What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-07-25 compared with 2024-04-25 · 512 added, 373 removed, 1368 unchanged (39% of the section changed)

7 unchanged sentences

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

Certain reclassifications have been made to historical financial information presented in Management's Discussion and Analysis of Financial Condition and Results of Operations (" MD&A ") to conform to the current period presentation.

The Hartford defines increases or decreases greater than or equal to 200%, or changes from a net gain to a net loss position, or vice versa, as “NM” or not meaningful.

14 unchanged sentences

Impact of New Accounting Standards

Throughout the MD&A, we use certain terms and abbreviations, the more commonly used are summarized in the Acronyms section.

Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), we use certain terms and abbreviations, the more commonly used are summarized in the Acronyms section.

KEY PERFORMANCE MEASURES AND RATIOS

44 unchanged sentences

Reconciliation of Net Income to Core Earnings

Three Months Ended March 31,

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

2024 2023 2024 2023

Net income $ 738 $ 547 $ 1,491 $ 1,082

2 unchanged sentences

Adjustments to reconcile net income available to common stockholders to core earnings:

Net realized losses (gains) excluded from core earnings, before tax (30) 7

Net realized losses excluded from core earnings, before tax 58 53 28 60

Restructuring and other costs, before tax — 3 1 3

3 unchanged sentences

Core earnings $ 750 $ 588 $ 1,459 $ 1,124

[1]During the three months ended March 31, 2024, the Company began collecting recoveries from National Indemnity Company ("NICO”), a subsidiary of Berkshire Hathaway Inc.

related to the Navigators adverse development cover ("Navigators ADC") and as a result amortized $24 of the deferred gain within benefits, losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations .

[1] During 2024, the Company collected recoveries from National Indemnity Company ("NICO”), a subsidiary of Berkshire Hathaway Inc.

related to the Navigators adverse development cover ("Navigators ADC") and as a result amortized $37 and $61 of the deferred gain within benefits, losses and loss adjustment expenses in the three and six month periods, respectively.

For additional information regarding the ADC reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

16 unchanged sentences

Expense Ratio- For Commercial Lines and Personal Lines is the ratio of underwriting expenses less fee income, to earned premiums.

Underwriting expenses include the amortization of deferred policy acquisition costs ("DAC") and insurance

operating costs and other expenses, including certain centralized services costs and bad debt expense.

Underwriting expenses include the amortization of

deferred policy acquisition costs ("DAC") and insurance operating costs and other expenses, including certain centralized services costs and bad debt expense.

DAC includes commissions, taxes, licenses and fees and other incremental direct underwriting expenses and are amortized over the policy term.

80 unchanged sentences

Reconciliation of Net Income to Underwriting Gain (Loss)

Three Months Ended March 31,

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

2024 2023 2024 2023

Commercial Lines

2 unchanged sentences

Net investment income (402) (364) (793) (702)

Net realized losses (gains) (12) 19

Net realized losses 50 51 38 70

Other expense 1 — 3 —

5 unchanged sentences

Net investment income (50) (34) (100) (72)

Net realized losses (gains) (1) 1

Net realized losses 8 5 7 6

Net servicing and other income (6) (7) (10) (13)

3 unchanged sentences

Net income $ 11 $ 9 $ 19 $ 15

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

Adjustments to reconcile net income to underwriting loss:

Net investment income (19) (17) (37) (33)

51 unchanged sentences

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

FIRST QUARTER FINANCIAL HIGHLIGHTS

SECOND 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 $191 or 35% Ý Increased $0.71 or 41% Ý Increased $2.00 or 4%

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

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

+ Reduction in outstanding shares due to share repurchases

- Dilutive effect of share repurchases

+ Favorable prior accident year development in the 2024 period

- A decrease in AOCI, primarily driven by an increase in net unrealized losses on AFS securities

+ A change to net realized gains from net realized losses

+ Lower catastrophe losses in P&C

+ Improved group life and group disability loss ratios

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

+ Higher favorable prior accident year development

+ Reduction in outstanding shares due to share repurchases - Dilutive effect of share repurchases

+ Higher net investment income

- Impact of an increase in net unrealized losses on AFS securities in AOCI

+ Improved current accident year loss and LAE ratio before catastrophes in P&C

+ Improved group life loss ratio

- Higher catastrophe losses in P&C

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

Ý Increased 20 bps Þ Improved 2.6 points Ý Increased 2.7 points

+ A higher yield on fixed maturity securities due to reinvesting at higher rates and an increased yield on variable-rate securities - Favorable prior accident year development in the 2024 period + Lower group life and group disability loss ratios

- Lower catastrophe losses

+ The effect of higher fully insured ongoing premiums

- Lower returns on limited partnerships and other alternative investments - A lower expense ratio, primarily driven by higher earned premium

+ Higher net investment income

- A higher expense ratio

- Lower net realized gains

+ A higher yield on fixed maturity securities due to reinvesting at higher rates and an increased yield on variable-rate securities - Improved current accident year loss and LAE ratio before catastrophes

+ Improved group life loss ratio

- Higher favorable prior accident year development + The effect of higher fully insured ongoing

- Lower returns on limited partnerships and other alternative investments

+ Higher catastrophe losses

+ Lower net realized losses

Index to MD&A

4 unchanged sentences

Consolidated Results of Operations

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Earned premiums $ 5,578 $ 5,220 7 % $ 11,024 $ 10,283 7 %

1 unchanged sentence

Net investment income 602 540 11 % 1,195 1,055 13 %

Net realized gains (losses) 28 (7) NM

Net realized losses (59) (64) 8 % (31) (71) 56 %

Other revenues 26 25 4 % 45 45 — %

5 unchanged sentences

Amortization of other intangible assets 17 17 — % 35 35 — %

Restructuring and other costs 1 — NM

Restructuring and other costs — 3 (100 %) 1 3 (67) %

Total benefits, losses and expenses 5,574 5,377 4 % 11,082 10,634 4 %

4 unchanged sentences

Net income available to common stockholders $ 733 $ 542 35 % $ 1,481 $ 1,072 38 %

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Three months ended June 30, 2024 compared to the three months ended June 30, 2023

Net income available to common stockholders increased by $191, primarily driven by:

• An increase in P&C underwriting gain of $128, before tax, driven by the effect of earned premium growth, including a lower expense ratio, favorable prior accident year reserve development, and lower current accident year catastrophe losses;

• Higher net investment income of $78, before tax, primarily driven by a higher yield on fixed maturities and a higher level of invested assets, partially offset by lower income from limited partnerships and other alternative investments;

• A $35, before tax, change to net realized gains in the 2024 period from net realized losses in the prior year period;

• In Group Benefits, improved group life and group disability loss ratios and the effect of higher fully insured ongoing premiums, partially offset by a higher expense ratio.

• An increase in P&C underwriting gain of $117, before tax, driven by the effect of earned premium growth, a higher level of favorable prior accident year reserve development, and a lower CAY loss and LAE ratio before catastrophes in both Personal Lines and Commercial Lines, partially offset by higher current accident year catastrophes;

• Higher net investment income of $62, before tax, primarily driven by a higher level of invested assets and a higher yield on fixed maturities, partially offset by lower income from limited partnerships and other alternative investments;

• In Group Benefits, improved group life loss ratio driven by lower claim severity experience and the effect of higher fully insured ongoing premiums.

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

4 unchanged sentences

Earned premiums increased $358 primarily due to:

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

• An increase in P&C reflecting a 8% increase in Commercial Lines and an 12% increase in Personal Lines.

– Contributing to the increase in Commercial Lines was the effect of an increase in new business across all lines of business, earned pricing increases, and higher insured exposures, principally in workers’ compensation and 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 2%, including an increase in exposure on existing accounts, new business sales, and lower persistency compared to the prior year period.

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

• An increase in Group Benefits earned premium of 2%, including an increase in exposure on existing accounts, new business sales, and persistency in excess of 90%, though slightly below the prior year periods.

Fee income increased primarily due to a $9 increase in Hartford Funds driven by higher daily average assets resulting from an increase in equity market levels, partially offset by net outflows over the preceding twelve months.

Net Investment Income

Net investment income increased primarily due to the impact of reinvesting at higher interest rates, a higher level of invested assets, and a higher yield on variable-rate securities, partially offset by a lower level of income on limited partnerships and other alternative investments.

Net realized gains (losses) changed to a gain in the 2024 period from a loss in the 2023 period primarily due to:

• Fewer net losses on sales of fixed maturities in the 2024 period;

• Appreciation in value of fixed maturities, at fair value using the fair value option ("FVO securities") in the 2024 period compared to depreciation in the 2023 period due to changes in credit spreads.

Net investment income increased primarily due to a higher level of invested assets, the impact of reinvesting at higher interest rates, and a higher yield on variable-rate securities, partially offset by a lower level of income on limited partnerships and other alternative investments.

Net realized losses improved slightly primarily due to no losses on credit derivatives in the 2024 period compared to losses in the 2023 period and gains on transactional foreign currency revaluation in the 2024 period compared to losses in the 2023 period.

These increases were mostly offset by higher net losses on sales of fixed maturities in the 2024 period compared to the 2023 period.

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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• An increase in Property & Casualty of $109 which was attributable to:

– An increase in P&C CAY loss and loss adjustment expenses before catastrophes of $215, before tax, primarily due to the effect of higher earned premiums in all P&C lines of business;

– An increase in P&C CAY loss and loss adjustment expenses before catastrophes of $131, before tax, primarily due to the effect of higher earned premiums, partially offset by a lower CAY loss and LAE ratio in both Commercial Lines and Personal Lines;

– An increase in current accident year catastrophe losses of $54, before tax.

Catastrophe losses in the 2024 period included losses from tornado, wind and hail events across several regions, but concentrated in the South and Midwest regions.

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.

Partially offset by:

– A decrease in current accident year catastrophe losses of $24, before tax.

Catastrophe losses in the 2024 period included losses from tornado, wind and hail, mainly in the Midwest, South and mid-Atlantic regions, as well as winter storms, primarily in the Northeast, Pacific and South regions.

