available, $100 was outstanding between certain affiliates, and there were no amounts outstanding at the HFSG Holding Company.

As of September 30, 2023, $1.9 billion was available, $100 was outstanding between certain affiliates, and there were no amounts outstanding at the HFSG Holding Company.

Collateralized Advances with Federal Home Loan Bank of Boston

The Company’s subsidiaries, Hartford Fire Insurance Company (“Hartford Fire”) and HLA, are members of the FHLBB.

Membership allows these subsidiaries access to collateralized advances, which may be short- or long-term with fixed or variable rates.

Advances may be used to support general

Membership allows these subsidiaries access to collateralized advances, which may be short- or long-term with fixed or

Index to MD&A

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Management's Discussion and Analysis of Financial Condition and Results of Operations

corporate purposes, which would be presented as short- or long-term debt, or to earn incremental investment income, which would be presented in other liabilities consistent with other collateralized financing transactions.

As of June 30, 2023, there were no advances outstanding.

variable rates.

Advances may be used to support general corporate purposes, which would be presented as short- or long-term debt, or to earn incremental investment income, which would be presented in other liabilities consistent with other collateralized financing transactions.

As of September 30, 2023, there were no advances outstanding.

For further information regarding collateralized advances with FHLBB, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2022 Form 10-K Annual Report.

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The Hartford has entered into a committed credit facility agreement with a syndicate of lenders (the "Club Facility").

The Club Facility has two tranches with one tranche extending a $74 commitment and the other tranche extending a £79 million ($100 as of June 30, 2023) commitment.

As of June 30, 2023, letters of credit with aggregate face amounts of $74 and £79 million ($100), respectively, were outstanding under the Club Facility.

The Club Facility has two tranches with one tranche extending a $74 commitment and the other tranche extending a £79 million ($96 as of September 30, 2023) commitment.

As of September 30, 2023, letters of credit with aggregate face amounts of $74 and £79 million ($96), respectively, were outstanding under the Club Facility.

Among other covenants, the Club Facility contains financial covenants regarding The Hartford's consolidated net worth and financial leverage and that limit the amount of letters of credit that can support Funds at Lloyd's, consistent with Lloyd's requirements.

As of June 30, 2023, The Hartford was in compliance with all financial covenants of the facility.

As of September 30, 2023, The Hartford was in compliance with all financial covenants of the facility.

For further information regarding the Club Facility, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2022 Form 10-K Annual Report.

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For further information, refer to Note 14 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.

As of June 30, 2023, no derivative positions would be subject to immediate termination in the event of a downgrade of one level below the current financial strength ratings.

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

As of September 30, 2023, no derivative positions would be subject to immediate termination in the event of a downgrade of one level below the current financial strength ratings.

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

| INSURANCE OPERATIONS

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Property & Casualty Operations

As of June 30, 2023

As of September 30, 2023

Fixed maturities $ 30,336

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Group Benefits

As of June 30, 2023

As of September 30, 2023

Fixed maturities $ 7,777

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The primary uses of funds are to pay claims, claim adjustment expenses, commissions and other underwriting and insurance operating costs, to pay taxes, to purchase new investments and to make dividend payments to the HFSG Holding Company.

Property & Casualty reserves for unpaid losses and loss adjustment expenses as of June 30, 2023 were $33.0 billion and net of reinsurance were $26.6 billion.

Reserves for Property & Casualty unpaid losses and loss adjustment expenses include

Property & Casualty reserves for unpaid losses and loss

Index to MD&A

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Management's Discussion and Analysis of Financial Condition and Results of Operations

case reserves and incurred but not reported (" IBNR" ) reserves.

adjustment expenses as of September 30, 2023 were $33.5 billion and net of reinsurance were $27.0 billion.

Reserves for Property & Casualty unpaid losses and loss adjustment expenses include case reserves and incurred but not reported (" IBNR" ) reserves.

The ultimate amount to be paid to settle both case and IBNR reserves is an estimate, subject to significant uncertainty.

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The timing of future payments for the next twelve months and for beyond twelve months could vary materially from historical payment patterns due to, among other things, changes in claim reporting and payment patterns and large unanticipated settlements.

In particular, there is significant uncertainty over the claim payment patterns of asbestos and environmental claims.

Group Benefits reserves as of June 30, 2023 were $8.9 billion and net of reinsurance were $8.7 billion.

In particular, there is significant uncertainty over the claim payment patterns of A&E claims.

Group Benefits reserves as of September 30, 2023 were $8.9 billion and net of reinsurance were $8.7 billion.

Group life and disability obligations are estimated using assumptions based on the Company’s historical experience, modified for recent observed trends.

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For historical payments by reserve line, net of reinsurance, see Note 11, Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements included in the Company's 2022 Form 10-K Annual Report.

Due to the significance of the assumptions used, payments for the next

twelve months and beyond twelve months could materially differ from historical patterns.

