Profile: Hartford Financial Services Group Inc (HIG.N)
22 Aug 2014
Hartford Financial Services Group Inc., formerly The Hartford Financial Services Group, Inc., incorporated on December 9, 1985, is an insurance and financial services company. The Company is a provider of investment products and life, property, and casualty insurance to both individual and business customers in the United States of America. The Company maintains a retail mutual fund operation, whereby the Company, through wholly owned subsidiaries, provides investment management and administrative services to The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II, Inc. (collectively, mutual funds), consisting of 57 mutual funds, as of December 31, 2011. The Company operates in four segments: Commercial Markets, Consumer Markets, Wealth Management and Runoff Operations. In July 2014, the Company sold its Japanese annuity subsidiary, Hartford Life Insurance K.K. (HLIKK), to ORIX Life Insurance Corporation, a subsidiary of ORIX Corporation.
The Commercial Markets division is organized into two segments: Property and Casualty Commercial, and Group Benefits. Property & Casualty Commercial provides workers’ compensation, property, automobile, liability and umbrella coverages under several different products, throughout the United States, which consists of The Hartford’s small commercial and middle market lines of business. In addition, variety of customized insurance products and risk management services, including workers’ compensation, automobile, general liability, professional liability, fidelity, surety, livestock and specialty casualty coverages are offered to companies through the segment’s specialty lines.
Standard commercial lines offer products with more coverage options and customized pricing based on the policyholder’s individualized risk characteristics. The middle market line of business provides workers’ compensation, property, automobile, liability, umbrella, marine and livestock coverages. Captive and Specialty Programs provide insurance products and services to captive insurance companies, pools and self-insurance groups. In addition, specialty lines has provided third-party administrator services for claims administration, integrated benefits and loss control through Specialty Risk Services, LLC (SRS), an indirect wholly owned subsidiary of the Company.
Group Benefits provides group life, accident and disability coverage, group retiree health and voluntary benefits to individual members of employer groups, associations, affinity groups and financial institutions. Group Benefits offers disability underwriting, administration, claims processing and reinsurance to other insurers and self-funded employer plans.
Consumer Markets provides standard automobile, homeowners and home-based business coverages to individuals across the United States, including a special program designed for members of AARP (AARP Program). Hartford’s auto and homeowners products provide coverage options. During the year ended December 31, 2011, Company completed the rollout of its new Open Road Advantage Product and, as of December 31, 2011, this product was sold in 44 states across the Company’s distribution channels, including directly to AARP members, through independent agents to both AARP members and non-members and directly to non-members.
The Wealth Management division consists of the segments: Individual Annuity, Individual Life, Retirement Plans and Mutual Funds. Wealth Management provides investment products for over seven million customers and life insurance for approximately 711,000 customers. Individual Annuity offers individual variable, fixed market value adjusted (fixed MVA) and single premium immediate annuities in the United States. Individual Life sells a range of life insurance products, including variable universal life, universal life and term life. Retirement Plans provides products and services to corporations, municipalities, and not-for-profit organizations. Mutual Funds offers retail mutual funds, investment-only mutual funds and college savings plans and proprietary mutual funds.
The Hartford establishes and carries as liabilities reserves for its insurance products to estimate a liability for unpaid losses, including those that have been incurred but not yet reported, as well as estimates of all expenses associated with processing and settling these claims; a liability equal to the balance that accrues to the benefit of the life insurance policyholder; a liability for future policy benefits, representing the present value of future benefits to be paid to or on behalf of policyholders less the present value of future net premiums; fair value reserves for living benefits embedded derivative guarantees, and death and living benefit reserves, which are computed based on a percentage of revenues less actual claim costs.
The Hartford cedes insurance risk to reinsurance companies for both its property and casualty and life insurance products. A major portion of The Hartford’s property and casualty insurance product reinsurance is effected under general reinsurance contracts known as treaties, or, in some instances, is negotiated on an individual risk basis, known as facultative reinsurance.
The majority of the Company’s investment portfolios are managed by Hartford Investment Management Company (HIMCO). HIMCO manages the portfolios to maximize economic value, while attempting to generate the income necessary to support the Company’s various product obligations, within internally established objectives, guidelines and risk tolerances. The portfolio objectives and guidelines are developed based upon the asset/liability profile, including duration, convexity and other characteristics within specified risk tolerances. The risk tolerances considered include, asset and credit issuer allocation limits, maximum portfolio below investment grade holdings and foreign currency exposure.
Enterprise Risk Management
The Company has an independent enterprise risk management function (ERM) whose responsibility it is to provide a view of the Company’s risk on an aggregated basis and to ensure the Company’s risks remain within tolerance. The Company maintains an internal Enterprise Risk and Capital Committee (ERCC).
Hartford Financial Services Group Inc
One Hartford Plaza
HARTFORD CT 06155