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

– Net favorable prior accident year reserve development of $56, before tax, in P&C compared to no net prior accident year reserve development in the 2023 period.

Favorable prior year reserve development in the 2024 period was primarily driven by decreases in reserves related to workers' compensation and Personal Lines automobile physical damage, partially offset by increases in reserves for general liability, assumed reinsurance, and marine.

– Net favorable prior accident year reserve development of $115, before tax, in P&C compared $39 in the prior year period.

Favorable prior year reserve development in the 2024 period was primarily driven by decreases in reserves related to workers' compensation, catastrophes, bond, Personal Lines automobile liability, and homeowners, partially offset by increases in reserves for general liability, assumed reinsurance, and Commercial Lines automobile liability.

The 2024 period also included a benefit of $37 related to amortization of the Navigators ADC deferred gain.

For the 2023 period, prior year reserve development primarily included a decrease in reserves related to workers’ compensation and package business, offset by increases in reserves for Personal Lines automobile physical damage,

Prior accident year reserve development for the 2023 period was 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.

Losses and LAE Incurred for Group Benefits

general liability, and uncollectible reinsurance.

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

• A decrease in Group Benefits of $6, before tax, primarily driven by the impact of lower mortality levels and favorable long-term disability claim recoveries, partially offset by the effect of an increase in earned premiums and higher incidence on paid family leave and short-term disability products.

• A decrease in Group Benefits of $28, before tax, primarily driven by the impact of a lower group life loss ratio and a higher New York paid family leave risk adjustment benefit, partially offset by the effect of higher earned premiums and a higher loss ratio on paid family and medical leave products.

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 due to:

• Increased expense from higher staffing costs and commissions in Commercial Lines and Group Benefits, partly in response to increased business volume;

• Higher direct marketing costs in Personal Lines as marketing resumed at normalized levels;

• Investments in technology to support business growth and innovation initiatives.

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

• Higher direct marketing costs in Personal Lines.

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

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

Six months ended June 30, 2024 compared to the six months ended June 30, 2023

Net income available to common stockholders increased by $409 primarily driven by:

• An increase in P&C underwriting gain of $245, before tax, driven by the effect of earned premium growth, including a lower expense ratio, a higher level of favorable prior accident year reserve development, and lower CAY loss and LAE ratio before catastrophes in both Personal Lines and Commercial Lines, partially offset by higher current accident year catastrophe losses;

• Higher net investment income of $140, before tax, primarily driven by a higher level of invested assets and a higher yield on fixed maturities, partially offset by lower income from limited partnerships and other alternative investments;

• Lower net realized losses of $40, before tax;

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

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

Earned Premiums

Earned premiums increased by $741, or 7%, primarily due to:

• An increase in P&C reflecting a 9% increase in Commercial Lines and a 11% increase in Personal Lines.

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

Net Investment Income

Fee income increased, primarily due to an $18 increase in Hartford Funds driven by higher daily average assets resulting from an increase in equity market levels, partially offset by net outflows over the preceding twelve months.

Net realized losses improved primarily due to no losses on credit derivatives in the 2024 period compared to the 2023 period and gains on transaction foreign currency revaluation in the 2024 period compared to losses in the 2023 period.

These increases were partially offset by higher net losses on sales of fixed maturities in the 2024 period compared to the 2023 period.

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

Index to MD&A

Part I - Item 2.

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

BENEFITS, LOSSES AND EXPENSES

Losses and LAE Incurred for P&C

Benefits, losses and loss adjustment expenses increased $210, due to:

• An increase in Property & Casualty of $244, which was attributable to:

– An increase in P&C CAY loss and loss adjustment expenses before catastrophes of $346, before tax, primarily due to the effect of higher earned premiums, partially offset by a lower CAY loss and LAE ratio, in Commercial Lines and Personal Lines;

– An increase in current accident year catastrophe losses of $30, before tax.

Catastrophe losses in the 2024 period included losses from tornado, wind and hail events across several regions, but concentrated in the South and Midwest regions, and, to a lesser extent, from winter storms, mainly in the Northeast, Pacific and South regions.

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.

Losses and LAE Incurred for Group Benefits

Partially offset by:

– Net favorable prior accident year reserve development of $171, before tax, in P&C compared to net favorable prior accident year reserve development in the 2023 period of $39.

The 2024 period also included a benefit of $61 related to amortization of the Navigators ADC deferred gain.

Favorable prior year reserve development in the 2023 period was 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.

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

• A decrease in Group Benefits of $34, before tax, primarily driven by the impact of a lower group life loss ratio, favorable long-term disability claim recoveries and incidence, and a higher New York paid family leave risk adjustment benefit, partially offset by the effect of higher earned premiums and a higher loss ratio on paid family and medical leave products.

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

Part I - Item 2.

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

Insurance operating costs and other expenses increased due to:

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

• Higher direct marketing costs in Personal Lines.

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.

INVESTMENT RESULTS

Composition of Invested Assets

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Amount Percent Amount Percent

Fixed maturities, AFS, at fair value $ 40,814 71.8 % $ 39,818 71.2 %

FVO securities 292 0.5 % 327 0.6 %

Fixed maturities, at fair value using the fair value option ("FVO Securities") 272 0.5 % 327 0.6 %

Equity securities, at fair value 591 1.0 % 864 1.5 %

6 unchanged sentences

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

March 31, 2024 compared to December 31, 2023

Total investments increased slightly primarily due to an increase in fixed maturities, AFS, at fair value, partially offset by a decrease in short-term investments.

Fixed maturities, AFS, at fair value increased primarily due to net additions of corporate bonds, partially offset by a decrease in valuations due to higher interest rates, net of tighter credit spreads.

Short-term investments decreased primarily due to reallocation into fixed maturities, AFS.

June 30, 2024 compared to December 31, 2023

Total investments increased primarily due to an increase in fixed maturities, AFS, at fair value.

Fixed maturities, AFS, at fair value increased primarily due to net additions of corporate bonds and securitized products, partially offset by net reductions to tax-exempt municipal bonds and U.S.

treasuries, as well as an overall decrease in valuations due to higher interest rates.

Net Investment Income

Three Months Ended March 31,

(Before tax) Amount Yield [1] Amount Yield [1]

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

2024 2023 2024 2023

(Before tax) Amount Yield [1] Amount Yield [1] Amount Yield [1] Amount Yield [1]

Fixed maturities [2] $ 537 4.6 % $ 460 4.2 % $ 1,063 4.5 % $ 905 4.1 %

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[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 months ended March 31, 2024 compared to the three months ended March 31, 2023

Total net investment income increased primarily due to the impact of reinvesting at higher rates, a higher level of invested assets, and a higher yield on variable-rate securities, partially offset by lower income from limited partnerships and other alternative investments.

Annualized net investment income yield, excluding limited partnerships and other alternative investments, was up

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

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

Treasury securities, for the three months ended March 31, 2024 was 6.1% which was above the average yield of sales and maturities of 5.0% for the same period.

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

Treasury securities, for the three months ended March 31, 2023 was 5.8% which was above the average yield of sales and maturities of 4.2% for the same period.

Index to MD&A

1 unchanged sentence

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

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Total net investment income increased primarily due to a higher level of invested assets, the impact of reinvesting at higher rates, and a higher yield on variable-rate securities, partially offset by lower income from limited partnerships and other alternative investments.

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

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

Treasury securities, for

the three and six months ended June 30, 2024 were 6.4% and 6.2%, respectively, which were above the average yield of sales and maturities of 4.9% and 4.9%, respectively.

Average reinvestment rates 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.

For the 2024 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 2023 due to the higher rate environment.

estimated impact on annualized net investment income yield is subject to variability including the impact of evolving market conditions.

The estimated impact on annualized net investment income yield is subject to variability including the impact of evolving market conditions.

Net Realized Gains (Losses)

Three Months Ended March 31,

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

(Before tax) 2024 2023 2024 2023

5 unchanged sentences

Other, net [4] (3) (48) (6) (63)

Net realized gains (losses) $ 28 $ (7)

[1] The change in net unrealized gains (losses) on equity securities still held as of the end of the period and included in net realized gains (losses) were $36 and $2 for the three months ended March 31, 2024, and 2023, respectively.

Net realized losses $ (59) $ (64) $ (31) $ (71)

[1] The change in net unrealized gains (losses) on equity securities still held as of June 30, 2024 and included in net realized gains (losses) were $15 and $44 for the three and six months ended June 30, 2024, respectively.

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.

[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 months ended March 31, 2024, and 2023 includes gains (losses) from transactional foreign currency revaluation of $2 and $(7), respectively, and gains (losses) on non-qualifying derivatives of $(2) and $5, respectively.

Three months ended March 31, 2024

Gross gains and losses on sales were primarily due to sales of corporate securities and tax-exempt municipals.

[4] For the three and six months ended June 30, 2024, includes gains (losses) from transactional foreign currency revaluation of $4 and $6, respectively, and gains (losses) on non-qualifying derivatives of $(6) and $(8), respectively.

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.

Three and six months ended June 30, 2024

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

treasuries, corporate securities, and tax-exempt municipals to fund purchases of higher-yielding investments.

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

Other, net losses include losses of $5 on equity derivatives due to higher equity market levels and $1 on impairments of limited partnerships and other alternative investments.

Also included are gains of $4 on FVO securities due to appreciation in value and $3 on interest rate derivatives driven by changes in interest rates.

Three months ended March 31, 2023

Other, net losses for the three and six month periods ended June 30, 2024 primarily included losses of $6 and $3, respectively, on interest rate derivatives driven by changes in interest rates, and gains of $4 and $6, respectively, on transactional foreign currency revaluation.

Also included for the six month period ended June 30, 2024 were losses of $5 on equity derivatives due to higher equity market levels.

Three and six months ended June 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 repositioning and appreciation in value due to higher equity market levels.

Other, net losses were primarily due to $16 on credit derivatives and $8 on FVO securities due to changes in credit spreads, as well as, $7 on transactional foreign currency revaluation.

These losses were partially offset by gains of $21 on interest rate derivatives driven by changes in interest rates.

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.

Index to MD&A

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In addition, - Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in the Company's 2023 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 March 31, 2024.

