The Hartford 2008 Annual Report Download - page 133

Table of Contents
Year ended December 31, 2008 compared to year ended December 31, 2007
• The Retail DAC amortization ratio (individual annuity), excluding the effects of the 2008 Unlock and realized losses,
increased due to the impairment of goodwill in the fourth quarter of 2008, which reduced pre tax earnings but did not
affect EGPs. Excluding the impacts of the goodwill impairment, realized losses, and DAC Unlock, the DAC
amortization ratio was 43.3%, which reflects the 2008 effect of changes in assumptions made as part of the 2007 and
2008 Unlocks.
• The Retail general insurance expense ratio increased due to the impact of a declining asset base on relatively consistent
expenses.
• Individual Life death benefits increased, primarily due to growth of life insurance in-force and unfavorable mortality.
• Group Benefits loss ratio decreased due to favorable disability and medical stop loss experience partially offset by
unfavorable mortality.
• Group Benefits expense ratio, excluding buyouts decreased primarily due to lower commission expense.
• International — Japan DAC amortization ratio, excluding DAC Unlock and certain realized gains or losses, increased
due to actual gross profits being less than expected as a result of lower fees earned on declining assets resulting in
negative true-ups and a higher DAC amortization rate, as well as the accelerated amortization associated with the
impact of the 3 Win trigger.
• Institutional general insurance expense ratio is unchanged, as additional product development expenses were offset by
higher assets under management.
Year ended December 31, 2007 compared to year ended December 31, 2006
• Retail — Individual Annuity general insurance expense ratio increased in 2007 primarily due to higher service and
technology costs.
• The Retail DAC amortization ratio (individual annuity) excluding DAC Unlock declined in 2007, primarily due to
increased net investment income on allocated capital and an increase in limited partnership and other alternative
investment income.
• Individual Life death benefits increased in 2007 primarily due to growth of life insurance in-force and unfavorable
mortality.
• Group Benefits expense ratio, excluding buyouts, increased in 2007 primarily due to higher DAC amortization.
• Institutional general insurance expense ratio decreased in 2007 primarily due to higher assets under management.
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009