Corporate includes reserves of $409 as of June 30, 2023 related to retained run-off liabilities of its former life and annuity business.

significance of the assumptions used, payments for the next twelve months and beyond twelve months could materially differ from historical patterns.

Corporate includes reserves of $397 as of September 30, 2023 related to retained run-off liabilities of its former life and annuity business.

For additional information about future policy benefits and other policyholder funds and benefits payable, see Note 10, Reserve for Future Policy Benefits and Note 11, Other Policyholder Funds and Benefits Payable of Notes to Condensed Consolidated Financial Statements.

Hartford Funds

Hartford Funds' principal sources of operating funds are fees earned from basis points on assets under management with uses primarily for payments to subadvisors and other general operating expenses.

As of June 30, 2023, Hartford Funds cash and short-term investments were $239.

Hartford Funds' principal sources of operating funds are fees earned from basis points on AUM with uses primarily for payments to subadvisors and other general operating expenses.

As of September 30, 2023, Hartford Funds cash and short-term investments were $253.

| PURCHASE AND OTHER OBLIGATIONS

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Capital Structure

June 30, 2023 December 31, 2022 Change

September 30, 2023 December 31, 2022 Change

Long-term debt $ 4,361 $ 4,357 — %

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Debt to capitalization 24 % 24 %

Total capitalization increased $479 as of June 30, 2023 compared to December 31, 2022 primarily due to net income in excess of common stockholder dividends in the period and a

decrease in net unrealized losses on fixed maturities, AFS, partially offset by share repurchases.

For additional information on AOCI, net of tax, including net unrealized gain (losses) from securities, see Note 16 - Changes

Total capitalization increased $7 as of September 30, 2023 compared to December 31, 2022 primarily due to net income in excess of common stockholder dividends in the period, mostly

offset by share repurchases and a increase in net unrealized losses on fixed maturities, AFS.

Index to MD&A

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Management's Discussion and Analysis of Financial Condition and Results of Operations

In and Reclassifications From Accumulated Other Comprehensive Income (Loss) and Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

For additional information on debt, see Note 13 - Debt of Notes to

Condensed Consolidated Financial Statements and Note 13 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2022 Form 10-K Annual Report.

Six Months Ended June 30,

For additional information on AOCI, net of tax, including net unrealized gain (losses) from securities, see Note 16 - Changes In and Reclassifications From Accumulated Other Comprehensive Income (Loss) and Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.

additional information on debt, see Note 13 - Debt of Notes to Condensed Consolidated Financial Statements and Note 13 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2022 Form 10-K Annual Report.

Nine Months Ended September 30,

Net cash provided by operating activities $ 2,593 $ 2,924

Net cash provided by investing activities $ 53 $ 387

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

Net cash used for financing activities $ (1,493) $ (2,253)

Cash and restricted cash– end of period $ 181 $ 285

Cash provided by operating activities decreased in 2023 as compared to the prior year period primarily driven by an increase in P&C loss and loss adjustment expenses paid, including the $787 million payment to the BSA on April 20, 2023, higher taxes paid, and higher operating expenses, including increased commissions and staffing costs, partially offset by an increase in P&C and Group Benefits premiums received and lower Group Benefits loss and loss adjustment expenses paid.

Cash provided by investing activities decreased in 2023 as a result of a change from net proceeds from to net payments for fixed maturities, a decrease in proceeds from short term investments, and a change from net proceeds from to net payments for derivatives, partially offset by a change from net payments for to net proceeds from equity securities, and a decrease in net payments for mortgage loans.

Cash provided by operating activities decreased in 2023 as compared to the prior year period primarily driven by an increase in P&C loss and loss adjustment expenses paid, including the $787 million payment to the BSA on April 20, 2023, higher operating expenses, including increased commissions and staffing costs, a decrease in partnership cash distributions and higher taxes paid, partially offset by an increase in P&C and Group Benefits premiums received and lower Group Benefits loss and loss adjustment expenses paid.

Cash used for investing activities increased in 2023 as a result of an increase in net payments for fixed maturities, a decrease in proceeds from short term investments, and a change from net proceeds from to net payments for derivatives, partially offset by a change from net payments to net proceeds from equity securities, a decrease in net payments for mortgage loans, and a decrease in net payments for partnerships.

Cash used for financing activities decreased primarily due to the redemption of $600 of 7.875% junior subordinated debentures in the second quarter of 2022, and a decrease in share repurchases in 2023.

Operating cash flows for the six months ended June 30, 2023 has been adequate to meet liquidity requirements.

Operating cash flows for the nine months ended September 30, 2023 has been adequate to meet liquidity requirements.

| EQUITY MARKETS

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Insurance Financial Strength Ratings as of

July 26, 2023

October 25, 2023

Best Standard & Poor’s Moody’s

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statutory capital 163 57 220

U.S statutory capital at June 30, 2023

U.S statutory capital at September 30, 2023

$ 12,274 $ 2,628 $ 14,902

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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 2. Management’s Discussion and Analysis