The following discussion updates certain of the Company’s critical accounting estimates as of June 30, 2024.

| PROPERTY & CASUALTY INSURANCE PRODUCT RESERVES, NET OF REINSURANCE

P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as of March 31, 2024

P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as of June 30, 2024

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 Three Months Ended March 31, 2024

Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Six Months Ended June 30, 2024

Commercial Lines Personal

25 unchanged sentences

Prior accident year development (pts) [3]

[1] Prior accident year development for the three months ended March 31, 2024 includes a $24 benefit for amortization of a deferred gain under retroactive reinsurance accounting related to the Navigators ADC as the Company began collecting recoveries of the ceded losses from NICO during the period.

[1] Prior accident year development for the six months ended June 30, 2024 includes a $61 benefit for amortization of a deferred gain under retroactive reinsurance accounting related to the Navigators ADC as the Company began collecting recoveries of the ceded losses from NICO during the period.

For additional information regarding the Navigators ADC reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

Current Accident Year Catastrophe Losses, Net of Reinsurance

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

Lines Personal

Lines Total [1] Commercial

Lines Personal

Wind and hail $ 130 $ 115 $ 245 $ 172 $ 153 $ 325

Winter storms 3 — 3 55 14 69

Wildfires 1 10 11 1 10 11

Other international 4 — 4 4 — 4

Catastrophes before assumed reinsurance 138 125 263 232 177 409

7 unchanged sentences

Unfavorable (Favorable) Prior Accident Year Development for the

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Commercial Lines Personal

7 unchanged sentences

Professional liability (2) — — (2)

Bond (22) — — (22)

Assumed reinsurance 15 — — 15

10 unchanged sentences

$ (81) $ (34) $ — $ (115)

[1] The $24 change in deferred gain on retroactive reinsurance for the three months ended March 31, 2024, related to amortization of the Navigators ADC deferred gain under retroactive reinsurance accounting.

[1] Other reserve re-estimates, net for the three months ended June 30, 2024 includes a $7 decrease in personal lines automobile physical damage reserves.

[2] The $37 change in deferred gain on retroactive reinsurance for the three months ended June 30, 2024, is related to amortization of the Navigators ADC deferred gain under retroactive reinsurance accounting.

Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Three Months Ended March 31, 2023

Index to MD&A

Part I - Item 2.

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

Unfavorable (Favorable) Prior Accident Year Development for the

Six Months Ended June 30, 2024

Commercial Lines Personal

Lines Property & Casualty Other Operations Total Property & Casualty Insurance

Workers’ compensation $ (119) $ — $ — $ (119)

Workers’ compensation discount accretion 23 — — 23

General liability 49 — — 49

Marine (1) — — (1)

Package business (1) — — (1)

Commercial property (5) — — (5)

Professional liability (7) — — (7)

Bond (22) — — (22)

Assumed reinsurance 24 — — 24

Automobile liability 10 (13) — (3)

Homeowners — (10) — (10)

Net A&E reserves — — — —

Catastrophes (33) (5) — (38)

Uncollectible reinsurance (7) — 7 —

Other reserve re-estimates, net [1] 13 (13) — —

Prior accident year development before change in deferred gain (76) (41) 7 (110)

Change in deferred gain on retroactive reinsurance included in other liabilities [2] (61) — — (61)

Total prior accident year development $ (137) $ (41) $ 7 $ (171)

[1] Other reserve re-estimates, net for the six months ended June 30, 2024 includes a $14 decrease in personal lines automobile physical damage reserves.

[2] The $61 change in deferred gain on retroactive reinsurance for the six months ended June 30, 2024 is related to amortization of the Navigators ADC deferred gain under retroactive reinsurance accounting.

Index to MD&A

Part I - Item 2.

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

Lines Personal

19 unchanged sentences

[2] “Prior accident year development (pts)” represents the ratio of prior accident year development to earned premiums.

Index to MD&A

Part I - Item 2.

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

Current Accident Year Catastrophe Losses, Net of Reinsurance

Three Months Ended March 31, 2023

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

Lines Total Commercial

Wind and hail $ 110 $ 102 $ 212 $ 153 $ 135 $ 288

5 unchanged sentences

For further information on the treaty, refer to Enterprise Risk Management — Insurance Risk section of this MD&A.

Index to MD&A

Part I - Item 2.

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

Unfavorable (Favorable) Prior Accident Year Development for the

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Commercial Lines Personal

7 unchanged sentences

Professional liability (3) — — (3)

Bond 12 — — 12

Assumed reinsurance 15 — — 15

7 unchanged sentences

$ (38) $ (3) $ 2 $ (39)

[1] Other reserve re-estimates, net for the three months ended March 31, 2023 includes a $20 increase in personal automobile physical damage reserves.

Unfavorable (Favorable) Prior Accident Year Development for the

Six Months Ended June 30, 2023

Commercial Lines Personal

Property & Casualty Other Operations Total Property & Casualty Insurance

Workers’ compensation $ (113) $ — $ — $ (113)

Workers’ compensation discount accretion 22 — — 22

General liability 28 — — 28

Marine (1) — — (1)

Package business (8) — — (8)

Commercial property — — — —

Professional liability (3) — — (3)

Bond 12 — — 12

Assumed reinsurance 17 — — 17

Automobile liability 6 — — 6

Homeowners — 1 — 1

Net A&E reserves — — — —

Catastrophes (40) (4) — (44)

Uncollectible reinsurance 9 — 3 12

Other reserve re-estimates, net [1] 10 20 2 32

Total prior accident year development $ (61) $ 17 $ 5 $ (39)

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

For discussion of the factors contributing to unfavorable (favorable) prior accident year reserve development for both the 2024 and 2023 periods, please refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

5 unchanged sentences

Underwriting Summary

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Written premiums $ 3,540 $ 3,177 11 % $ 6,902 $ 6,286 10 %

13 unchanged sentences

Net investment income [2] 402 364 10 % 793 702 13 %

Net realized gains (losses) [2] 12 (19) NM

Other income (expense) [3] (2) — NM

Net realized losses [2] (50) (51) 2 % (38) (70) 46 %

Other income (expense) [3] (1) — NM (3) — NM

Income before income taxes 670 567 18 % 1,372 1,088 26 %

9 unchanged sentences

Premium Measures

Three Months Ended March 31,

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

2024 2023 2024 2023

Small Commercial:

17 unchanged sentences

Underwriting Ratios

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Loss and loss adjustment expense ratio

11 unchanged sentences

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

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income increased primarily due to a higher underwriting gain, higher net investment income, and a change to net realized gains in the current year period from net realized losses in the prior year period.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net income for the three and six months ended June 30, 2024 increased primarily due to a higher underwriting gain, higher net investment income, and, for the six month period, lower net realized losses.

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

Underwriting Gain

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Underwriting gain increased by the effect of earned premium growth, higher favorable prior accident year development, including $24 of a benefit for amortization of a deferred gain on the Navigators ADC, and lower current accident year catastrophe losses.

Expense ratio decreased driven by the impact of higher earned premium, partially offset by higher underwriting staffing costs and, to a lesser extent, investments in technology.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Underwriting gain for the three and six months ended June 30, 2024 increased due to the effect of earned premium growth, higher favorable prior accident year development, including $37 and $61 of a benefit for amortization of a deferred gain on the Navigators ADC for the three and six month periods, respectively, and a lower CAY loss and LAE ratio before catastrophes, partially offset by higher current accident year catastrophe losses.

Expense ratio for the three and six months ended June 30, 2024 decreased driven by the impact of higher earned premium, partially offset by higher underwriting staffing costs, including higher incentive compensation, and increased commissions.

Index to MD&A

2 unchanged sentences

Earned Premiums

[1]Other earned premiums of $13 and $15, for the three months ended March 31, 2023, and 2024, respectively.

[1] Other earned premiums of $13 and $14, for the three months ended June 30, 2023, and 2024, respectively and $26 and $29 , for the six months ended June 30, 2023, and 2024, respectively.

Written Premiums

[1] Other written premiums of $13 and $14 for the three months ended March 31, 2023, and 2024, respectively.

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Earned premiums increased due to written premium increases over the prior twelve months, including the effect of higher insured exposures.

Written premiums increased driven by growth across small commercial, middle & large commercial and global specialty.

• Small commercial written premium increased 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, excess and surplus, automobile and workers' compensation.

[1] Other written premiums of $13 and $14 for the three months ended June 30, 2023, and 2024, respectively and $26 and $28 for the six months ended June 30, 2023 and 2024, respectively.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Earned premiums for the three and six months ended June 30, 2024 increased due to written premium increases over the prior twelve months, including the effect of higher insured exposures, principally in workers’ compensation and property lines.

Written premiums for the three and six months ended June 30, 2024 increased driven by growth across small commercial, middle & large commercial and global specialty.

• Small commercial written premium increased 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 of business, including package business, excess and surplus and automobile.

• Middle & large commercial written premium increased 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 large property.

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

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

1 unchanged sentence

lines, global reinsurance and international lines.

Renewal written price increases were recognized in nearly all lines, with price increases across most lines other than directors and officers ("D&O").

• In small commercial, renewal written price increases were higher in 2024, with low-double digit price increases in package business and automobile and mid double-digit increases in excess and surplus lines.

Renewal written price increases were recognized in nearly all lines in both the three and six month periods, with price increases across most lines other than directors and officers ("D&O").

• In small commercial, renewal written price increases were higher in 2024, with double-digit price increases in package business, automobile and excess and surplus lines.

Workers' compensation pricing was slightly positive, but moderated from 2023 due to lower net rates and lower 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 positive due to the effect of wage inflation offset by lower net rates.

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

• In global specialty, U.S.

price increases were higher than prior year levels and we achieved mid single-digit renewal written price increases overall, with the high-single to low double-digit increases in property, marine and casualty lines.

price increases were higher than prior year levels and we achieved mid single-digit renewal written price increases overall, with high single to low double-digit increases in marine, casualty and auto lines.

D&O pricing continues to be negative, but to a lesser extent than the prior year.

