The Hartford 2007 Annual Report Download - page 119

119
Middle Market — Underwriting Summary 2007 2006 2005
Written premiums $ 2,257 $ 2,445 $ 2,445
Change in unearned premium reserve (94) (9) 90
Earned premiums 2,351 2,454 2,355
Losses and loss adjustment expenses
Current accident year before catastrophes 1,523 1,533 1,431
Current accident year catastrophes 15 36 38
Prior accident years (14) 15 52
Total losses and loss adjustment expenses 1,524 1,584 1,521
Amortization of deferred policy acquisition costs 529 544 537
Insurance operating costs and expenses 154 119 134
Underwriting results $ 144 $ 207 $ 163
Loss and loss adjustment expense ratio
Current accident year before catastrophes 64.8 62.6 60.7
Current accident year catastrophes 0.7 1.5 1.6
Prior accident years (0.6) 0.6 2.2
Total loss and loss adjustment expense ratio 64.8 64.7 64.6
Expense ratio 28.4 26.7 28.5
Policyholder dividend ratio 0.6 0.2 0.1
Combined ratio 93.9 91.6 93.2
Catastrophe ratio
Current accident year 0.7 1.5 1.6
Prior accident years (0.1) — (0.2)
Total catastrophe ratio 0.5 1.5 1.4
Combined ratio before catastrophes 93.4 90.1 91.7
Combined ratio before catastrophes and prior accident year
development 93.8 89.5 89.3
Underwriting results and ratios
Year ended December 31, 2007 compared to the year ended December 31, 2006
Underwriting results decreased by $63, from $207 to $144, with a corresponding 2.3 point increase in the combined ratio, from 91.6 to
93.9, due to:
Change in underwriting results
Decrease in earned premiums $ (103)
Losses and loss adjustment expenses
Volume change — Decrease in current accident year loss and loss adjustment expenses before
catastrophes due to the decrease in earned premium 61
Ratio change — An increase in the current accident year loss and loss adjustment expense ratio
before catastrophes (51)
Net decrease in current accident year loss and loss adjustment expenses before catastrophes 10
Catastrophes — Decrease in current accident year catastrophe losses 21
Reserve changes — Change to net favorable prior accident year reserve development 29
Net decrease in losses and loss adjustment expenses 60
Operating expenses
Decrease in amortization of deferred policy acquisition costs 15
Increase in insurance operating costs and expenses (35)
Net increase in operating expenses (20)
Decrease in underwriting results from 2006 to 2007 $ (63)