The Hartford 2008 Annual Report Download - page 152

Table of Contents
GROUP BENEFITS
Operating Summary 2008 2007 2006
Premiums and other considerations $ 4,391 $ 4,301 $ 4,149
Net investment income 419 465 415
Net realized capital losses (540) (30) (13)
Total revenues 4,270 4,736 4,551
Benefits, losses and loss adjustment expenses 3,144 3,109 3,002
Insurance operating costs and other expenses 1,128 1,131 1,101
Amortization of deferred policy acquisition costs 57 62 41
Total benefits, losses and expenses 4,329 4,302 4,144
Income (loss) before income taxes (59) 434 407
Income tax expense (benefit) (53) 119 109
Net income (loss) $ (6) $ 315 $ 298
Earned Premiums and Other 2008 2007 2006
Fully insured – ongoing premiums $ 4,355 $ 4,239 $ 4,100
Buyout premiums 1 27 12
Other 35 35 37
Total earned premiums and other $ 4,391 $ 4,301 $ 4,149
Ratios, excluding buyouts
Loss ratio 71.6% 72.1% 72.3%
Loss ratio, excluding financial institutions 76.3% 77.3% 77.2%
Expense ratio 27.0% 27.9% 27.6%
Expense ratio, excluding financial institutions 22.4% 23.0% 22.9%
The Group Benefits segment provides employers, associations, affinity groups and financial institutions with group life,
accident and disability coverage, along with other products and services, including voluntary benefits, and group retiree
health. The Company also offers disability underwriting, administration, claims processing services and reinsurance to other
insurers and self-funded employer plans.
Group Benefits has a block of financial institution business that is experience rated. This business comprised approximately
9% to 10% of the segment’s 2008, 2007 and 2006 premiums and other considerations (excluding buyouts) respectively, and,
on average, 4% to 5% of the segment’s 2008, 2007 and 2006 net income, excluding realized capital gains and losses.
Year ended December 31, 2008 compared to the year ended December 31, 2007
The decrease in net income for the year ended December 31, 2008, was primarily due to increased realized capital losses.
For further discussion, see Realized Capital Gains and Losses by Segment table under Life’s Operating Section of the
MD&A. The following other factors contributed to the changes in net income:
Premiums and other
considerations
• Premiums and other considerations increased largely due to business growth driven by new
sales and persistency over the last twelve months.
Net investment income • Net investment income decreased primarily as a result of lower yields on fixed maturity
investments and lower limited partnership and other alternative investment returns of $33.
Loss ratio • The segment’s loss ratio (defined as benefits, losses and loss adjustment expenses as a
percentage of premiums and other considerations excluding buyouts) decreased due to
favorable disability and medical stop loss experience partially offset by unfavorable
mortality.
Expense ratio • The segment’s expense ratio, excluding buyouts decreased compared to the prior year due
primarily to lower commission expenses.
87
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009