3 unchanged sentences

Current Accident Year Loss and LAE Ratio before Catastrophes

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Current accident year loss and LAE ratio before catastrophes was substantially consistent with the prior year quarter as earned pricing is generally keeping pace with loss cost trends across most lines of business.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Current accident year loss and LAE ratio before catastrophes for the three and six months ended June 30, 2024 improved primarily due to lower net non-catastrophe property losses.

Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Current accident year catastrophe losses for the three months ended March 31, 2024 included losses from winter

storms, mainly in the Northeast, Pacific and South regions, as

well as tornado, wind and hail events in the Midwest, South and

mid-Atlantic regions.

Current accident year catastrophe losses for the three months ended March 31, 2023 included losses from winter storms primarily on the East and West Coasts as well as losses from various tornado, wind and hail events in several regions of the United States.

Prior accident year development was net favorable for the three months ended March 31, 2024 and included reserve decreases for workers' compensation and uncollectible reinsurance, partially offset by reserve increases for general liability, assumed reinsurance and marine.

Also included is a benefit of $24 related to amortization of the Navigators ADC deferred gain.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Current accident year catastrophe losses for the three and six months ended June 30, 2024 included losses from tornado, wind and hail events across several regions, but concentrated in the South and Midwest regions, and for the six month period, winter storms primarily in the Northeast, Pacific and South regions.

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.

Prior accident year development was net favorable for the three and six months ended June 30, 2024 and included reserve decreases for workers' compensation, catastrophes and bond, partially offset by reserve increases for general liability, assumed reinsurance and automobile liability.

Also included are benefits of $37 and $61 related to amortization of the Navigators ADC deferred gain for the three and six month periods, respectively.

For additional information regarding the ADC reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.

Prior accident year development was net favorable for the three months ended March 31, 2023 and included reserve decreases for workers' compensation and package business, partially offset by reserve increases for general liability, property and uncollectible reinsurance.

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.

Index to MD&A

3 unchanged sentences

Underwriting Summary

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Written premiums $ 913 $ 802 14 % $ 1,757 $ 1,549 13 %

Change in unearned premium reserve 31 8 NM

Change in unearned premium reserve 64 42 52 % 95 50 90 %

Earned premiums 849 760 12 % 1,662 1,499 11 %

3 unchanged sentences

Current accident year catastrophes [1] 125 103 21 % 177 150 18 %

Prior accident year development [1] (7) 20 NM

Prior accident year development [1] (34) (3) NM (41) 17 NM

Total losses and loss adjustment expenses 688 678 1 % 1,308 1,266 3 %

4 unchanged sentences

Net investment income [2] 50 34 47 % 100 72 39 %

Net realized gains (losses) [2] 1 (1) NM

Net realized losses [2] (8) (5) (60 %) (7) (6) (17) %

Net servicing and other income (expense) [3] 6 7 (14 %) 10 13 (23) %

4 unchanged sentences

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

[3] Includes servicing revenues of $19 and $19 for the three months ended March 31, 2024 and 2023, respectively.

Includes servicing expenses of $15 and $14 for the three months ended March 31, 2024 and 2023, respectively.

[3] Includes servicing revenues of $25 and $24 for the three months ended June 30, 2024 and 2023, respectively, and $44 and $43 for the six months ended June 30, 2024 and 2023, respectively.

Includes servicing expenses of $18 and $16 for the three months ended June 30, 2024 and 2023, respectively, and $33 and $30 for the six months ended June 30, 2024 and 2023, 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 March 31,

Written Premiums 2024 2023 Change

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

Written Premiums 2024 2023 Change 2024 2023 Change

Automobile $ 617 $ 543 14 % $ 1,217 $ 1,072 14 %

9 unchanged sentences

Premium Measures

Three Months Ended March 31,

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

Premium Measures 2024 2023 2024 2023

18 unchanged sentences

Underwriting Ratios

Three Months Ended March 31,

Underwriting Ratios 2024 2023 Change

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

Underwriting Ratios 2024 2023 Change 2024 2023 Change

Loss and loss adjustment expense ratio

8 unchanged sentences

Product Combined Ratios

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Combined ratio 105.4 116.4 (11.0) 104.7 113.3 (8.6)

6 unchanged sentences

Net Income (Loss)

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income changed to a net gain for the three months ended March 31, 2024 compared to a net loss for the prior year period, largely driven by improved underwriting results and an increase in net investment income.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net loss decreased for the three months ended June 30, 2024, largely driven by improved underwriting results and an increase in net investment income.

Net income changed to a net gain for the six months ended June 30, 2024 compared to a net loss for the prior year period, largely driven by improved underwriting results and an increase in net investment income.

Underwriting Loss

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Underwriting loss decreased driven by the effect of an increase in earned premium due to renewal written price increases and a change from unfavorable to favorable prior accident year development, partially offset by a slight increase in the current accident year loss and LAE ratio before catastrophes, an increase in current accident year catastrophe losses and an increase in direct marketing costs.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Underwriting loss decreased for the three and six months ended June 30, 2024 driven by the effect of an increase in earned premium due to renewal written price increases and a decrease in the CAY loss and LAE ratio before catastrophes, partially offset by an increase in current accident year catastrophe losses and an increase in direct marketing costs.

The three month period also benefited from an increase in favorable prior accident year development.

The six month period benefited from a change from unfavorable to favorable prior accident year development.

Expense ratio increased in the three month period primarily due an increase in direct marketing costs, partially offset by the impact of higher earned premium driven by earned pricing increases.

The expense ratio in the six month period decreased primarily due to the impact of higher earned premium driven by earned pricing increases, partially offset by an increase in direct marketing costs.

Index to MD&A

1 unchanged sentence

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

Expense ratio decreased primarily due to the impact of higher earned premium driven by earned pricing increases, partially offset by an increase in direct marketing costs.

Earned Premiums

Written Premiums

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Earned premiums increased due to higher written premium over the prior twelve months in both automobile and homeowners.

Written premiums increased driven by the effect of written pricing increases in both automobile and homeowners.

Renewal written pricing increases were higher for both automobile and homeowners, primarily in response to recent higher loss cost trends as well as higher insured values in homeowners.

Policy count retention slightly decreased in automobile, and was stable for homeowners.

Effective Policy count retention decreased both for automobile and for homeowners in response to renewal written pricing increases.

Policies in-force declined for both automobile and for homeowners, reflecting the level of new business in relation to non-renewed policies.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

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

Written premiums increased in both the three and six month periods driven by the effect of written pricing increases and by an increase in new premium in both automobile and homeowners.

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

Policy count retention decreased in automobile, and was stable for homeowners for both the three and six month periods.

Effective Policy count retention decreased both for automobile and for homeowners in the three and six month periods in response to renewal written pricing increases.

Policies in-force declined for both automobile and homeowners, reflecting the level of new business in relation to non-renewed policies.

Index to MD&A

Part I - Item 2.

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

Current Accident Year Loss and LAE Ratio before Catastrophes

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Current accident year Loss and LAE ratio before catastrophes increased slightly in automobile and was partially offset by a decrease in homeowners.

The increase in automobile was primarily due to an increase in automobile liability and physical damage claim severity, as well as a slightly higher level of frequency in the current period, mostly offset by the impact of earned pricing increases.

The automobile severity increases, although moderated from prior year, continue to include the inflationary effects on bodily injury claims and automobile parts and repairs, and also include higher attorney representation rates for liability claims.

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

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

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

The decrease in automobile was primarily due to the impact of earned pricing increases, partially offset by an increase in automobile liability and physical damage claim severity, in line with expectations.

The automobile severity increases continue to include the inflationary effects on bodily injury claims and automobile parts and repairs, and also include higher attorney representation rates for liability claims.

For homeowners, the decrease in the CAY loss and LAE ratio before catastrophes was due to a decrease in frequency for both weather and non-weather claims, as well as the impact of earned pricing increases, partially offset by an increase in severity for both weather and non-weather claims.

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, 2024 compared to the three and six months ended June 30, 2023

Current accident year catastrophe losses increased for both the three and six months ended June 30, 2024, compared to the prior year.

Current accident year catastrophe losses for 2024 included tornado, wind and hail events, mainly in the Midwest and South regions, as well as winter storms in the Pacific and South regions.

Current accident year catastrophe losses for the three months ended June 30, 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.

Prior accident year development was favorable for the three and six months ended June 30, 2024, primarily driven by lower estimated severity on automobile physical damage, automobile liability, and homeowners.

Net favorable prior accident year development for the three months ended June 30, 2023 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.

Index to MD&A

1 unchanged sentence

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

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

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Current accident year catastrophe losses increased for the three months ended March 31, 2024, compared to the prior year.

Current accident year catastrophe losses for 2024 included from tornado, wind and hail events, mainly in the Midwest and South regions, as well as winter storms in the Pacific and South regions.

Current accident year catastrophe losses for the three months ended March 31, 2023 included tornado, wind and hail events in several regions of the United States, as well as losses from winter storms primarily on the East and West coasts.

Prior accident year development was favorable for the three months ended March 31, 2024, primarily driven by improved severity on automobile physical damage.

Net unfavorable prior accident year development for the three months ended March 31, 2023 was primarily driven by higher severity on automobile physical damage.

| PROPERTY & CASUALTY OTHER OPERATIONS -

1 unchanged sentence

Underwriting Summary

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Losses and loss adjustment expenses

4 unchanged sentences

Net investment income [2] 19 17 12 % 37 33 12 %

Net realized gains (losses) [2] — (3) 100 %

Net realized losses [2] (3) (1) NM (3) (4) 25 %

Income before income taxes 14 12 17 % 23 19 21 %

4 unchanged sentences

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

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net income increased in the three months ended June 30, 2024, primarily due to a lower underwriting loss and higher net investment income, partially offset by an increase in net realized losses.

Net income increased in the six months ended June 30, 2024, primarily due to higher net investment income, and slightly lower net realized losses, partially offset by a greater underwriting loss.

Underwriting loss decreased in the three months ended June 30, 2024, primarily due to unfavorable prior accident year reserve development in the 2023 period.

Underwriting loss increased slightly in the six months ended June 30, 2024 due to higher unfavorable prior accident year reserve development in the 2024 period primarily related to an increase in reserves for uncollectible reinsurance, partially offset by a decrease in underwriting expenses.

Asbestos and environmental reserve comprehensive annual reviews will occur in the fourth quarter of 2024.

For information on A&E reserves, see MD&A - Critical Accounting Estimates, Asbestos and Environmental Reserves included in the Company's 2023 Form 10-K Annual Report.

Index to MD&A

1 unchanged sentence

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

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income increased primarily due to net realized losses in the 2023 period and higher net investment income, partially offset by a greater underwriting loss.

Underwriting loss increased primarily due to higher unfavorable prior accident year reserve development in the 2024 period related to an increase in reserves for uncollectible reinsurance.

Asbestos and environmental reserve comprehensive annual reviews will occur in the fourth quarter of 2024.

For information on A&E reserves, see MD&A - Critical Accounting Estimates, Asbestos and Environmental Reserves included in the Company's 2023 Form 10-K Annual Report.

| GROUP BENEFITS - RESULTS OF OPERATIONS

Operating Summary

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Premiums and other considerations $ 1,665 $ 1,630 2 % $ 3,304 $ 3,239 2 %

Net investment income [1] 112 113 (1 %) 226 223 1 %

Net realized gains [1] 1 5 (80) %

Net realized losses [1] (9) (19) 53 % (8) (14) 43 %

Total revenues 1,768 1,724 3 % 3,522 3,448 2 %

10 unchanged sentences

Premiums and Other Considerations

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Fully insured – ongoing premiums $ 1,607 $ 1,574 2 % $ 3,192 $ 3,131 2 %

Buyout premiums — 1 (100) %

Buyout premiums 1 — NM 1 1 — %

Fee income 57 56 2 % 111 107 4 %

1 unchanged sentence

Fully insured ongoing sales $ 101 $ 151 (33 %) $ 545 $ 625 (13) %

Index to MD&A

Part I - Item 2.

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

Ratios, Excluding Buyouts

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Group disability loss ratio 67.1 % 67.0 % 0.1 68.6 % 68.7 % (0.1)

5 unchanged sentences

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

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Net income margin 9.7 % 7.0 % 2.7 7.9 % 6.2 % 1.7

4 unchanged sentences

Core earnings margin 10.0 % 7.6 % 2.4 8.1 % 6.4 % 1.7

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income increased primarily due to a lower loss ratio, higher fully insured ongoing premiums, and higher net investment income, partially offset by a higher expense ratio and lower net realized gains.

Insurance operating costs and other expenses were higher prim arily due to the effect of higher earned premium, including higher staffing costs and commissions and increased investments in technology.

Index to MD&A

Part I - Item 2.

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

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net income increased in the three and six months ended June 30, 2024, primarily due to a lower group life loss ratio, higher fully insured ongoing premiums, and lower net realized losses.

For the six month period, these increases were partially offset by a higher expense ratio.

Insurance operating costs and other expenses were higher for both the three and six month periods, prim arily due to the effect of higher earned premium, including higher staffing costs and commissions, as well as higher incentive compensation, partially offset by an increase in the allowance for credit losses on premiums receivable in the 2023 period.

Fully Insured Ongoing Premiums

[1]Other of $100 and $104 for the three months ended March 31, 2023 and 2024 respectively, which includes other group coverages such as retiree health insurance, critical illness, accident and hospital indemnity coverages.

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Fully insured ongoing premiums increased over prior year and included an increase in exposure on existing accounts, new business sales, and lower persistency compared to the prior year period.

Fully insured ongoing sales decreased compared to prior year driven by lower group life sales, partially offset by an increase in group disability sales.

[1]Other of $102 and $107 for the three months ended June 30, 2023 and 2024 respectively, and $202 and $211 for the six months ended June 30, 2023 and 2024, 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, 2024 compared to the three and six months ended June 30, 2023

Fully insured ongoing premiums increased in both the three and six month periods over prior year and included an increase in exposure on existing accounts, new business sales, and persistency in excess of 90%, though slightly below the prior year periods.

Fully insured ongoing sales decreased in both the three and six months periods compared to prior year driven by both lower group life sales and group disability sales.

Index to MD&A

1 unchanged sentence

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

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Loss ratio improved 1.7 points compa red to the prior year period reflecting lower group life and group disability loss ratios.

The group life loss ratio decreased 4.1 points driven by a lower level of mortality compared to the prior year period.

The group disability loss ratio decreased 0.3 points due to favorable long-term disability claim recoveries, largely offset by higher incidence in paid family leave and short-term disability products.

Expense ratio increased in 2024 driven by higher staffing costs, increased investments in technology, and higher commission expense, partially offset by the effects of higher earned premium.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Loss ratio improved 3.2 points in the three months ended June 30, 2024 compa red to the prior year period driven by a lower group life loss ratio.

The group life loss ratio decreased

9.2 points driven by lower claim severity experience.

The group disability loss ratio was essentially flat driven by lower long-term disability claim incidence, and a higher New York paid family leave risk adjustment benefit, offset by a higher loss ratio on paid family and medical leave products.

Total loss ratio improved 2.5 points in the six months ended June 30, 2024 compared to the prior year period, primarily reflecting a lower group life loss ratio.

The group life loss ratio decreased 6.7 points driven by a lower level of mortality and lower claim severity experience compared to the prior year period.

The group disability loss ratio was essentially flat driven by favorable long-term disability claim recoveries and incidence, and a higher New York paid family leave risk adjustment benefit, offset by a higher loss ratio on paid family and medical leave products.

Expense ratio decreased for the three month period primarily due to an increase in the allowance for credit losses on premiums receivable in the 2023 period and the effects of higher earned premium, partially offset by the impact of higher staffing costs, including higher incentive compensation, and higher commission expense.

The expense ratio increased for the six month period as the impact of higher staffing costs, including higher incentive compensation, and higher commission expense, was partially offset by the effects of higher earned premium.

| HARTFORD FUNDS - RESULTS OF OPERATIONS

Operating Summary

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Fee income and other revenue $ 253 $ 244 4 % $ 503 $ 485 4 %

Net investment income 5 4 25 % 9 7 29 %

Net realized gains 5 5 — %

Net realized gains 3 1 NM 8 6 33 %

Total revenues 261 249 5 % 520 498 4 %

6 unchanged sentences

Adjustment to reconcile ROA to ROA, core earnings:

Effect of net realized gains excluded from core earnings, before tax (1.5) (1.6) 6 %

Effect of income tax expense 0.3 0.3 — %

Effect of net realized gains excluded from core earnings, before tax (0.9) (0.3) NM (1.3) (1.0) (30) %

Effect of income tax expense 0.6 — NM 0.5 0.2 150 %

ROA, core earnings [2] 12.8 13.8 (7 %) 12.6 12.7 (1) %

5 unchanged sentences

Hartford Funds Segment AUM

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Mutual Fund and ETF AUM - beginning of period $ 123,559 $ 115,508 7 % $ 119,316 $ 112,472 6 %

9 unchanged sentences

Mutual Fund and ETF AUM by Asset Class

As of March 31,

As of June 30,

2024 2023 Change

6 unchanged sentences

[1]Includes balanced, allocation and alternative investment products.

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net income increased for the three months ended March 31, 2024 primarily due to an increase in fee income net of variable expenses driven by an increase in daily average AUM, and higher net investment income.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net income decreased for the three months ended June 30, 2024, primarily due to a decrease in fee income net of operating costs and other expenses, partially offset by higher net realized gains and higher net investment income.

Net income increased for the six months ended June 30, 2024, primarily due to an increase in fee income net of operating costs and other expenses, driven by an increase in daily average AUM, higher net realized gains, and higher net investment income.

Hartford Funds AUM

March 31, 2024 compared to March 31, 2023

June 30, 2024 compared to June 30, 2023

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

Net outflows were $2.5 billion for the three months ended March 31, 2024 compared to net outflows of $1.2 billion for the three months ended March 31, 2023.

Net outflows were $1.1 billion and $3.6 billion, respectively, for the three and six months ended June 30, 2024 compared to net outflows of $1.3 billion and $2.4 billion, respectively, for the three and six months ended June 30, 2023.

Index to MD&A

3 unchanged sentences

Operating Summary

Three Months Ended March 31,

2024 2023 Change

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

2024 2023 Change 2024 2023 Change

Fee income [1] $ 10 $ 11 (9 %) $ 20 $ 20 — %

Other revenue — 1 (100) %

Other revenue 1 — NM 1 1 — %

Net investment income [2] 14 8 75 % 30 18 67 %

4 unchanged sentences

Interest expense [4] 50 50 — % 100 100 — %

Restructuring and other costs 1 — NM

Restructuring and other costs — 3 (100 %) 1 3 (67) %

Total benefits, losses and expenses 63 66 (5 %) 130 131 (1) %

10 unchanged sentences

Net loss available to common stockholders

Three months ended March 31, 2024 compared to the three months ended March 31, 2023

Net loss available to common stockholders for the three months ended March 31, 2024 decreased primarily due to higher net investment income, higher net realized gains, and a higher tax benefit related to the vesting of stock-based compensation awards during the quarter.

Three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net loss available to common stockholders for the three and six months ended June 30, 2024, decreased primarily due to higher net investment income and lower restructuring and other costs.

Also impacting the six months ended June 30, 2024 was a higher tax benefit related to the vesting of stock-based compensation awards during the first quarter.

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Part I - Item 2.

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

ENTERPRISE RISK MANAGEMENT

The Company’s Board of Directors has ultimate responsibility for risk oversight, as described more fully in our Proxy Statement, while management is tasked with the day-to-day management of the Company’s risks.

The Company manages and monitors risk through risk policies,

controls and limits.

The Company manages and monitors risk through risk policies, controls and limits.

At the senior management level, an Enterprise Risk and Capital Committee (“ERCC”) oversees the risk profile and risk management practices of the Company.

3 unchanged sentences

• risk monitoring;

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Part I - Item 2.

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

• internal and external risk reporting.

7 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 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 from credit and political risk insurance ("CPRI") coverages, losses from derivative lawsuits, and other securities actions and covered perils.

("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.

12 unchanged sentences

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.

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Part I - Item 2.

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

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

3 unchanged sentences

The Company models numerous deterministic scenarios including losses caused by malware, data breach, distributed denial of service attacks, intrusions of cloud environments and attacks of power grids.

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Part I - Item 2.

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

Among specific risk tolerances set by the Company, risk limits are set for natural catastrophes, terrorism risk and pandemic risk.

3 unchanged sentences

The Company has no significant finite risk contracts in place and the statutory surplus benefit from all such prior year contracts is immaterial.

The Hartford also participates in governmentally administered reinsurance facilities such as the Florida Hurricane Catastrophe Fund (“FHCF”), the Terrorism

Risk Insurance Program Reauthorization Act (“TRIPRA") and other reinsurance programs relating to particular risks or specific lines of business.

The Hartford also participates in governmentally administered reinsurance facilities such as the Florida Hurricane Catastrophe Fund (“FHCF”), the Terrorism Risk Insurance Program Reauthorization Act (“TRIPRA") and other reinsurance programs relating to particular risks or specific lines of business.

Reinsurance for Catastrophes - The Company utilizes various reinsurance programs to mitigate catastrophe losses including excess of loss occurrence-based treaties covering property and workers’ compensation, a catastrophe bond, an aggregate property catastrophe treaty, and individual risk agreements (including facultative reinsurance) that reinsure losses from specific classes or lines of business.

1 unchanged sentence

The Company has reinsurance in place to cover individual group life losses in excess of $1 per person.

Primary Catastrophe Treaty Reinsurance Coverages as of March 31, 2024 [1]

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Part I - Item 2.

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

Primary Catastrophe Treaty Reinsurance Coverages as of June 30, 2024 [1]

Portion of losses reinsured Portion of losses retained by The Hartford

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[1] These agreements do not cover the assumed reinsurance business which purchases its own retrocessional coverage.

[2] In addition to the Per Occurrence Property Catastrophe Treaty, for Florida homeowners wind events, The Hartford has purchased the mandatory FHCF reinsurance for the annual period starting June 1, 2023, and will renew for the annual period starting June 1, 2024.

Retention and coverage varies by writing company.

8 unchanged sentences

[8] In addition to the limits shown, the workers' compensation reinsurance includes a non-catastrophe, industrial accident layer, providing coverage for 80% of $25 in per event losses in excess of a $25 retention.

In addition to the property catastrophe reinsurance coverage described in the above table, the Company has other reinsurance agreements that cover property catastrophe losses,

some of which provide for reinstatement of limits in the event of a loss with reinstatement provisions varying depending on the layer of coverage.

The Per Occurrence Property Catastrophe

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Part I - Item 2.

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

Treaty, and Workers' Compensation Catastrophe Treaty include a provision to reinstate one limit in the event that a catastrophe loss exhausts limits on one or more layers under the treaties.

In addition to the property catastrophe reinsurance coverage described in the above table, the Company has other reinsurance agreements that cover property catastrophe losses, some of which provide for reinstatement of limits in the event of a loss with reinstatement provisions varying depending on the layer of coverage.

The Per Occurrence Property Catastrophe Treaty, and Workers' Compensation Catastrophe Treaty include a provision to reinstate one limit in the event that a catastrophe loss exhausts limits on one or more layers under the treaties.

Reinsurance for Terrorism- For the risk of terrorism, private sector catastrophe reinsurance capacity is generally limited and largely unavailable for terrorism losses caused by nuclear, biological, chemical or radiological attacks.

1 unchanged sentence

TRIPRA provides a backstop for insurance-related losses resulting from any “act of terrorism”, which is certified by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Attorney General, for losses that exceed a threshold of industry losses of $200.

Under the program, in any one calendar year, the federal government will pay a percentage of losses incurred from a certified act of terrorism after an insurer's losses exceed 20% of the Company's eligible direct commercial earned premiums of the prior calendar year up to a combined annual aggregate limit for the federal government and all insurers of $100 billion.

program, in any one calendar year, the federal government will pay a percentage of losses incurred from a certified act of terrorism after an insurer's losses exceed 20% of the Company's eligible direct commercial earned premiums of the prior calendar year up to a combined annual aggregate limit for the federal government and all insurers of $100 billion.

The percentage of losses paid by the federal government is 80%.

1 unchanged sentence

If an act of terrorism or acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, Congress would be responsible for determining how additional losses in excess of $100 billion will be paid.

Reinsurance for A&E and Navigators Group Reserve Development - The Company has two ADC reinsurance agreements in place, both of which are accounted for as retroactive reinsurance.

One agreement covers substantially all A&E reserve development for 2016 and prior accident years (the “A&E ADC”) up to an aggregate limit of $1.5 billion and the other covered substantially all reserve development of Navigators Insurance Company and certain of its affiliates for 2018 and prior accident years (the “Navigators ADC”) up to an aggregate limit of $300, for which the Company had previously ceded the available limit.

Reinsurance for A&E and Navigators Group Reserve Development - The Company has two adverse development covers ("ADC") reinsurance agreements in place, both of which are accounted for as retroactive reinsurance.

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Part I - Item 2.

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

had previously ceded the available limit.

As of December 31, 2023, the Company had paid claims related to the Navigators ADC in excess of the $1.816 billion acquisition date reserves plus the $100 retention.

During the three months ended March 31, 2024, the Company began collecting recoveries from NICO and as a result amortized $24 of the $209 deferred gain within benefits, losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations.

As of March 31, 2024 and December 31, 2023, the deferred gain on the Navigators ADC was $185 and $209, respectively, and is included in other liabilities on the Condensed Consolidated Balance Sheets.

During the six months ended June 30, 2024, the Company collected recoveries from NICO and as a result amortized $61of the $209 deferred gain within benefits, losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations.

As of June 30, 2024 and December 31, 2023, the deferred gain on the Navigators ADC was $148 and $209, respectively, and is included in other liabilities on the Condensed Consolidated Balance Sheets.

For more information on the A&E ADC and the Navigators ADC, see Note 1 - Basis of Presentation and Significant Accounting Policies and Note 11 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements, included in The Hartford's 2023 Form 10-K Annual Report.

1 unchanged sentence

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

cause correlated movement in multiple risk factors.

Some events may cause correlated movement in multiple risk factors.

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

14 unchanged sentences

Stressed market conditions may impact the ability to sell assets or otherwise transact business and may result in a significant loss in value of the investment portfolio.

Impact Inadequate capital resources and liquidity could negatively affect the Company’s overall financial strength and its ability to generate cash flows from its businesses, borrow funds at competitive rates, and raise new capital to meet operating and growth needs.

Impact Inadequate capital resources and liquidity could negatively affect the Company’s overall financial strength and its

ability to generate cash flows from its businesses, borrow funds at competitive rates, and raise new capital to meet operating and growth needs.

Management The Company has defined ongoing monitoring and reporting requirements to assess liquidity across the enterprise under both current and stressed market conditions.

3 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

Index to MD&A

Part I - Item 2.

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

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.

11 unchanged sentences

The Company manages its credit risk by managing aggregations of risk, holding a diversified mix of issuers and counterparties across its investment, reinsurance and insurance portfolios and limiting exposure to any specific reinsurer or counterparty.

Potential credit losses can be mitigated through diversification (e.g., geographic regions, asset types, industry sectors), hedging and the use of collateral to reduce net credit exposure.

Potential credit losses can be mitigated through diversification (e.g., geographic regions, asset types, industry

Index to MD&A

Part I - Item 2.

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

sectors), hedging and the use of collateral to reduce net credit exposure.

The Company manages credit risk through the use of various surveillance, analyses and governance processes.

The investment and reinsurance areas have formal policies and procedures for counterparty approvals and authorizations, which establish criteria defining minimum levels of creditworthiness and financial stability for eligible counterparties.

Potential investments are subject to underwriting reviews and private securities are subject to management approval.

Potential investments are subject to underwriting reviews and management approval.

Mitigation strategies vary across the three sources of credit risk, but may include:

9 unchanged sentences

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 March 31, 2024, 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 June 30, 2024, 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.

8 unchanged sentences

The Company also has derivative counterparty exposure policies which limit the Company’s exposure to credit risk.

Credit exposures are generally quantified based on the prior business day’s net fair value, including income accruals, of all derivative positions transacted with a single counterparty for each separate legal entity.

Credit exposures are generally quantified based on the prior business

day’s net fair value, including income accruals, of all derivative positions transacted with a single counterparty for each separate legal entity.

The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not necessarily reflective of credit risk.

2 unchanged sentences

For further discussion, see the Derivative Commitments section of Note 13 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.

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Part I - Item 2.

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

Use of Credit Derivatives

14 unchanged sentences

Interest rate risk is the risk of financial loss due to adverse changes in the value of assets and liabilities arising from movements in interest rates.

Interest rate risk encompasses exposures with respect to changes in the level of interest rates, the shape of the term structure of rates and the volatility of interest rates.

Interest rate risk encompasses exposures with respect to changes in the level of interest rates, the shape of the term structure of rates and the volatility of

Index to MD&A

Part I - Item 2.

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

interest rates.

Interest rate risk does not include exposure to changes in credit spreads.

1 unchanged sentence

Impact Changes in interest rates from current levels can have both favorable and unfavorable effects for the Company.

Management The Company primarily manages its exposure to interest rate risk by constructing investment portfolios that seek to protect the Company from the economic impact

associated with changes in interest rates by setting portfolio duration targets that are aligned with the duration of the liabilities that they support.

Management The Company primarily manages its exposure to interest rate risk by constructing investment portfolios that seek to protect the Company from the economic impact associated with changes in interest rates by setting portfolio duration targets that are aligned with the duration of the liabilities that they support.

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.

8 unchanged sentences

Hartford Funds earnings are also significantly influenced by the U.S.

and other equity markets.

and other equity

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

3 unchanged sentences

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.

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Part I - Item 2.

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

Foreign Currency Exchange Risk

7 unchanged sentences

Management The Company manages its foreign currency exchange risk primarily through asset-liability matching and through the use of derivative instruments.

However, legal entity

capital is invested in local currencies in order to satisfy regulatory requirements and to support local insurance operations.

However, legal entity capital is invested in local currencies in order to satisfy regulatory requirements and to support local insurance operations.

The foreign currency exposure of non-U.S.

6 unchanged sentences

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

Index to MD&A

Part I - Item 2.

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

Fixed Maturities, AFS by Credit Quality

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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 $ 43,035 $ 40,814 100.0 % $ 41,726 $ 39,818 100.0 %

The fair value of fixed maturities, AFS increased as compared to December 31, 2023, primarily due to net additions of corporate bonds, partially offset by a decrease in valuations due to higher interest rates, net of tighter credit spreads.

FVO securities are

not included in the preceding table.

The fair value of fixed maturities, AFS increased as compared to December 31, 2023, primarily due to net additions of corporate bonds and securitized products, partially offset by net reductions to tax-exempt municipal bonds and U.S.

treasuries, and an overall decrease in valuations due to higher interest rates.

FVO securities are not included in the preceding table.

For further discussion on FVO securities, see Note 4 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.

3 unchanged sentences

Fixed Maturities, AFS by Type

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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 Company primarily increased holdings of financial services, utilities, consumer non-cyclical, and energy corporate bonds.

treasuries, and an overall decrease in valuations due to higher interest rates.

The Company primarily increased holdings of consumer, financial services, utilities, and energy corporate bonds, in addition to high-quality RMBS and CLO.

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 March 31, 2024

Exposure to CMBS & RMBS Bonds as of June 30, 2024

AAA AA A BBB BB and Below Total

26 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 March 31, 2024, mortgage loans had an amortized cost of $6.2 billion and carrying value of $6.2 billion, with an ACL of $48.

As of June 30, 2024, mortgage loans had an amortized cost of $6.4 billion and carrying value of $6.4 billion, with an ACL of $48.

As of December 31, 2023, mortgage loans had an amortized cost of $6.1 billion and carrying value of $6.1 billion, with an ACL of $51.

1 unchanged sentence

improved economic scenario forecasts and property specific reductions, partially offset by net additions of new loans.

The Company funded $146 of commercial mortgage loans with a weighted average loan-to-value (“ LTV ”) ratio of 60% and a weighted average yield of 6.9% during the three months ended March 31, 2024.

The Company continues to originate commercial mortgage loans on institutional-quality industrial properties with strong LTV ratios.

There were no mortgage loans held for sale as of March 31, 2024, or December 31, 2023.

The Company funded $371 of commercial mortgage loans, primarily industrial properties, with a weighted average loan-to-value (“ LTV ”) ratio of 58% and a weighted average yield of 7.1% during the six months ended June 30, 2024.

The Company continues to originate commercial mortgage loans on institutional-quality properties with strong LTV ratios.

There were no mortgage loans held for sale as of June 30, 2024, or December 31, 2023.

Municipal Bonds

4 unchanged sentences

Available For Sale Investments in Municipal Bonds

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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

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Power 274 265 A 275 271 A

Sales Tax 201 201 AA 231 237 AA

Housing 198 188 AA 179 172 AA

Other 620 592 A+ 611 588 A+

Sales Tax 181 178 AA 231 237 AA

Other 499 470 AA- 611 588 A+

Total Revenue 4,626 4,379 AA- 5,245 5,067 AA-

5 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 March 31, 2024, the largest issuer concentrations were the New York City Transitional Finance Authority, the Metropolitan Transportation Authority, and CommonSpirit Health, which each comprised less than 3% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds.

As of June 30, 2024, the largest issuer concentrations were CommonSpirit Health, the State of Illinois, 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, 2023, the largest issuer concentrations were the New York City Transitional Finance Authority, the State of Illinois, 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.

5 unchanged sentences

Limited Partnerships and Other Alternative Investments - Net Investment Income

Three Months Ended March 31,

Amount Yield [1] Amount Yield [1]

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

2024 2023 2024 2023

Amount Yield [1] Amount Yield [1] Amount Yield [1] Amount Yield [1]

Real estate joint ventures and funds $ (34) (7.2 %) $ (11) (2.5 %) $ (66) (6.7 %) $ (27) (3.0 %)

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Investments in Limited Partnerships and Other Alternative Investments

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Amount Percent Amount Percent

6 unchanged sentences

Fixed Maturities, AFS — Unrealized Loss Aging

The total gross unrealized losses were $2.4 billion as of March 31, 2024, and have increased $94 million from December 31, 2023, primarily due to higher interest rates, partially offset by tighter credit spreads.

As of March 31, 2024, $2.0 billion of the gross unrealized losses were associated with fixed maturities, AFS depressed less than 20% of amortized cost.

The remaining $413 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, municipal bonds, and RMBS 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 $2.4 billion as of June 30, 2024, and have increased $136 from December 31, 2023, primarily due to higher interest rates.

As of June 30, 2024, $1.9 billion of the gross unrealized losses were associated with fixed maturities, AFS depressed less than 20% of amortized cost.

The remaining $523 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, U.S.

treasuries, municipal bonds, and RMBS 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.

3 unchanged sentences

Unrealized Loss Aging for Fixed Maturities, AFS Securities

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Consecutive Months

7 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Consecutive Months

10 unchanged sentences

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

Three months ended March 31, 2024

The Company recorded net credit losses of $1 primarily attributable to one below investment grade corporate issuer that had an ACL in prior periods.

Unrealized losses on securities with an ACL recognized in other comprehensive income ("OCI") were $0.

Three and six months ended June 30, 2024

For the three and six months ended June 30, 2024, the Company recorded net credit losses of $1 and $2, respectively.

Net credit losses were primarily attributable to increases in the ACL of $1 in both periods on CMBS, in addition for the six month period, net credit losses of $1 primarily attributable to one below investment grade corporate issuer.

Unrealized losses on securities with an ACL recognized in other comprehensive income ("OCI") were less than $1.

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

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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 months ended March 31, 2023

The Company recorded net credit losses of $5, primarily attributable to new expected credit losses of $4 on a below investment grade corporate wirelines issuer and $1 related to a CMBS driven by prepayments.

Unrealized losses on securities with an ACL recognized in other comprehensive income were $4.

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.

There were no intent-to-sell impairments.

ACL on Mortgage Loans

Three months ended March 31, 2024

Three and six months ended June 30, 2024

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.

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

For the three months ended March 31, 2024, the Company recorded a release in the ACL on mortgage loans of $3.

For the three months ended June 30, 2024, the ACL on mortgage loans was unadjusted.

For the six months ended June 30, 2024, the Company recorded a release in the ACL on mortgage loans of $3.

The release reflects improved economic scenario forecasts and property specific reductions, partially offset by net additions of new loans.

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

Three months ended March 31, 2023

There was no change to the ACL on mortgage loans which incorporated a level of economic uncertainty and the potential impact on real estate property valuations.

Three and six months ended June 30, 2023

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.

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 March 31, 2024:

Capital available to the holding company as of June 30, 2024:

• Approximately $1.3 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 March 31, 2024, there were no borrowings outstanding;

As of June 30, 2024, 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 March 31, 2024, $1.9 billion was available, $105 was outstanding between certain affiliates and there were no amounts outstanding at the HFSG holding company.

Dividends and other sources of capital for the three months ended March 31, 2024:

As of June 30, 2024, $1.9 billion was available, $105 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, 2024:

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 $153 of net dividends from the Company's property and casualty insurance subsidiaries through March 31, 2024;

• Group Benefits - HFSG Holding Company received $245 in dividends from Hartford Life and Accident Insurance Company (" HLA ") through March 31, 2024;

• Hartford Funds - HFSG Holding Company received $31 in dividends from Hartford Funds through March 31, 2024.

Expected liquidity requirements for the next twelve months as of March 31, 2024:

• P&C - HFSG Holding Company received $567 of net dividends from the Company's property and casualty insurance subsidiaries through June 30, 2024;

• Group Benefits - HFSG Holding Company received $458 in dividends from Hartford Life and Accident Insurance Company (" HLA ") through June 30, 2024;

• Hartford Funds - HFSG Holding Company received $64 in dividends from Hartford Funds through June 30, 2024;

• Other - HFSG Holding Company received $28 in dividends from other non-insurance subsidiaries through June 30, 2024.

Expected liquidity requirements for the next twelve months as of June 30, 2024:

• $194 of interest on debt.

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• $555 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 March 31, 2024:

Expected liquidity requirements for beyond the next twelve months as of June 30, 2024:

• Interest on and repayments of debt.

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Equity repurchase program:

During the three months ended March 31, 2024, the Company repurchased 3.8 million common shares for $350 under the $3.0 billion share repurchase program authorized by the Board of Directors, effective through December 31, 2024.

As of March 31, 2024, the Company has $1.0 billion remaining for equity repurchases under the share repurchase program.

During the period April 1, 2024 through April 24, 2024, the Company repurchased approximately 1.1 million common shares for $113.

During the six months ended June 30, 2024, the Company repurchased 7.3 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, 2024, the Company has $648 remaining for equity repurchases under the share repurchase program.

During the period July 1, 2024 through July 24, 2024, the Company repurchased approximately 1.0 million common shares for $105.

In addition to the authorization covering the period from August 1, 2022 to December 31, 2024, in July, 2024, the Board of Directors approved a share repurchase authorization for up to $3.3 billion effective from August 1, 2024 to December 31, 2026.

While the Company has the flexibility to use a portion of the new authorization in 2024, it expects to use the vast majority of the new authorization in 2025 and 2026.

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 Company maintains sufficient liquidity and has a variety of contingent liquidity resources to manage liquidity across a range of economic scenarios.

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.

The HFSG Holding Company expects to continue to receive

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

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.

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 January 1, 2024:

The Hartford's Board of Directors declared the following quarterly dividends since April 1, 2024:

Common Stock Dividends

Declared Record Payable Amount per share

February 21, 2024 March 4, 2024 April 2, 2024 $ 0.470

May 15, 2024 June 3, 2024 July 2, 2024 $ 0.470

July 17, 2024 September 3, 2024 October 2, 2024 $ 0.470

Preferred Stock Dividends

Declared Record Payable Amount per share

February 21, 2024 May 1, 2024 May 15, 2024 $ 375.00

May 15, 2024 August 1, 2024 August 15, 2024 $ 375.000

July 17, 2024 November 1, 2024 November 15, 2024 $ 375.00

There are no current restrictions on the HFSG Holding Company's ability to pay dividends to its stockholders.

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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 2023 Form 10-K Annual Report.

Through the first three months of 2024, HFSG Holding Company received $429 of net dividends from its subsidiaries, including $245 from HLA, $31 from Hartford Funds and $153 from its P&C subsidiaries, excluding $12 of P&C dividends related to interest payments on an intercompany note owed by Hartford Holdings, Inc.

Through the first six months of 2024, HFSG Holding Company received $1.1 billion of net dividends from its subsidiaries, including $458 from HLA, $64 from Hartford Funds, $28 from other non-insurance subsidiaries and $567 from its P&C subsidiaries, excluding $25 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.

("HHI") to Hartford Fire Insurance Company.

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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 March 31, 2024, 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 June 30, 2024, 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 14 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2023 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 March 31, 2024, $1.9 billion was available, $105 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

As of June 30, 2024, $1.9 billion was available, $105 was outstanding between certain affiliates, and there were no amounts outstanding at the HFSG Holding Company.

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

variable rates.

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 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 March 31, 2024, there were no advances outstanding.

As of June 30, 2024, there were no advances outstanding.

For further information regarding collateralized advances with FHLBB, see Note 14 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2023 Form 10-K Annual Report.

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The Hartford has a committed credit facility agreement with a syndicate of lenders (the "Lloyd's Facility").

The Lloyd's Facility has two tranches with one tranche extending a $74 commitment and the other tranche extending a £73 million ($92 as of March 31, 2024) commitment.

As of March 31, 2024, letters of credit with an aggregate face amount of $74 and £73 million, or $92, were outstanding under the Lloyd's Facility.

The Lloyd's Facility has two tranches with one tranche extending a $74 commitment and the other tranche extending a £73 million ($92 as of June 30, 2024) commitment.

As of June 30, 2024, letters of credit with an aggregate face amount of $74 and £73 million, or $92, were outstanding under the Lloyd's Facility.

Among other covenants, the Lloyd's 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 March 31, 2024, The Hartford was in compliance with all financial covenants of the facility.

As of June 30, 2024, The Hartford was in compliance with all financial covenants of the facility.

For further information regarding the Lloyd's Facility, see Note 14 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2023 Form 10-K Annual Report.

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

If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could terminate agreements and demand immediate settlement of the outstanding net derivative positions transacted under each agreement.

For further information, refer to Note 13 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.

As of March 31, 2024, 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 June 30, 2024, 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.

| INSURANCE OPERATIONS

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Property & Casualty Operations

As of March 31, 2024

As of June 30, 2024

Fixed maturities $ 32,943

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Group Benefits

As of March 31, 2024

As of June 30, 2024

Fixed maturities $ 7,959

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Total $ 8,192

Group Benefits invested assets also include $74 in equity securities, $1.6 billion in mortgage loans and $1.0 billion in limited partnerships and other alternative investments.

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

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

adjustment expenses as of March 31, 2024 were $34.5 billion and net of reinsurance were $27.9 billion.

Group Benefits invested assets also include $49 in equity securities, $1.6 billion in mortgage loans and $1.0 billion in limited partnerships and other alternative investments.

Property & Casualty reserves for unpaid losses and loss adjustment expenses as of June 30, 2024 were $35.1 billion and net of reinsurance were $28.6 billion.

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

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

Group Benefits reserves as of March 31, 2024 were $8.9 billion and net of reinsurance were $8.7 billion.

Group Benefits reserves as of June 30, 2024 were $8.9 billion and net of reinsurance were $8.6 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 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.

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 2023 Form 10-K Annual Report.

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 $401 as of March 31, 2024 related to retained run-off liabilities of its former life and annuity business.

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 2023 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 as of June 30, 2024 were $386 and net of reinsurance were $152.

These reserves related to retained run-off liabilities of its former life and annuity business.

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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 March 31, 2024, Hartford Funds cash and short-term investments were $275.

As of June 30, 2024, Hartford Funds cash and short-term investments were $269.

| PURCHASE AND OTHER OBLIGATIONS

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It is anticipated that these purchase commitments and operating lease obligations will be funded through the Company’s normal operating and investing activities.

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Part I - Item 2.

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

| CAPITALIZATION

Capital Structure

March 31, 2024 December 31, 2023 Change

June 30, 2024 December 31, 2023 Change

Long-term debt $ 4,364 $ 4,362 — %

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Debt to capitalization 22 % 22 %

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Part I - Item 2.

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

Total capitalization increased $142 as of March 31, 2024 compared to December 31, 2023 primarily due to net income in excess of common stockholder dividends in the period, partially offset by share repurchases and an increase in net unrealized losses on fixed maturities, AFS.

Total capitalization increased $355 as of June 30, 2024 compared to December 31, 2023 primarily due to net income in excess of common stockholder dividends in the period, partially offset by share repurchases and an increase in net unrealized losses on fixed maturities, AFS.

For additional information on AOCI, net of tax, including net unrealized gain (losses) from securities, see Note 15 - Changes

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For additional information on debt, see and Note 14 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2023 Form 10-K Annual Report.

Three Months Ended March 31,

Six Months Ended June 30,

Net cash provided by operating activities $ 2,357 $ 822

Net cash used for investing activities $ (435) $ (446)

Net cash provided by (used for) investing activities $ (1,323) $ 53

Net cash used for financing activities $ (1,009) $ (1,004)

Cash and restricted cash– end of period $ 210 $ 222

Cash provided by operating activities increased in 2024 as compared to the prior year period primarily driven by an increase in P&C and Group Benefits premiums received, partially offset by an increase in Group Benefits loss and loss adjustment expenses paid and higher operating expenses, including increased commissions and staffing costs.

Cash used for investing activities was consistent with the prior year as a result of a change from net payments for to net proceeds from short term investments, largely offset by an increase in net payments for fixed maturities, AFS and a decrease in net proceeds from equity securities, at fair value.

Cash used for financing activities was relatively consistent with the prior year, as a reduction in net outflows on investment and universal life type contracts and a decrease in net issuance of shares under incentive and stock compensation plans was largely offset by an increase in dividends paid on common stock.

Operating cash flows for the three months ended March 31, 2024 has been adequate to meet liquidity requirements.

Cash provided by operating activities increased in 2024 as compared to the prior year period primarily driven by a decrease in P&C loss and loss adjustment expenses due to the $787 payment to the Boy Scouts of America in the prior year, and an increase in P&C and Group Benefits premiums received, partially offset by higher operating expenses, including increased commissions and staffing costs, and an increase in Group Benefits loss and loss adjustment expenses paid.

Cash used for investing activities changed from net inflows in the 2023 period to net outflows in the 2024 period as a result of a decrease in net proceeds from equity securities at fair value, an increase in net payments for fixed maturities, AFS,

and a decrease in net proceeds from short term investments, partially offset by an increase in payments for fixed maturities, FVO.

Cash used for financing activities was consistent with the prior year, as a decrease in net issuance of shares under incentive and stock compensation plans was largely offset by an increase in dividends paid on common stock and an increase in net outflows on investment and universal life type contracts.

Operating cash flows for the six months ended June 30, 2024 has been adequate to meet liquidity requirements.

| EQUITY MARKETS

For a discussion of the potential impact of the equity markets on capital and liquidity, see the Financial Risk section in this MD&A and the Financial Risk on Statutory Capital section of the MD&A in the Company's 2023 Form 10-K Annual Report.

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Part I - Item 2.

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

Ratings are an important factor in establishing a competitive position in the insurance marketplace and impact the Company's ability to access financing and its cost of borrowing.

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In the event the Company’s ratings are downgraded, the Company’s competitive position, ability to access financing, and its cost of borrowing, may be adversely impacted.

These ratings are not a recommendation to buy, sell or hold any of The Hartford's securities and they may be revised or withdrawn at any time at the discretion of the rating organization.

Each agency's rating should be evaluated independently of any other agency's rating.

The system and the number of rating categories can vary across rating agencies.

Among other factors, rating agencies consider the level of statutory capital and surplus of our U.S.

insurance subsidiaries as well as the level of GAAP capital held by the Company in determining the Company's financial strength and credit ratings.

Rating agencies may implement changes to their capital formulas that have the effect of increasing the amount of capital we must hold in order to maintain our current ratings.

See Risk Factors disclosed in Item 1A of Part I of the Company's 2023 Form 10-K Annual Report.

Insurance Financial Strength Ratings as of

April 24, 2024

July 24, 2024

Best Standard & Poor’s Moody’s

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Senior debt a- BBB+ Baa1

These ratings are not a recommendation to buy, sell or hold any of The Hartford's securities and they may be revised or withdrawn at any time at the discretion of the rating organization.

Each agency's rating should be evaluated independently of any other agency's rating.

The system and the number of rating categories can vary across rating agencies.

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Part I - Item 2.

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

Among other factors, rating agencies consider the level of statutory capital and surplus of our U.S.

insurance subsidiaries as well as the level of GAAP capital held by the Company in determining the Company's financial strength and credit ratings.

Rating agencies may implement changes to their capital formulas that have the effect of increasing the amount of capital we must hold in order to maintain our current ratings.

See Risk Factors disclosed in Item 1A of Part I of the Company's 2023 Form 10-K Annual Report.

| STATUTORY CAPITAL

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statutory capital 325 (155) 170

U.S statutory capital at March 31, 2024

U.S statutory capital at June 30, 2024

$ 12,874 $ 2,593 $ 15,467

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For a discussion regarding The Hartford’s legal proceedings, see the information contained in Note 13 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements.

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Part I - Item 2.

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

Legislative and Regulatory Developments

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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.

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Item 2. Management’s Discussion and Analysis